EUROPEAN OPEN: HSBA LN Q3 pretax profit misses, announces USD 1bln buyback; AMAT raises BESI NA stake; NOVN SW raises FY26 core earnings outlook; ORA FP raises FY26 EBITDAaL outlook; UMG NA held prelim take-private talks; RKT LN cuts FY26 core LFL growth

EUROPEAN OPEN: European equities started Tuesday trade lower following a mixed overnight session. While APAC stocks were ultimately mixed, strength was seen in tech after Anthropic’s IPO filing helped to revive Asian chip stocks, with Samsung Electronics, SK Hynix and Advantest rising; SpaceX’s USD 40bln equipment finance lease and Meta Platforms’ proposed USD 95bln share sale also helped ease AI funding concerns. Gold hovered near USD 4,000/oz ahead of the Fed’s 27-28th October confab, where it is expected to leave rates unchanged; markets are pricing around 10% probability of a hike this week. Iron ore futures** fell to a two-year low amid weakening Chinese steel demand and rising supply; some analysts expect further declines towards USD 85-86 through November; Q4 shipments from major miners including Rio Tinto and BHP may rise by 18mln tonnes, while Fortescue’s negotiations with China Mineral Resources Group remain unresolved. Overnight, NBS data showed China’s industrial profits rose 14.4% Y/Y in September (prev. 4.2%), the fastest pace in three months, lifted by a rebound in producer prices amid surging oil costs and AI hardware demand. For the first nine months, profits grew 15.5% Y/Y (prev. 15.7%), with gains concentrated in mining and electronics, while broader industries lagged. From Japan, the BoJ’s underlying inflation gauge rose to a three-year high of 3.2% Y/Y in September (prev. 2.6% in August), exceeding its 2% inflation target; the central bank lifted rates to 1.25% in September, but is expected to hold steady at its meeting on Friday, though analysts still anticipate another hike in December. January Brent futures are trading with small gains, just above USD 111/bbl; traders assessed diplomatic efforts to avert escalation in the US-Iran war ahead of elections in Israel and midterms in the US next week. Senior Saudi, Pakistani and Turkish officials visited Tehran, with further talks agreed, according to IRIB. However, in the European premarket, crude ticked up amid reports of an explosion at Saudi Arabia’s Ras Tanura refinery (capacity 550K BPD). Ahead of tomorrow’s budget, the UK government unveiled cost-of-living measures, including: higher tax-free mileage rates, parental pay extended to over 150K additional parents, and an end to the Carer’s Allowance cliff edge. Tariffs on more than 100 products will be scrapped, Post Office drop boxes will expand to 1,000, and a Warm Homes loan scheme will fund clean energy upgrades. Other reports suggest that Chancellor Healey will announce plans to increase the minimum wage by nearly 4%, but slow the rise for young people after warnings that they are being priced out of jobs. In data, the UK BRC reported shop price inflation rose to 2.1% Y/Y in October (exp. 1.6%, prev. 1.4%), the fastest pace in two-and-a-half years. Food inflation was up to 2.9% Y/Y, and non-food inflation at 1.7%, its highest since December 2023. BRC exec said that “the dam is starting to break,” and urged the Chancellor to cut retailers’ taxes and employment costs in Wednesday’s budget. In trade news, USTR Greer warned that the European Investment Bank’s USD 3.4bln loan to Airbus (AIR FP) threatens the US-EU aircraft trade truce, and Washington seeks details to assess compliance with the agreement. Airbus and the EIB have said that the financing is commercially priced. Boeing (BA) has previously demanded transparency over potential subsidies. Elsewhere, German Chancellor Merz said the EU is pursuing deeper trade partnerships with Southeast Asia and CPTPP members to counter global trade restrictions. The European Commission is exploring using revenues generated by a global corporate tax agreement targeting large multinational companies to help finance the EU’s next seven-year budget, Politico