ROI-The hawkish pause, Lula's market meltdown, and the Anthropic IPO bombshell: The financial week in five charts

Microsoft

Today 11:42

The opinions expressed here are those of the authors.
By Anna  Szymanski
Oct 30 (Reuters) - Every Friday, Reuters Open Interest (ROI) distills the financial week into five key charts, spotlighting the major trends, surprises and overlooked moves that defined the past five days.
        
1. PAUSE, NOT PIVOT
MIKE DOLAN, ROI Finance & Markets Columnist: The Federal Reserve, European Central Bank and Bank of Japan all held rates steady this week, but markets still expect further tightening from the G3 central banks by year-end, after all three raised rates in tandem earlier this year.
Hopes that inflation would gradually return to, or stabilize around, 2% targets this year have been upended by the escalating Iran war. With crude oil prices LCOc1 holding in triple digits eight months into the conflict, policymakers face mounting concerns that energy price shocks will spur wider price rises across the major economies.    
     
2. ENERGY HUBRIS?
RON BOUSSO, ROI Energy Columnist: President Donald Trump took office in 2025 promising to lower energy prices and establish US energy dominance. Nearly two years on, the Republican president is grappling with soaring domestic fuel prices and severe disruptions to global energy supplies as conflicts in the Middle East and Europe drag on. The squeeze is a stark reminder that controlling a large chunk of global oil and gas supplies does not equate to controlling prices.
That could prove a major liability for Republicans heading into next week's midterm elections, where voter anger over the cost of living looms large.
     
3. LULA SHOCK
JAMIE MCGEEVER, ROI Markets Columnist: Brazilian President Luiz Inacio Lula da Silva's shock reelection was a political earthquake, and market tremors were just as powerful. The Bovespa stock index .BVSP had its biggest one-day fall since the COVID-19 pandemic, and Brazil's 10-year government bond yield BR10YT=RR posted its biggest surge in more than 20 years. The currency was roiled even more severely, with the real BRL= recording its steepest one-day fall against the dollar since the 1999 devaluation. 
Lula's victory could also have broader implications for US-China economic rivalry in South America, dealing a harsh blow to US President Donald Trump's "Donroe Doctrine" and raising the possibility that Brazil aligns more closely with Beijing. 
     
4. FEEL THE BURN
       MIKE DOLAN, ROI Finance & Markets Columnist: Cash burn is once again emerging as a major theme in the Big Tech earnings season, with investors focused on whether AI spending is outpacing hyperscalers' cash generation.
Alphabet's GOOGL.O shares fell more than 12% on Thursday after it reported negative free cash flow for the second consecutive quarter on Wednesday, with Google's parent likely to remain in the red in the coming quarter. Amazon AMZN.O added to investor concerns when it reported on Thursday that trailing 12-month cash burn had reached $42.4 billion in the third quarter as capex soared. 
Microsoft MSFT.O, by contrast, maintained positive free cash flow while undershooting capex expectations, initially lifting its shares.
     
5. IPO, MEET CAPEX
ANNA SZYMANSKI, ROI Editor-in-Charge: Anthropic filed for an IPO this week, and its prospectus gave a clearer view of the AI company's growth trajectory, revealing eye-popping revenue growth of 1,368% year-on-year in the second quarter.
But the loss-making company also has spending commitments of more than half a trillion dollars for the years to come, as it scrambles to secure the computing power it believes is core to its future growth.
It's expected to make its market debut before Thanksgiving, pressing ahead despite growing investor unease, even as some of its peers have pushed their listing plans into next year.
  
Opinions expressed are those of the authors. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
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(By Anna Szymanski
Editing by Marguerita Choy)
((anna.szymanski@thomsonreuters.com))