- Barry Adams
- 01 Nov, 2023
- New York City
Stocks continued to move higher after the Fed's rate decision, and investors stepped up to increase bets on tech stocks.
Treasury yields for longer-dated maturities edged slightly higher after the Federal Reserve left rates unchanged but left the door open for a rate hike at the next meeting.
Policymakers are struggling to lower the inflation rate to 3% while keeping economic growth intact and navigating tight labor market conditions.
Historically, when interest rates rise rapidly, the labor market cools and economic growth slows, but the latest rate tightening cycle has had little impact on the labor market and economic growth.
The Federal Reserve has increased rates over the last eighteen months from near zero to close to 5.5%, and the U.S. economy has managed to avoid a much-foreseen economic slowdown or a recession.
Policymakers are still struggling to cool inflation, which has weakened in the last eleven months, but prices are still rising faster than the 2% target rate set by the central bank.
The Federal Reserve is struggling to understand the cumulative effects of 500 basis points of rate increases and the lags with which rate hikes affect economic activities, inflation, and economic and financial developments.
Inflation is still high because supply chain disruption-driven price hikes are cooling, helping the inflation to moderate, but demand-driven inflation is still fueling inflationary pressures.
While the Fed talks about cooling inflation, it also fans the fires of inflation by purchasing large chunks of federal government debt, which is fueling inflationary forces.
The U.S. Treasury Department is planning to auction $112 billion in debt next week as the federal government prepares to finance its rising debt, which reached $33.7 trillion at the end of October.
The federal government increased its deficit by 23.2%, or $320 billion, to $1.7 trillion in the fiscal year 2023 ending in September, and the federal deficit is expected to approach $2 trillion in the current fiscal year if the government continues to spend at its current levels.
The White House is seeking $106 billion to finance wars in Israel and Ukraine, and the president's office is looking for an additional $56 billion for childcare and disaster relief.
In stock trading on Wall Street, market indexes advanced more than 1% because investors bought into the narrative that the central bank is done raising rates for now and may skip rate hikes at the next meeting in December.
Fed Leaves Rates Unchanged, Sets No Timetable to Lower Inflation
The Federal Reserve held the fed funds rate range at a 22-year high between 5.25% and 5.50% for the second time in a row and left the door open for another rate hike to cool inflationary pressure.
The central bank's move was widely anticipated, but policymakers failed to provide a definite timetable for bringing down inflation to the target rate of 2%.
Private Sector Hiring Accelerated in October
Private sector payrolls expanded to a weaker-than-expected 113,000 in October, the ADP survey showed on Wednesday.
Payrolls expanded at a faster pace after rising by 89,000 in September, after education and healthcare added 45,000 jobs in the month.
The U.S. Labor Department is set to release its October nonfarm payroll estimate on Friday, and economists polled by Ticker.com are looking for payrolls to expand by 195,000.
The ADP survey and the nonfarm payrolls survey significantly diverge at times because the government data is based on a larger sample size and has a greater diversity of employers in its sample size.
28-year Low In Mortgage Application Volume
Mortgage applications declined by 2.1% in the week ending October 27, following a 1% fall in the previous week and extending the weekly decline to the third week in a row.
The 30-year fixed rate dipped slightly to 7.86% but remained close to 23-year highs and has been above the 7-percent level since early August 2023.
The refinance share of mortgage activity decreased to 31.2% of total applications from 31.4% the previous week.
The adjustable-rate mortgage share of activity increased to 10.7% of total applications as buyers struggled with elevated interest rates and home affordability and hoped they would be able to later refinance mortgages at a lower rate.
U.S. indexes and Yields
The S&P 500 index increased 1.0% to 4,235.55, and the Nasdaq Composite advanced 1.3% to 13,026.22.
The yield on 2-year Treasury notes decreased to 5.0%, 10-year Treasury notes inched lower to 4.80%, and 30-year Treasury bonds edged down to 4.98%.
Crude oil decreased $0.54 to $80.47 a barrel, and natural gas prices fell 8 cents to $3.48 a thermal unit.
Gold increased $2.01 to $1,981.48 an ounce ahead of the Fed's interest rate decision later in the day.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged higher to 106.86, and the index traded volatile after the euro and the pound eased for the second day in a row and the yen fell to a multi-year low after the Bank of Japan left its ultra-loose policy intact.
U.S. Stock Movers
Wayfair Inc. declined 4.5% to $40.46 after the online furniture retailer reported weak third-quarter revenue, reflecting a weak demand for home goods and residential furniture.
Advanced Micro Devices, Inc. jumped 4.4% to $102.64 after the advanced chip maker reported mixed quarterly results and offered a positive 2024 outlook for its data center segment.
