BiyaPay Market Watch | Tech Stocks Pull Back, Small Caps Strengthen — What to Make of This Week's Earnings and Nonfarm Payrolls?

According to BiyaPay market observations, the three major U.S. stock indices closed lower last week, while small-cap stocks rose against the trend; the Hong Kong Hang Seng Index rebounded, but the Hang Seng Tech Index continued to decline. The divergence among indices reflects investors reassessing corporate earnings, cost of capital, and valuations.

For those holding tech stocks, the most pressing concern right now is whether this round of adjustment has changed corporate growth logic; for those preparing to adjust allocations, they need to judge whether gains in other sectors can be sustained and whether the rebound has sufficient operational and capital support.

Entering November, the market needs to continue verifying two things: whether AI investment can generate sustainable cash returns, and whether corporate earnings can withstand current capital costs. This week's earnings reports from Apple, Palantir, AMD, and others, along with the U.S. nonfarm payrolls report, will provide new bases for judgment.

1. Last Week's Review: Tech Stocks Under Pressure, Market Has Not Fully Shifted to Risk-Off

As of the October 30 close, the S&P 500 stood at 7,580.07, down 0.57% for the week; the Nasdaq Composite stood at 25,437.00, down 2.00%; the Dow Jones Industrial Average stood at 51,770.31, down 0.85%. The Russell 2000 rose about 1.3% over the same period, with large-cap value stocks outperforming large-cap growth stocks for the fourth consecutive week.

ETFs related to healthcare, utilities, and consumer staples rose 3.12%, 2.04%, and 1.31% respectively for the week. These are ETF price performances and cannot directly substitute for the operational changes of all constituent companies, but they indicate that as tech weights adjust, the market is still seeking other earnings support.

Among them, Eli Lilly rose 11.31% for the week, with third-quarter revenue growing 39% and full-year revenue guidance raised. The relative strength is backed by performance and also reminds investors that the market is not trading solely based on the two labels of "tech" and "defensive."

Volatility also needs to be viewed in the context of time. The VIX closed at 19.42 on Friday, essentially flat from the previous Friday, but rose 12.91% on Friday alone. The minimal change in the weekly close masked the process of risk re-accumulating in the latter half of the week.

Fund flow data also does not uniformly point to risk-off. In the week ended October 28, U.S. equity funds saw net outflows of $6.65 billion, but tech sector funds still received net inflows of $4.54 billion. This statistic does not cover Thursday and Friday's tech stock selloff and cannot be used to explain all trading for the entire week.

Therefore, it is more appropriate to understand the current market action as selective adjustment. Whether funds will continue to leave tech and whether other sectors can take over still requires subsequent data verification.

2. Tech Earnings: Beyond Growth, Cash Recovery Matters More

Microsoft and Alphabet: Similar AI Business Expansion, Different Cash Flow Performance

Alphabet's third-quarter revenue grew 25% year-over-year, Google Cloud revenue grew 103%, but free cash flow for the quarter was negative $9.065 billion. Microsoft's Azure revenue grew 48%, operating cash flow for the quarter was $58 billion, and after subtracting cash expenditures on property and equipment, free cash flow calculated on this basis was approximately $18.633 billion.

This shows that cloud business revenue growth alone cannot answer whether the investment is worthwhile. Cash flow, capital expenditures, and subsequent investment commitments also need to be examined.

Amazon's AWS revenue grew 39.3%, but free cash flow for the trailing 12 months ended September was negative $42.4 billion. A distinction in methodology must be made here: the above figures for Microsoft and Alphabet are single-quarter, while Amazon's is trailing 12 months, and they cannot be directly ranked to determine operational superiority.

For investors, the key is when new facilities will be put into use, whether customer procurement can be sustained, and how much cash revenue growth can ultimately retain. If investment continues to outpace returns, companies may become more dependent on cash reserves and financing conditions; if revenue, profit, and cash recovery gradually keep pace, the market's recognition of capital expenditures will have a stronger foundation.

