U.S. and China's Trade Truce, GOOGL Shines, META Struggles

Trade Developments - The US has reduced fentanyl tariffs from 20% to 10%, bringing the overall tariff on China to 47% [3] - China is restarting rare earth exports for at least one year and has committed to purchasing US agricultural goods, particularly grains [3][4] - There is uncertainty regarding the specifics of these commitments, especially concerning timelines and tonnage for grain purchases [6] Federal Reserve Insights - The Federal Reserve cut rates by 25 basis points in October but indicated a cautious approach towards future cuts, particularly in December [12] - The end of quantitative tightening is set for December 1, which may exert downward pressure on short-term rates [12] - There is a split among committee members regarding future rate cuts, with some advocating for a 50 basis point cut while others prefer to maintain current rates [14] Earnings Reports Alphabet (Google) - Alphabet reported revenue of $102.35 billion, exceeding expectations of $101.1 billion, with adjusted earnings per share at $2.87, surpassing the anticipated $2.27 [17][18] - Google Cloud revenue reached $15.2 billion, a 33.5% year-over-year increase, contributing positively to the overall performance [18] - The company is successfully monetizing its AI capabilities and maintaining market share in search advertising [19] Meta - Meta's revenue was $51.2 billion, a 26% year-over-year increase, with adjusted earnings per share at $7.25, above the expected $6.61 [22] - The company faced a significant tax charge of $15.9 billion, impacting the quarter's performance [23] - Concerns arose regarding the lack of clarity in future capital expenditure guidance, particularly for 2026, leading to a decline in share prices [24][25]