Why Did CME Trading Halt as Apple Passed Samsung?

TL;DR

A data center fault halted CME futures and options trading for several hours, disrupting contracts tied to equities, bonds, commodities, US Treasuries, and crude oil before trading resumed. Apple was projected to surpass Samsung in 2025 smartphone shipments, while holiday shoppers faced rising online sales, tariff-driven electronics prices, and growing use of generative AI for personalized gift searches.

Transcript

Hello and welcome to Morning Brief Market Sunrise. I'm Ramsan Karamali live from Yahoo Finance Studios in London. It's Friday, 28th November. Coming up on the show, an outage at the CME disrupts trading across the globe. Online sales are on the rise during this critical holiday season and Apple looks set to become the world's top phone maker. So gr... Read More

Key Insights

• The CME outage was caused by a data center fault and halted live futures and options trading for several hours. Its reach extended across bonds, equities, and commodities, affecting S&P 500 contracts, US Treasuries, and US crude oil before trading resumed.
• The labor market was weakening further according to Goldman Sachs analysis cited in the report. Separately, recent data showed that more than 1.2 million immigrants left the workforce during the first seven months of 2025, adding context to the administration's proposed immigration crackdown.
• Thanksgiving online sales in the United States were expected to reach $8.6 billion, an increase of 6% from the previous year. The Thanksgiving and Black Friday period typically produces about one-third of US retailers' annual sales and profits.
• Black Friday online spending was projected at $78 billion globally and $18 billion in the United States. Generative AI tools were also changing shopping by allowing consumers to enter detailed interests and receive more personalized gift recommendations.
• Electronics prices were under pressure from tariffs and supply constraints during the holiday shopping season. Microsoft raised Xbox prices twice, Sony increased the PlayStation 5 price by $50, and Nintendo raised the price of the original Switch released in 2017.
• Apple was projected to ship 243 million iPhones in 2025 and capture 19.4% of the smartphone market. Samsung was expected to hold 18.7%, putting Apple in first place for the first time in 14 years.
• Apple's expected smartphone leadership was driven by the successful September launch of the iPhone 17 series, including performance in China. A US-China trade truce reduced the anticipated tariff impact, while a weaker dollar helped Apple's sales outside the United States.
• A value stock is priced low relative to earnings, assets, or cash flow, but cheap valuation alone is insufficient. The report's screening approach combined a trailing price-to-earnings ratio of 0 to 20, a PEG ratio below one, and year-over-year earnings growth of at least 25%.

Questions & Answers

Q: What caused the CME trading outage?

The Chicago Mercantile Exchange outage was caused by a data center fault. It interrupted live futures and options trading for several hours across multiple markets, including equities, bonds, and commodities. The disruption affected contracts connected to the S&P 500 as well as trading in US Treasuries and US crude oil. The description states that trading later resumed.

Q: Which markets were affected by the CME outage?

The outage affected futures and options trading across equity, bond, and commodity markets around the world. Specific examples named in the report include contracts tied to the S&P 500, US Treasury trading, and US crude oil. Because the CME supports trading across several major asset classes, the data center fault created a broad interruption that lasted for several hours.

Q: How much were Thanksgiving and Black Friday online sales expected to generate?

Salesforce data cited in the report projected US Thanksgiving online sales of $8.6 billion, representing a 6% increase from the previous year. Black Friday was expected to generate $78 billion in online sales globally and $18 billion in the United States. This holiday period is especially important because it typically delivers about one-third of US retailers' yearly sales and profits.

Q: How is generative AI changing Black Friday shopping?

Generative AI is making gift searches more personalized by allowing shoppers to describe a recipient's age and interests in a single request. The report demonstrates this with an eight-year-old who likes Lego, action figures, and sports. Tools such as ChatGPT, Microsoft's Bing Copilot, and Gemini can use those details to suggest products, including options shoppers may not have previously known existed.

Q: Why were electronics and game consoles becoming more expensive?

Tariffs and supply pressures were pushing prices higher across electronics and accessories. Microsoft raised its console prices twice, Sony increased the PlayStation 5 price by $50, and Nintendo raised the price of the original Switch. Computers and displays were described as exempt from tariffs, but they still faced broader market pressure from data center construction and rising memory costs.

Q: Why was Apple expected to overtake Samsung in smartphone shipments?

Counterpoint Research projected that Apple would ship 243 million iPhones in 2025, producing a 19.4% market share compared with Samsung's 18.7%. Apple's momentum came from the successful September launch of the iPhone 17 series, with strong performance both domestically and in China. The expected result would put Apple first for the first time in 14 years.

Q: What could determine the future competition between Apple and Samsung?

Apple planned to intensify competition by releasing an entry-level iPhone 17e and a foldable smartphone to challenge Samsung's Galaxy foldable series. Samsung also faced pressure in the low-to-mid-tier smartphone market from Chinese manufacturers, which could limit its ability to regain first place. The description adds that Counterpoint Research expected Apple to remain the market leader through 2029.

Q: How can investors distinguish a value stock from a value trap?

A value stock trades at a low price relative to earnings, assets, or cash flow while retaining underlying earnings power. A value trap also appears cheap, but its business is deteriorating because earnings may be declining, the industry may be shrinking, or the dividend may be at risk. The report recommends examining fundamentals and researching unusually high dividend yields rather than relying on valuation screens alone.

Summary & Key Takeaways

• A data center fault at the Chicago Mercantile Exchange disrupted global futures and options trading for several hours. The interruption affected markets spanning bonds, equities, and commodities, including contracts linked to the S&P 500, US Treasuries, and US crude oil. The description states that trading subsequently resumed.

• US Thanksgiving online sales were expected to rise 6% from the previous year to $8.6 billion, according to Salesforce data cited in the report. Black Friday was projected to generate $78 billion in global online sales and $18 billion domestically, while tariffs and supply pressures raised prices for electronics and consoles.

• Counterpoint Research projected that Apple would ship 243 million iPhones in 2025, giving it a 19.4% market share against Samsung's 18.7%. Strong iPhone 17 sales, including demand in China, supported Apple's expected return to the top smartphone position for the first time in 14 years.