Chips and Optical Communications: Weekly Gains and Losses May Mask Position Volatility

Intel fell 24.38% for the week, including a 28.58% drop on Friday alone. The company's third-quarter revenue was approximately $16.5 billion, but fourth-quarter revenue guidance was $15 billion to $16 billion, with management also flagging pressure in the PC market.

This change raises the risk of semiconductor trading but is insufficient to prove that orders across the entire AI server supply chain are deteriorating simultaneously. PCs, data centers, storage, and optical communications still need to be analyzed separately.

AMD fell 2.32% for the week but dropped 10.88% on Friday; Lumentum rose 11.18% for the week but fell 8.57% on Friday. Looking only at weekly lines, it is easy to underestimate the risk brought by intraweek reversals.

For position holders, orders, deliveries, profit margins, and customer budgets are closer to operational fundamentals than price movements. After a rebound, subsequent position and fund flow data are still needed to determine whether buying can extend from short covering to new long positioning. Price increases alone make it difficult to confirm the nature of buying.

3. Hong Kong Stock Watch: Banks and Oil Support Hang Seng Index, Tech Buying Still Awaits Recovery

Last week, the Hang Seng Index rose 0.87% to close at 23,294.42; the Hang Seng China Enterprises Index rose 1.37% to close at 7,862.22; the Hang Seng Tech Index fell 3.02% to close at 3,754.90.

Banking, insurance, and oil weights supported the broader market. ICBC rose 9.12% for the week, China Construction Bank rose 5.02%, AIA rose 6.12%, and CNOOC rose 6.83%. Tech hardware came under pressure, with SMIC and Lenovo Group falling 8.67% and 9.45% respectively.

Therefore, the Hang Seng Index's gain cannot yet be regarded as broad stabilization in growth sectors. Financial companies need to be assessed on net interest margins, credit costs, and dividend capacity; upstream oil companies are affected by oil prices, production, and costs; tech hardware is more dependent on customer procurement and product delivery. The basis for gains in different companies needs to be verified separately.

On the funding side, based on aggregated daily net buy/sell trading data, southbound funds recorded net selling of approximately HK$11.036 billion for the week, with net selling on all five trading days. On Friday, the Hang Seng Index rose 1.46%, yet southbound funds still recorded net selling of approximately HK$3.560 billion.

This indicates that the index recovery has not yet been confirmed by synchronous southbound buying. However, southbound flows only represent trading through Stock Connect and cannot be equated with overall market fund flows, let alone used to infer foreign capital direction.

This week, Hong Kong stocks need to be watched for whether southbound net selling narrows, whether tech stocks can receive sustained support after pulling back, and whether the breadth of gains can spread from financials and resources. The sharp selloff in U.S. chip stocks on Friday occurred after the Hong Kong market close, and the incremental impact also needs to be verified in this week's trading.

Cross-Market Observations: Capital Allocation and Trading Tools Are Equally Important

U.S. tech stocks under pressure and Hong Kong financial and resource stocks relatively strong have prompted investors to recompare opportunities across different markets. However, assets distributed across different markets do not mean risks have been diversified. U.S. stocks, Hong Kong stocks, and digital assets may also be jointly affected by U.S. dollar liquidity, interest rate expectations, and tech growth expectations.

For cross-market investors, in addition to judging the assets themselves, they also need to consider how funds are exchanged, how to participate in trading, and how to use them afterward. Scattered accounts, different currencies, and multiple operational entry points all increase the complexity of fund management.

As a global one-stop asset allocation platform, BiyaPay uses USDT as its core funding entry point, connecting U.S. and Hong Kong stocks, cryptocurrencies, commodity futures, and cross-border remittances through a single account system, supporting exchanges among more than 30 fiat currencies and over 200 digital currencies, and providing zero-commission trading services for real U.S. and Hong Kong stocks. A centralized entry point helps reduce switching between different tools, making currency exchange, trading, and subsequent fund arrangements flow more smoothly. Specific service scope and fees are subject to the platform's actual rules.

