Morning Note: Market News and an update from Amazon.

Market News

Scott Bessent told Fox News that the US expects to be back at the negotiating table with China in a year.

The ECB left policy unchanged for third consecutive meeting as expected. The statement said inflation remains close to target and the bank maintained data-dependent approach.

Gold held above the $4,000 an ounce level, while 10-year Treasury yields are currently 4.11%. Brent Crude slipped to $64 a barrel. OPEC+ is expected to endorse a modest production increase of 137,000 b/d on Sunday.

US equities fell last night – S&P 500 (-1.0%); Nasdaq (-1.6%) – although after hours, both Amazon.com (see below) and Apple rallied on the back of strong results, driving the overall market up in the futures market.

In Asia this morning, equities were mixed: Nikkei 225 (+2.1%); Hang Seng (-1.2%); Shanghai Composite (-0.8%). China’s manufacturing PMI fell to 49 in October from 49.8, marking the longest decline in more than nine years amid a deepening slowdown.

The FTSE 100 is currently little changed at 9,760, while Sterling trades at $1.3140 and €1.1365.

Source: Bloomberg

Company News

Last night, Amazon released strong Q3 results and guidance for the current quarter ahead of market expectations. Growth was driven by strong demand for its cloud services which helped to ease the pressure from softer growth at its e-commerce business. In response, the shares jumped 14% in after-hours trade.

Amazon is the global leader in e-commerce and public cloud computing services, leaving it well placed to benefit from the ongoing shift to online retail and the growth in cloud storage. The group has pioneered products and services such as Prime, Kindle Direct Publishing, Kindle, Fire tablets, Fire TV, Amazon Echo, and Alexa. Amazon Web Services (AWS) is the world’s largest public cloud provider.

In the three months to 30 September 2025, net sales increased by 12%, excluding currency movements, to $180bn, a touch ahead of the $178bn expected by the market. By division, North America sales grew 11% to $106bn, while International sales grew 10% to $41bn.

AWS, the cloud business, grew 20% to $33bn, better than the 18% growth expected by the market and at its fastest pace for nearly three years. Growth was driven strong demand in AI and core infrastructure. The company has continued to grow capacity – capital expenditure is already nearing $19bn so far in 2025 – and there are plans to up spending next year. During the quarter, the company saw strong adoption of Trainium2, its custom AI chip, which is fully subscribed and a multi-billion-dollar business that grew 150% quarter over quarter.

Group operating income was unchanged at $17.4bn, albeit impacted by a $2.5bn legal settlement and $1.8bn of severance costs. North America operating income (ex the charges) rose from $5.7bn to $7.3bn, while International profit slipped from $1.3bn to $1.2bn. AWS, which now accounts for 60% of the group’s operating income, rose from $10.4bn to $11.4bn.

Net income per diluted share was up 36% to 195c, well ahead of the market forecast of 157c, although the result does include pre-tax gains from investments. Adjusted free cash flow for the trailing twelve months fell from $47.7bn to $14.8bn, driven primarily increased capex, net of proceeds from sales and incentives.

The group provided guidance for the current quarter to 31 December 2025. Net sales are expected to grow by 10%-13% to between $206bn and $213bn, compared to the current market forecast of $208bn. Operating income is expected to be between $21bn and $26bn (vs. $21.2bn last year). This guidance assumes, among other things, that no additional business acquisitions, restructurings, or legal settlements are concluded.

Source: Bloomberg