Key Points

• Qualcomm Beat & Upbeat Outlook: Stronger results and guidance on resilient smartphone demand and growing auto chips, with longer-dated AI ambitions in focus.
• U.S. Flight Cuts Amid Shutdown: Transportation Department to reduce capacity by 10% at 40 major airports, pressuring domestic schedules and traveler demand until funding impasse eases.
• Japan Automakers Pivot to India: Toyota, Honda, and Suzuki ramp investment to use India as a manufacturing/export hub, reducing exposure to China and leveraging government incentives.
• Asia Equities Rebound on U.S. Data: Better U.S. services and payrolls figures steadied sentiment, trimming Fed-cut bets and lifting regional benchmarks after the prior session’s selloff.

Qualcomm Tops Expectations and Raises Outlook on Phone and Auto Strength

Qualcomm reported stronger-than-expected quarterly results and issued an upbeat sales and profit forecast, helped by firmer demand for premium smartphones and growing automotive chip orders.

While a tax expense led to a net loss, core performance improved from a year ago and all major operating segments met or beat internal targets.

The company is pushing beyond phones—expanding in PCs, mixed-reality devices, and data-center AI—with new accelerator chips slated for 2026–2027.

Management signaled confidence despite the eventual loss of Apple’s modem business, positioning Qualcomm to participate more broadly in the next wave of AI-enabled devices.

U.S. Orders 10% Flight Cuts at Major Airports Amid Record Shutdown

The Transportation Department will mandate a 10% reduction in flights at 40 major U.S. airports, citing air traffic control safety risks as the government shutdown reaches day 36.

Capacity limits—starting near 4% and rising to 10% next week—will spare international flights but hit domestic schedules at hubs such as New York, Washington, Chicago, Atlanta, Los Angeles, and Dallas.

Airlines are trimming regional and non-hub routes, offering refunds, and warning of delays as the FAA, already short of controllers, signals further restrictions if staffing pressures persist.

Airline shares slipped about 1% in after-hours trading as carriers brace for weaker bookings.

Japan’s Automakers Pick India as Export Base, Trim China Exposure

Toyota, Honda and Suzuki are redirecting investment to India, announcing roughly $11B in new capacity and models to use the country as a production and export hub amid rising costs, price wars and policy friction in China.

India’s lower costs, government incentives and limited Chinese EV competition make it attractive, with Toyota targeting ~10% market share and adding plants that lift capacity above 1 million units, Honda planning India-built EV exports from 2027, and Suzuki expanding toward 4 million units.

The pivot supports India’s export growth but execution risks remain given fierce domestic competition and past foreign exits.

Asia Stocks Rebound as U.S. Data Tempers Valuation Fears

Asian equities bounced after upbeat U.S. services and private payrolls data steadied sentiment, reversing part of Wednesday’s AI-led selloff.

Japan’s Nikkei rose ~1.4% and Korea’s Kospi gained ~0.8%, while MSCI Asia ex-Japan advanced ~0.8%.

Firmer macro prints pushed back odds of a December Fed cut, holding Treasury yields higher and keeping the dollar near a five-month peak.

China’s market reclaimed key levels on tech self-sufficiency hopes, with strategists eyeing beneficiaries across the industrial supply chain.

Futures in the U.S. and Europe eased slightly, and commodities were mixed, as investors favor earnings resilience over multiple expansion.

Conclusion

Markets are digesting mixed signals: resilient U.S. tech earnings (Qualcomm) and firmer macro data supported an Asia rebound, yet policy risk looms as Washington’s shutdown forces flight cuts that could dent travel demand and consumer sentiment.

Strategic supply-chain shifts continue, with Japanese automakers elevating India as a production and export base, reinforcing the region’s multi-year capex story.

Near term, higher yields and a stronger dollar argue for selectivity; prioritize balance-sheet quality and earnings visibility while avoiding crowded trades.

Medium term, watch U.S. labor and inflation prints for timing of policy easing and monitor shutdown negotiations for spillover effects on markets.

Investment Insights

• Qualcomm: Favor firms translating AI and device upgrades into steady cash flows; monitor execution on diversification beyond handsets.
• U.S. Flight Cuts: Expect near-term travel and logistics friction; prioritize companies with flexible operations and strong liquidity.
• Japan → India Pivot: Supply-chain shifts strengthen India’s role—consider long-run beneficiaries across autos, components, and infrastructure.
• Asia Rebound on U.S. Data: Maintain valuation discipline; emphasize earnings resilience while policy timing on rate cuts remains uncertain.

Economic Calendar

Sources: Bank of England calendar; U.S. BLS CPI and Employment release schedules; Federal Reserve events calendar; BEA release schedule.