Once the funding path is more convenient, investment judgment still needs to return to the assets themselves. Different markets have different sources of earnings, valuations, and risk characteristics, and should be evaluated separately based on investment horizon and risk tolerance, avoiding portfolios that appear diversified but are actually concentrated in the same type of risk.

4. Macro Observations: Falling Yields Alone May Not Be Enough to Support Tech Stocks

On October 28, the Federal Reserve maintained the federal funds rate target range at 3.75%–4.00%, with two committee members advocating a 25 basis point hike. The statement continued to note strong economic expansion and elevated inflation, with policy not yet shifting to explicit easing.

The September PCE price index rose 0.5% month-over-month and 3.6% year-over-year; core PCE rose 0.3% month-over-month and 3.1% year-over-year. Over the same period, nominal consumer spending grew 0.5%, while real consumption growth was less than 0.1%. A significant portion of the increase in spending amounts was absorbed by price increases.

For companies, this means revenue growth needs to be broken down into price and volume. If consumer purchasing power comes under pressure, companies may face trade-offs among price increases, sales volume, and profit margins.

On Friday, the U.S. 10-year Treasury yield fell to about 4.93%, yet tech stocks still declined, indicating that valuation pressure has extended to earnings realization. Lower yields typically support valuations, but if cash return expectations decline simultaneously, the interest rate support may be offset.

To judge the outlook, capital costs and corporate earnings need to be considered together, rather than focusing on only one variable.

5. This Week's Focus: Earnings and Employment Jointly Test Market Expectations

Apple, Palantir, and AMD: Observing End Demand, Applications, and Computing Power Demand Respectively

According to the current schedule, Apple and Palantir will report results after the U.S. market close on November 2 local time.

For Apple, the focus is on iPhone sales, services revenue, gross margins, and holiday season outlook. After divergence within tech stocks, whether stable cash generation capability is sufficient to support valuations needs to be answered by operating data.

For Palantir, the focus is on U.S. commercial business, order conversion, and full-year guidance. There is a time lag between contract value, recognized revenue, and actual collections. Whether customer expansion of usage can generate sustainable revenue is more informative than simply increasing product usage.

AMD has confirmed it will report results after the market close on November 3. The focus is on data center revenue, AI product deliveries, gross margins, and next-quarter guidance. After last Friday's sharp volatility, the market needs actual delivery and earnings data to verify demand.

On Wednesday, investors can also watch companies such as AppLovin and Arm to supplement judgments on AI-related demand from different angles such as advertising monetization, licensing, and royalties. If earnings schedules are adjusted, company announcements shall prevail.

Nonfarm Payrolls: Don't Just Look at the Number of New Jobs

The September JOLTS job openings report will be released at 23:00 Beijing time on November 3, preliminary third-quarter productivity and costs at 21:30 on November 5, and the October nonfarm payrolls report at 21:30 on November 6.

Nonfarm payrolls need to be judged in conjunction with the unemployment rate, wages, and historical revisions. If both employment and wages are strong, inflation and interest rate constraints may continue to draw attention; if there is moderate cooling with a stable unemployment rate, policy pressure may ease; if there is a clear weakening, demand and earnings downgrade risks must also be considered.

The U.S. midterm elections on November 3 local time may also affect tax, fiscal, and regulatory expectations. However, there is a transmission process between results and actual policy, and it is not appropriate to directly deduce a definite stock price direction.

To judge whether the recovery can be sustained going forward, we still need to return to two questions: have corporate earnings and cash returns improved, and can buying continue to expand. Tech stocks falling a lot does not automatically mean they are cheap; banks and small caps having strengthened recently also need operational performance support. Only by matching the basis for holdings with subsequent verification indicators can investors reduce passivity in chasing rallies and selling declines.