Today
More tricks, fewer treats. Halloween has come early this year, with enough to spook some investors. Tech stocks remain under pressure this morning, with Nasdaq futures down -2.5% at the time of writing. Disappointing results from Amazon and Intel have added to worries about the sustainability of the AI trade. Amazon’s capital spending plans overshadowed strong cloud growth, while Intel’s weak outlook highlighted how the AI boom is driving up memory chip prices and hurting demand for PCs. Both stocks are down sharply in premarket trading (see company news below). Meanwhile, a $6.3 bln hack at Binance, the world’s largest crypto exchange, has sent bitcoin and other cryptocurrencies lower. The selloff has so far been relatively contained given the scale of the breach, perhaps helped by Binance’s pledge to cover customer losses and its ability to freeze roughly $3 billion in affected assets.
Canada’s economy is tracking annualized growth of just 1.3% in Q3, falling short of the BoC’s 2% forecast and signaling a slowdown from last quarter. Real GDP was unchanged in August for the second consecutive month, missing economists’ expectations for a 0.2% increase, while preliminary estimates point to the economy contracting by -0.1% in September amid weakness in manufacturing, mining, and energy production. August’s flat number was primarily driven by a -1.4% decline in wholesale trade, including a -4.4% contraction in motor vehicle and parts wholesaling, alongside a -0.2% decline in public-sector activity. However, some areas showed resilience, with retail trade expanding 1.2% and manufacturing output increasing 0.3%, marking its fifth monthly gain in seven months. The weaker economic data comes just days after the BoC raised its benchmark interest rate by 25 bps to 2.5%, its first increase in more than three years, as policymakers attempt to prevent elevated energy prices from spreading across the economy.
Binance just suffered a $6.3 bln cyberattack, marking the largest digital-asset theft on record and raising questions about security vulnerabilities across the crypto industry. The exchange suspended withdrawals and said that it would reimburse impacted customers. Blockchain intelligence firms are pointing the finger at North Korean hackers, with investigations suggesting that attackers exploited internal transaction authorization systems to transfer Bitcoin, Ether, and other cryptocurrencies, potentially through a compromised employee laptop. The breach exceeds the previous record $1.5 bln Bybit hack in February 2025 and has weighed on sentiment, pushing Bitcoin briefly below $77,000. The attack also raises concerns about systemic vulnerabilities as crypto platforms become more integrated with traditional financial markets.
The U.S. economy was resilient in Q3, but inflation and declining purchasing power are overshadowing strong economic growth ahead of the November midterm elections. Real GDP expanded at an annualized rate of 3.4%, its fastest pace in a year, helped by strong consumer spending, which increased 3.8%, and the strongest growth in business investment since 2020. Labour market conditions also remain relatively healthy, with unemployment claims hovering near historically low levels. Still, the Fed’s preferred inflation measure increased 0.5% in September and 3.6% YoY, reflecting continued price pressures associated with elevated energy costs and tariffs. Inflation has exceeded wage growth for six consecutive months, reducing household purchasing power and placing even more strain on lower-income consumers. This disconnect between strong economic stats and deteriorating consumer sentiment has become a key issue in the midterm elections, with Democrats emphasizing affordability concerns while Republican officials highlight strong economic growth. Political strategists from both parties acknowledge that voters tend to place more importance on their personal financial circumstances than economic indicators, giving the Dems an edge for next week’s elections.
Looks can be deceiving. The euro-area economy expanded by 0.4% in Q3, doubling economists’ expectations and showing resilience despite elevated energy prices, persistent inflation, and rising borrowing costs. Growth, however, was uneven with Germany expanding just 0.2%, France contracting -0.1% and Italy flat, while stronger performances in Spain, the Netherlands, and Ireland helped lift the overall figure. The headline growth rate overstates underlying economic strength, as Ireland accounted for about half of the expansion, while the euro area’s four largest economies grew by just 0.1% on average. Inflation remains a significant concern, with October price increases reaching 5.6% in Italy, 4.9% in Spain and 3.8% in France, raising the risk that elevated energy costs could eventually spread into other areas of the market. Economists have highlighted that France remains the most vulnerable due to political uncertainty, fiscal pressures, and weak domestic demand, while Germany is benefiting from increased infrastructure and defence spending and Spain continues to show stronger consumption, employment and population growth. Although the ECB held interest rates steady at its latest meeting, the stronger-than-expected GDP figures and inflationary pressures reinforce expectations for another 25 bp increase in December.
Oil majors ExxonMobil and Chevron reported before the bell this morning, with expectations high following a period of elevated oil prices and strong refining margins. Both companies along with ConocoPhillips are expected to more than double earnings per share from a year ago, supported by geopolitical tensions and supply disruptions. Given the sector’s strong run, investors will be watching management guidance on capital expenditure plans and production outlooks. Technical indicators also suggest caution, with analysts highlighting that the S&P Refining Index has rallied nearly 160% this year, its strongest annual performance in at least three decades, potentially leaving refining stocks vulnerable to consolidation or a significant correction. Meanwhile, geopolitical uncertainty continues to support energy prices, with the risk of renewed military escalation in the Middle East and potential disruptions to shipping through the Strait of Hormuz creating upside risks for oil, while Europe faces growing pressure from below-average natural gas inventories and elevated liquefied natural gas prices.
A different kind of cybersecurity. Anthropic disclosed in its recent IPO filing that it spent $2.75 mln on personal security for CEO Dario Amodei last year, more than four times his $654,167 base salary and 15% of his $18 mln in total reported compensation. The company also spent $1.29 mln protecting cofounder and President Daniela Amodei. Anthropic has maintained around-the-clock security since 2024, referencing increased public scrutiny, threats against employees, and attempts to obtain confidential information. While Anthropic’s security spending is large, it pales in comparison to other tech companies, including Meta, which spent over $25 mln protecting Mark Zuckerberg, Alphabet’s $8.8 mln for Sundar Pichai, and Tesla’s $4.8 mln for Elon Musk’s protection. Still, Amodei’s security costs are nearly seven times the $401,336 median reported among software and services companies and well above the $93,818 median across the broader S&P 500. Executive protection has become more common, with 28.3% of S&P 500 companies providing CEO security benefits last year, compared with 13.4% in 2021.
Diversion: Wind with the assist