reports citing diplomats. In France, French FinMin Lescure warned that appeasing protesters must not involve additional unfunded spending. Israelis vote today in an election that polls suggest is too close to call, with neither current PM Netanyahu’s bloc nor the opposition, led by ex-military chief Eisenkot, likely to win the 61-seat majority needed to govern; analysts say that Israeli Arab voters, about 20% of the population, could prove decisive in the outcome. STOCK SPECIFICS: FINANCIALS: HSBC’s (HSBA LN) Asian shares fell overnight after Q3 pretax profit missed expectations, and the bank left its FY outlook unchanged, despite support from higher interest rates, wealth inflows and lower credit losses; reported Q3 pre-tax profit up 32% Y/Y to USD 9.63bln (exp. 9.70bln), revenue increased 5% to USD 18.6bln (exp. 18.93bln); it also announced a USD 1bln buyback, and continues to see FY26 banking NII of at least USD 46bln. TECH: Applied Materials (AMAT) is increasing its stake in BE Semiconductor (BESI NA) to approximately 20%, expanding its strategic partnership in advanced semiconductor packaging; the investment is subject to antitrust clearance. Applied Materials has signalled no plans to increase its stake further, or seek board representation. Infineon (IFX GY) is investing EUR 1.1bln at its Villach site in Austria to establish the world’s first high-volume production facility for gallium nitride power semiconductors on 300mm wafers in Europe. Spain eased proposed data centre power rules following industry opposition, requiring 60% renewable electricity during peak hours until 2029 instead of 80% immediately; the threshold rises to 70% in 2029 and 80% in 2032. Cadence Design Systems (CDNS) shares rose 1.8% in extended trading after a Q3 beat and raised guidance. Q3 EPS 2.11 (exp. 2.05), Q3 revenue USD 1.63bln (exp. 1.62bln). Amkor Technology (AMKR) shares rose 2.6% in extended trading despite missing quarterly earnings and revenue expectations, as record computing and automotive revenue and continued margin expansion outweighed the softer results and cautious Q4 outlook. COMMUNICATIONS: Universal Music Group (UMG NA) has held prelim talks on going private with private equity firms including Apollo Global Management (APO), TPG and Blackstone (BX) earlier this year, though the conversations haven’t progressed and no sales process has begun, according to Bloomberg. Major shareholders Bollore (BOIVF) and Tencent (TCEHY) have not indicated willingness to sell. Orange (ORA FP) raised its FY26 EBITDAaL growth outlook to over 4.5% (from over 4%), driven by growth across its markets, particularly Africa and the Middle East; Q3 EBITDAaL reached EUR 4.14bln (exp. 4.09bln). Elsewhere, Orange, Bouygues and Iliad expect their EUR 20.4bln SFR acquisition to close in H2 2027. Nvidia (NVDA) plans to invest USD 3bln in Meta Platforms’ (META) equity offering, and expand collaboration on Meta’s Muse family of AI models; the companies are considering cooperation on the OpenShell reference architecture and Nvidia Sentry. Meta will also broaden its use of Nvidia Vera Rubin, Vera CPUs, Spectrum-X and BlueField-4 technologies. Africa Finance Corp. and Munich Re (MUV2 GY) agreed to share USD 1bln of trade-finance risk; the agreement covers letters of credit, trade loans and guarantees for 38 financial institutions across 11 African countries. CONSUMER CYCLICAL: Porsche AG (P911 GY) 9-month revenue fell to EUR 25.28bln (prev. 26.86bln), while operating profit rose to EUR 1.74bln (prev. 0.04bln); maintained FY26 revenue guidance of EUR 35-36bln (exp. 34.8bln). Said strong 911 demand helped offset a 16% deliveries decline, while Bugatti Rimac and Rimac Group disposals boosted cash flow. CONSUMER DEFENSIVE: Reckitt Benckiser (RKT LN) net revenue GBP 3.36bln (exp. 3.35bln), LFL growth of +3.2%, core LFL growth +3.3% (exp. 3.6%); it cut its FY26 core LFL revenue growth view to between 3.5-4.5% (prev. 4-5%), citing Lysol disruption and weaker Chinese VMS demand. Ben & Jerry’s founders have been exploring