Wework Inc. plunged 52% to $1.08 after a report in the Wall Street Journal noted that the company is looking to file Chapter 11 bankruptcy protection as early as next week.
Caesars Entertainment Inc. decreased 0.7% to $39.63 after the resorts and casinos operator reported rising revenue and earnings in the third quarter, helped by steady demand at its properties in Las Vegas.
Revenue rose 3.7% to $2.99 billion, and earnings increased to 34 cents from 24 cents a year ago.
Match Group Inc. plunged 16.8% after the dating services provider forecast fourth-quarter revenue that fell short of market expectations.
In the third quarter, revenue rose 8.9% from a year before to $881.6 million, and earnings per share eased to 57 cents from 58 cents a year ago.
Active paying subscribers declined 5% from the previous quarter to 15.7 million, and average subscriptions increased 15% from the previous quarter to $18.39.
During the quarter, the company repurchased $300 million of stock and a total of $445 million in the year-to-date, reducing its share count by 2.8% from the beginning of the year.
About $667 million is available under the $1 billion stock repurchase program, and the company declared its plan to return to shareholders at least 50% of its free cash flow.
Paycom Software Inc. plunged 37.7% to $152.38 after the payroll processor forecasted weak fourth-quarter revenue.
In the third quarter, non-GAAP net income increased to $102.4 million, or $1.77 per diluted share, up 39% from the prior-year period.
During the quarter, the company repurchased over $76 million worth of stock and paid nearly $22 million in cash dividends.
European Stocks and Bond Yields Rebounded In Cautious Trading
European markets hovered near the flatline, and the euro edged lower for the second day in a row.
Market indexes across Europe were in a holding pattern, and investors reacted to another batch of earnings and bond yields traded with a downward bias.
Investors awaited interest rate decisions from the Federal Reserve later today and from the Bank of England on Thursday.
On Tuesday, Eurostat, the statistical agency of the currency union, said the consumer price index in the eurozone dropped to a two-year low, raising hopes that the European Central Bank may pause rates for an extended period.
But worries of an economic slowdown dominated market sentiment after the eurozone economy struggled to expand in the third quarter.
Moreover, worries of a wider war in the Middle East also kept crude oil and natural gas prices elevated for the third week in a row, rekindling fears of a rebound in inflation.
Europe Indexes and Yields
The DAX index increased 0.8% to 14,923.27, the CAC-40 index advanced 0.7% to 6,932.63, and the FTSE 100 index edged up 0.3% to 7,342.43.
The yield on 10-yetrar German bonds decreased to 2.75%, French bonds traded lower to 3.37%, the UK gilts edged down to 4.49%, and Italian bonds inched lower to 4.67%.
The euro hovered near a three-month low at $1.054, the British pound at $1.214, and the U.S. dollar at 90.88 Swiss cents.
Brent crude decreased $0.14 to $86496 a barrel, and the Dutch TTF natural gas edged lower by €0.25 to €47.76 per MWh.
Europe Stock Movers
Wolters Kluwer NV declined 3.5% to €116.90 after the Netherlands-based trade publishing firm reported adjusted operating profit for the first nine months declined 2% in constant currencies.
Skanska AB plunged 11.5% to 148.80 Swedish kronor after the Swedish construction firm reported lower-than-expected third-quarter profit, reflecting a weak commercial real estate market.
ASOS Plc dropped 10.5% to 352.10 pence after the struggling online fashion retailer reported an annual loss of £300 million.
ASOS stock dropped to the level last seen in 2009.
The embattled fashion retailer said annual revenue declined 11% to £3.5 billion from £3.9 billion, after-tax losses expanded to £223.1 million from £30.8 million, and diluted earnings per share fell to 213 pence from 30.9 pence a year ago.
Active customers declined 9% to 23.3 million, but average transaction value increased 7% to £40.3 million from £37.6 million, and average order frequency edged lower to 3.6 from 3.8 a year ago.
The company accelerated its turnaround efforts, adjusted from pandemic boom to post-pandemic bust, and aligned its corporate structure to reflect weaker demand from repeat customers.
Premier customers declined 11%, reflecting higher subscription prices and higher thresholds for free delivery.
Aston Martin Lagonda Global Holdings PLC dropped 11% to 194.60 pence after the luxury vehicle maker reported a wider-than-expected loss in the third quarter.
The company also lowered its 2023 volume outlook for the DB12 model, but total vehicle sales in the quarter rose 4% to 1,444 from 1,384 a year ago.
Revenue increased 15% to £362.1 million from £315.5 million, and net loss shrank to £118.0 million from £228.2 million.
In the nine-month period, the wholesale average selling price across all models increased to £219,000 from £195,000 a year ago.
