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👀 Today’s Stories at a Glance
📦 Amazon’s cash turns negative: AWS grew 39%, its fastest in nearly 5 years, and the shares fell 7% before the open on spending.
🇺🇸 US grows 3.4%, savings shrink: Growth beat forecasts and PCE inflation hit 3.6%, while the saving rate slipped to 3.8%.
🇪🇺 Lagarde leaves early: The ECB held at 2.50% and its president said she will step down in February 2027, 9 months early.
🇯🇵 Japan says its target is met: The Bank of Japan held at 1.25% in an 8-1 vote and said underlying inflation is consistent with 2%.
💻 Intel sinks on its forecast: AI revenue grew 78%, but a $15 billion to $16 billion guide sent the shares down 25% before the open.
🇬🇧 NatWest falls, AstraZeneca rises: NatWest’s bad-loan charges doubled to £277 million, while AstraZeneca and BP gained on results.
🛢️ Tanker hit in Hormuz: Brent rose 2.1% to $113.07 after a tanker was attacked, a day after oil fell on diplomacy.
🪙 Strategy’s $19.5 billion profit: Strategy booked paper gains on 848,517 bitcoin as Coinbase’s revenue fell 35% and bitcoin traded near $78,000.
📈 Silver heads for $50: Chart of the Day covers the $49.78 and $44.28 levels I am watching and the $54.74 floor that broke.
🧠 One Big Thing
In 8 days, the 4 biggest spenders on AI all reported, and the market paid for one thing: cash. Microsoft’s cloud sped up and its shares rose. Alphabet and now Amazon fell with their clouds growing fast, and Meta fell the week before. Amazon’s free cash flow over 12 months is now minus $42.4 billion. That is the money left after paying for data centres, and it went negative. Nasdaq 100 futures were down 2% this morning. The US economy is still growing fast, at 3.4%. The stocks that led this market are being judged on what they keep, more than on what they sell.
⚖️ Fear & Greed
📉 The Number That Matters
-$42.4 billion
Amazon’s free cash flow over the last 12 months was minus $42.4 billion, from plus $14.8 billion a year earlier, after $77.26 billion of spending in 3 months.
✅ 5 Things to Know
📦 Amazon’s cloud sped up, and the cash went the other way
AWS grew 39% in the third quarter, its fastest in nearly 5 years. Amazon’s shares still fell as much as 11% after hours last night. AWS revenue was $45.98 billion against about $45.48 billion expected, and its operating profit rose 55% to $17.77 billion. The rest of the report came in light. Revenue was $201.9 billion against $202.3 billion expected, and earnings were $1.89 a share against $1.96. Advertising brought in $19.64 billion, short of the $20.82 billion forecast. Amazon was down 7% before the open this morning, Yahoo Finance reported. Amazon
The number that moved the stock sat in the cash flow table. Amazon spent $77.26 billion on property and equipment in 3 months. Free cash flow is the cash left after paying for that build. Over the last 12 months it was minus $42.4 billion. A year ago it was plus $14.8 billion. Amazon still expects about $220 billion of capital spending in 2026. Chief executive Andy Jassy said AWS is projecting “revenue growth rates of over 40% both in 2027 and in 2028”. TradingKey
Why does it matter beyond Amazon? It was the last of the 4 biggest AI spenders to report in 8 days. Microsoft rose on Azure. Alphabet fell on Search and had its worst day in over 20 years yesterday, Yahoo Finance said. Meta fell 6.98% last Thursday after its spending ran past its cash. Nasdaq 100 futures were down 2% and S&P 500 futures 1% at 8:32am UK, 4:32am in New York. Amazon guided fourth-quarter sales to $240 billion to $247 billion and operating profit to $28.5 billion to $33.5 billion. Yahoo Finance
Sensei’s Insight: The cloud grew faster and the shares still fell, because the cash line went the wrong way. Only Microsoft got rewarded. What I am watching is whether free cash flow turns back up before AWS’s 40% promise for 2027 arrives.
🇺🇸 The US grew 3.4%, and households dipped into savings
What did the Fed’s “more information” look like? The first of it landed yesterday. The US economy grew at an annual rate of 3.4% in the third quarter, up from 2.2% in the second and above the 3.2% median in a Wall Street Journal survey. September’s PCE inflation, the Fed’s own gauge, rose to 3.6% from 3.4%. Core PCE, which strips out food and energy, rose to 3.1% from 3.0%. Both matched forecasts. BEA
The detail sits under the spending. Personal income rose 0.2% in September and spending rose 0.5%. After inflation, disposable income fell 0.3%. The saving rate dropped to 3.8% from 4.0%. In plain terms, households spent more than their pay went up and covered the gap from savings. Trade took 3.32 points off growth and stockpiling added 1.61, StockTitan calculated. StockTitan
The next number lands today. The Employment Cost Index, the wage measure the Fed watches most closely, comes at 12:30pm UK, 8:30am in New York, forecast at 0.8% after 0.9%. The Fed decides again on 9 December, with new projections.
Sensei’s Insight: Growth came in hot and inflation came in exactly as forecast, so nothing here takes December off the table. What I am watching is the saving rate. Spending can outrun income for a while, and 3.8% is a thin cushion to do it from.