a deal with KKR (KKR) to separate the brand from Magnum Ice Cream (MICC NA), and structure it as an employee stock-ownership plan, WSJ reports; Magnum is reportedly resisting, arguing separation would raise costs. INDUSTRIALS: Caterpillar (CAT) is challenging the UK Trade Remedies Authority’s 18.81% anti-dumping tariff on Chinese-built excavators; imposed following a complaint by JCB, the five-year duty has halted Caterpillar’s exports of affected equipment from China to the UK. Caterpillar disputes the tariff calculation, while the UK authority maintains that its methodology is justified. Alfa Laval (ALFA SS) Q3 orders rose 36% Y/Y to SEK 23.2bln (exp. 20.3bln), supported by data centre and shipping demand; sales reached SEK 18.6bln (exp. 18.7bln), adj. EBITA SEK 3.36bln (exp. 3.35bln), net income SEK 2.26bln (exp. 2.29bln); expects weaker Q4 demand, and raised annual 2027-2028 capital expenditure guidance to around SEK 4bln. Assa Abloy (ASSAB SS) reported Q3 sales of SEK 40.8bln (exp. 40.7bln), EBITA of SEK 7.61bln (exp. 7.38bln), and EBIT of SEK 7.1bln (exp. 6.92bln). MATERIALS: Nucor (NUE) shares were little changed in extended US trading despite stronger-than-expected sales, supported by higher steel prices, though traders still have concerns that potential tariff easing on Canadian steel could pressure domestic pricing ahead. UTILITIES: Belgium is threatening compulsory nationalisation of nuclear assets as negotiations with Engie (ENGI FP) over the takeover of the country’s nuclear power plants have made little progress, De Tijd reports. HEALTHCARE: Novartis (NOVN SW) raised its FY 2026 core earnings outlook to flat or low-single-digit growth (prev. saw a low-single-digit decline), as newer medicines offset generic competition for Entresto. Q3 core profit exceeded expectations despite a USD 1.9bln impairment linked to failed drug del-desiran. Multiple sclerosis candidate remibrutinib also delivered weaker-than-expected trial results. Bayer (BAYN GY) released a post hoc sub-analysis of key secondary endpoint data from its pivotal OASIS-1 and OASIS-2 trials, demonstrating Lynkuet’s efficacy in treating moderate to severe menopause-related hot flashes. A US judge rejected Novo Nordisk’s (NOVOB DC) request to temporarily block Eli Lilly (LLY) from advertising claims that its drugs are more effective, finding Novo failed to demonstrate irreparable harm; Lilly may continue the disputed advertising while Novo Nordisk’s lawsuit proceeds. AstraZeneca’s (AZN LN) Enhertu received EU approval as an adjuvant treatment for patients with residual disease following neoadjuvant treatment for HER2-positive early breast cancer. DAY AHEAD: EVENTS: Israel holds its Knesset legislative election. DATA: In North America, US September durable goods orders (exp. 1.5% M/M, prev. 0.0%); Conference Board consumer confidence (prev. 81.9); new home sales (prev. 684K; prev. 6.4% M/M), S&P/Case-Shiller (prev. 2.5% Y/Y) and FHFA house prices (prev. 2.6% Y/Y); Richmond Fed manufacturing index (prev. -2); weekly ADP employment change (prev. 18.5K). Atlanta Fed will update its GDPNow tracking estimate (prev. 3.5%). In Canada, wholesale sales (prev. -1.6% M/M). SUPPLY: US auctions USD 70bln of 5-year notes, and a 20-30-year Treasury buyback; UK sells GBP 4.5bln of 2032 debt; Germany auctions EUR 5bln of 2028 Schatz; Italy offers EUR 1.5-2bln of 2028 BTP Short Term, and EUR 1-1.5bln of 2032 and 2035 BTPei. ENERGY: API weekly energy inventories. EARNINGS: Notable corporates reporting today include: Visa (V), Coca-Cola (KO), Seagate (STX), Boeing (BA), S&P Global (SPGI), Corning (GLW), HCA Healthcare (HCA), Freeport-McMoRan (FCX), Waste Management (WM), Robinhood (HOOD), Johnson Controls (JCI), United Parcel Service (UPS), American Tower (AMT), Sherwin-Williams (SHW), Hilton (HLT), Ecolab (ECL), Illinois Tool Works (ITW), Royal Caribbean (RCL), NXP Semiconductors (NXPI), ONEOK (OKE), PACCAR (PCAR), Baker Hughes (BKR), Teradyne (TER), PayPal (PYPL), IQVIA (IQV), Ventas Inc. (VTR), Centene (CNC), EQT (EQT).