1. European equity investors are bracing for Trump 2.0

October has offered a sharp contrast between the US and Europe.

The S&P 500 has climbed 0.9%, while the Stoxx 600 is down 2.2%, at odds with the typical positive seasonality.

The main worry is that potential tariffs could harm European exports.

2. A potential tariff war is already priced in European stocks.

A basket of companies exposed to US tariffs — including German carmakers Mercedes-Benz, Porsche and BMW, beverage producer Pernod Ricard, and industrials such as Signify, Legrand and Assa Abloy — has trailed peers with significant American production presence over the past year.

3. “We now see a 30% chance of a crisis—either a US government debt crisis and/or a geopolitical crisis—up from 20%.”

“The bond market has legitimate concerns about a federal debt crisis,” writes Ed Yardeni.

4. MSFT forms a “death cross”

Microsoft guided for slower quarterly cloud-revenue growth, reflecting the company’s struggle to bring data centers online fast enough to keep up with demand for artificial intelligence services.

Stocks are in many cases priced for perfection and even a modest disappointment that normally would not have much of an impact can be important in terms of driving investor sentiment in this extended environment.

5. Dow Jones Index replaces Dow Chemical and Intel by Nvidia and Sherwin Williams.

The Dow Jones Industrial Average is an old-school index that continues to adopt more and more tech exposure as it tries to keep pace with mega-cap tech giants that now dominate the U.S. stock market.

6. Warren keeps cutting Apple stake

Warren Buffett has slashed his Apple stake yet further as he boosts cash to a record high – meaning that in just over a year, Berkshire has ditched almost two-thirds of its stake in the company.

7. The AI race in a chart

The blowout capital spending that has been fueling their race into AI services will continue.

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