News & Insight • Weekly Newsletters

31 October 2025 | William Buckhurst

That Was The Week That Was

MACRO NEWS

The US and China agreed a one-year trade truce, the US will reduce fentanyl-related tariff from 20% to 10%, China will remove its 10–15% retaliatory tariffs on various US agricultural products and will delay rare earth export controls announced earlier this month. However, structural differences persist, and it’s easy for there to be some scepticism of the deal’s scope due to the lack of concrete commitments.

Tokyo’s core CPI increased by 2.8% in October, surpassing expectations (2.6%) and underscoring ongoing inflationary pressures.

COMPANY NEWS

Microsoft reported first-quarter earnings of $3.72 per share against analysts’ expectations of $3.68, and revenue of $77.7bn against expectations of $75.5bn. But the shares weakened as annual growth in its cloud division, Azure, was only 39% - just under the 40% analysts hoped for - with next quarter’s projection dropping to 37%, putting Microsoft at the lower end of expectations.  They did highlight capacity constraints, however, suggesting that actual demand is higher.  Capital expenditure for the quarter was $34.9bn, a 74% increase year on year and $5bn more than Microsoft’s own forecast for the quarter.

Alphabet announced revenue for the quarter exceeding $100bn for the first time, comfortably beating estimates while earnings per share also easily beat estimates coming in at $2.87 versus $2.29 expected. It raised its capital expenditure guidance to $91bn to $93bn in the upcoming year, up from an original declaration of $75bn in February and a revised figure of $85bn announced in July.

Amazon shares finished the week noticeably higher as earnings per share came in at $1.95, sharply ahead of analysts’ expectations. Quarterly revenue reached $180bn versus $178bn expected. Within that number, its cloud division, AWS, posted an impressive 20% surge in quarterly revenues to $33bn. Capital expenditure was $34.2bn in the quarter, higher than the $31.5bn expected by analysts, bringing the total it has spent so far this year to $89.9bn.

Apple reported $102.47bn in revenue last quarter, up 8% year over year, compared with analysts’ estimates of $102.24bn. But the shares rose as it forecast 10% to 12% revenue growth in the quarter ending in December, typically Apple’s biggest of the year, although sales in China continue to lag.

Shares in Meta finished the week sharply lower. Although the company brought in record quarterly revenue it reported a major tax bill that dampened earnings per share.

KLA Corp. reported earnings per share of £8.81, ahead of expectations. Revenue increased 13% year over year to $3.21bn

Visa results continue to be a testament to the company’s consistent execution as it beat expectations and gave an upbeat forecast for its new fiscal year. Global payments volume rose 9% and it expects low double-digit growth next year.

Eli Lilly showed third quarter earnings per share were $7.02 vs $5.70 expected with revenue rising 54% y/y to $17.60bn, above consensus estimates.

Bristol Myers, beat on earnings and revenue and upped guidance for the full year.

Although Shell saw its profits fall this quarter due to lower oil prices, it continued to commit to its share buyback programme that will have seen it buy back a quarter of its shares in four years.

THE SOLE OF JAPAN

Trend-chasing tourists in Tokyo are squeezing one more item into their suitcases home and sending waves through the footwear industry. The must-have souvenir is a pair of sneakers from Onitsuka Tiger, the 76-year-old Japanese shoe brand, owned by ASICS. The thin-soled trainers, which have had a loyal fanbase for decades, are experiencing a fresh burst of popularity thanks to a rise in global travel to Japan and the ensuing internet hype for all things Japanese. Onitsuka brought in nearly ¥66bn ($434m) in net sales for the first half of 2025, a 50% increase from the same period a year ago.

The recent rise in popularity of Adidas’ Samba and Gazelle styles, with their similarly low profiles and flat soles, helped Onitsuka Tigers take off.

With the yen plunging – currently at around a 38-year low – Japan has become a magnet for global tourism in recent years.

AI ARMS RACE

A laser-eyed focus on return on AI-infrastructure spend and this felt like the first quarter where capex was not uniformly rewarded.

Alphabet and Amazon pledged to pour more money into AI infrastructure but also demonstrated how past outlays were already showing results.  Meanwhile, Meta – which doesn’t have a cloud computing business to show off AI-fuelled revenue growth – found it harder to placate investors’ spending worries, even as CEO Mark Zuckerberg touted AI-related improvements in ad-targeting and engagement and made a case for building excess capacity.

With earnings reports now in from six of the so-called Magnificent Seven, profit growth is tracking at about 27% year over year for the group, compared with the 15% expansion anticipated before the reporting season started. The S&P 500, by contrast, is on pace for 13% earnings growth, with results in from more than half of the benchmark’s constituents.

THE WEEK AHEAD

• Services and Manufacturing PMI’s in the US
• US Non-farm Payrolls
• Bank of England Interest Rate Decision and minutes

Earnings season continues:

• Monday – Berkshire Hathaway and Palantir Technologies
• Tuesday – AMD (Advanced Micro Devices), Arista Networks, Shopify, Spotify, Uber, Ferrari, Amgen, Pfizer, Eaton Corp., BP, and Thomson Reuters
• Wednesday – Toyota, Novo Nordisk, McDonalds
• Thursday – Astra Zeneca

THE WEEK IN HISTORY

1976: Ronald Wayne sold his 10% stake in Apple for $800. Today it would be worth $316bn

2012: the New York Stock Exchange shuts down for Hurricane Sandy. The market would remain closed the next day as well, making it the first time in 124 years that weather had led to a two-day shutdown of the New York Stock Exchange