🇪🇺 Lagarde is leaving the ECB 9 months early
February 2027. That is when Christine Lagarde will step down as president of the European Central Bank, 9 months before her 8-year term runs out, the Irish Times reported. She said it yesterday, the same day the ECB held its deposit rate at 2.50%. Lagarde said the council debated a rise before voting unanimously to hold. “Energy prices have continued to rise, posing upside risks to the inflation outlook and downside risks to the growth outlook,” the ECB said. Eurozone inflation was 3.8% in September, its highest since September 2023. Irish Times finwire
The top of the ECB is about to change fast. Isabel Schnabel leaves the executive board in January for the IMF, and chief economist Philip Lane’s term ends in May. EU leaders aim to name Lagarde’s successor before France’s presidential election in the spring. The Dutch government backs Klaas Knot, the former head of the Dutch central bank. Spain backs Pablo Hernández de Cos, general manager of the Bank for International Settlements. The ECB has raised rates twice this year, most recently in September. October’s eurozone inflation figure comes on 4 November. Irish Times
Sensei’s Insight: A December rise still looks likely to me, and Lagarde will be in the chair for it. What I am watching is the shortlist to replace her. Whoever gets the job runs eurozone rates for 8 years, and 3 of the top seats change by May.
🇯🇵 Japan’s central bank says inflation is where it wants it
The Bank of Japan held its rate at 1.25% this morning. It also said underlying inflation has reached levels consistent with its 2% target, Newsquawk reported. The vote was 8-1, with board member Hajime Takata wanting a rise to 1.50%. The bank raised its price outlook for 2027 to 2.6%, according to Shuhei Uehara of Gaitame.com. It also sped up sales of the ETFs it bought during years of stimulus. Masahiko Loo of State Street said the time needed to sell them all falls to 43 years from 112. Newsquawk
Why does a hold in Tokyo matter elsewhere? A central bank that says its inflation goal is met has room to keep raising rates. Markets price about an 80% chance of a December rise, Commerzbank said. Low Japanese rates have made the yen a cheap currency to borrow and invest elsewhere, so each rise makes that trade dearer. The yen strengthened after the decision and then gave back part of the move, Uehara said. Reuters via Investing.com
Sensei’s Insight: The BoJ held, then told the market its inflation job is done. That reads like a bank getting ready to move again. What I am watching is December and the yen, because a firmer yen makes the world’s cheapest borrowing a little dearer.
💻 Intel’s AI chips grew 78%, and the PC side sank the forecast
Intel was down 25% before the open this morning, Yahoo Finance reported. The quarter itself was strong. Revenue rose 21% to $16.51 billion, and adjusted earnings were $0.52 a share against $0.40 expected. Data centre and AI revenue jumped 78% to $7.32 billion. Finance chief David Zinsner called it the strongest data centre growth in 15 years. TradingKey
The forecast did the damage. Intel guided fourth-quarter revenue to $15 billion to $16 billion, against $17.1 billion expected, and earnings to $0.25 a share against $0.43. Its PC chip business shrank 5% to $8.10 billion. Chief executive Lip-Bu Tan said demand for its server chips stays strong, and the priority is releasing more supply. In plain terms, Intel says it can sell more server chips than it can make right now. The guide reflects “near-term headwinds and supply constraints”, TradingKey reported. TradingKey
Sensei’s Insight: The AI half nearly doubled and the PC half shrank, and the market sold the whole thing. What I am watching is supply. If Intel cannot make enough server chips to meet the orders, the next guide tells us whether this was a blip.
Stories You Might Have Missed
🇬🇧 NatWest slips as bad-loan charges double, AstraZeneca rises
NatWest fell 3.53% by about 8:50am UK after a £1.53 billion attributable profit in the third quarter. Its charge for bad loans rose to £277 million from £140 million in the second quarter. Chief executive Paul Thwaite called it “another strong performance in the third quarter”. AstraZeneca rose 3.03% after revenue grew 7% at constant currency to $16.21 billion and core earnings rose 19% to $2.79 a share, with full-year guidance confirmed. BP rose more than 1% after an $8.46 billion profit that beat forecasts on refining. BT led the FTSE 100, up 4.46%, after the FT reported Virgin Media O2 was close to a deal to use its broadband network. The FTSE 100 was up 0.5%. AskTraders InstaForex
🛢️ A tanker hit in Hormuz lifts oil again
Brent rose 2.1% to $113.07 this morning and WTI 1.8% to $103.07, after the UK’s maritime agency UKMTO said a tanker was attacked with explosive devices in the Strait of Hormuz. The crew is safe. Oil had fallen yesterday on a Wall Street Journal report that US Vice President JD Vance had written to Iran to revive talks. Donald Trump played that down. “They need help with medical supplies,” he said. The Journal also reported that Washington told several Gulf states to prepare for a possible renewed US campaign after the 3 November midterms. AskTraders The National
🪙 Strategy books $19.5 billion, Coinbase’s revenue falls 35%
Strategy made $19.53 billion of net income in the third quarter, almost all of it the rise in value of its bitcoin. It held 848,517 bitcoin on 25 October, bought for about $75,446 each on average. Finance chief Andrew Kang steps down on 5 November. Coinbase’s revenue fell 35% to $1.22 billion, short of the $1.23 billion expected, and trading revenue dropped 44% to $590 million. Its $719 million profit included $715 million of unrealised gains on its own crypto. Bitcoin was trading near $78,000 this morning, CoinGecko data showed. KuCoin News CoinGabbar