- Scott Peters
- 01 Nov, 2023
- New York City
Benchmark indexes advanced after investors stepped up to add more exposure to stocks after the Federal Reserve left its key short-term rate range unchanged for the second consecutive time.
The S&P 500 index increased 0.7% to 4,224.71, and the Nasdaq Composite advanced 0.9% to 12,964.44.
The yield on 2-year Treasury notes decreased to 5.0%, 10-year Treasury notes inched lower to 4.78%, and 30-year Treasury bonds edged down to 4.95%.
Wayfair Inc. declined 4.5% to $40.46 after the online furniture retailer reported weak third-quarter revenue, reflecting a weak demand for home goods and residential furniture.
Advanced Micro Devices, Inc. jumped 4.4% to $102.64 after the advanced chip maker reported mixed quarterly results and offered a positive 2024 outlook for its data center segment.
Revenue in the third quarter increased 4% to $5.8 billion from $5.56 billion, net income soared more than threefold to $299 million from $66 million, and diluted earnings per share jumped to 18 cents from 4 cents a year ago.
Revenue in the data center segment from a year ago was flat at $1.6 billion; the client segment jumped 42% to $1.5 billion, driven by Ryzen mobile processor sales; the gaming segment revenue declined 8% to $1.5 billion; and embedded segment revenue fell 5% to $1.2 billion.
For the fourth quarter of 2023, AMD expects revenue to be approximately $6.1 billion, with a band of $300 million at the midpoint of the revenue range. This represents annual growth of approximately 9% and sequential growth of approximately 5%.
The chip maker expects a non-GAAP gross margin of approximately 51.5%.
WeWork Inc. plunged 52% to $1.08 after a report in the Wall Street Journal noted that the company is looking to file Chapter 11 bankruptcy protection as early as next week.
Caesars Entertainment Inc. decreased 0.7% to $39.63 after the resorts and casinos operator reported rising revenue and earnings in the third quarter, helped by steady demand at its properties in Las Vegas.
Revenue rose 3.7% to $2.99 billion, and earnings increased to 34 cents from 24 cents a year ago.
Match Group Inc. plunged 16.8% after the dating services provider forecast fourth-quarter revenue that fell short of market expectations.
In the third quarter, revenue rose 8.9% from a year before to $881.6 million, and earnings per share eased to 57 cents from 58 cents a year ago.
Active paying subscribers declined 5% from the previous quarter to 15.7 million, and average subscriptions increased 15% from the previous quarter to $18.39.
During the quarter, the company repurchased $300 million of stock and a total of $445 million in the year-to-date, reducing its share count by 2.8% from the beginning of the year.
About $667 million is available under the $1 billion stock repurchase program, and the company declared its plan to return to shareholders at least 50% of its free cash flow.
Paycom Software Inc. plunged 37.7% to $152.38 after the payroll processor forecasted weak fourth-quarter revenue.
In the third quarter, non-GAAP net income increased to $102.4 million, or $1.77 per diluted share, up 39% from the prior-year period.
During the quarter, the company repurchased over $76 million worth of stock and paid nearly $22 million in cash dividends.
- Barry Adams
- 01 Nov, 2023
- New York City
Stocks braved higher, investors digested another batch of fresh earnings, and they awaited the Fed's rate decision later in the day.
Bond market volatility overshadowed stock markets, and the U.S. Treasury outlined its plan to finance the federal government deficit.
The Treasury Department is planning to auction $112 billion in debt next week as the federal government prepares to finance its rising debt, which neared $34 trillion at the end of the fiscal year 2023.
The federal government increased its deficit by 23%, or $320 billion, to $1.7 trillion in the fiscal year 2023, and the deficit is expected to approach $2 trillion in the current fiscal year if the government continues to spend at its current levels.
The White House is seeking $106 billion to finance wars in Israel and Ukraine, and the president's office is looking for an additional $56 billion for childcare and disaster relief.
Private Sector Hiring Accelerated in October
Private sector payrolls expanded to a weaker-than-expected 113,000 in October, the ADP survey showed on Wednesday.
Payrolls expanded at a faster pace after rising by 89,000 in September, after education and healthcare added 45,000 jobs in the month.
The U.S. Labor Department is set to release its October nonfarm payroll estimate on Friday, and economists polled by Ticker.com are looking for payrolls to expand by 195,000.
The ADP survey and the nonfarm payrolls survey significantly diverge at times because the government data is based on a larger sample size and has a greater diversity of employers in its sample size.
28-year Low In Mortgage Application Volume
Mortgage applications declined by 2.1% in the week ending October 27, following a 1% fall in the previous week and extending the weekly decline to the third week in a row.
The 30-year fixed rate dipped slightly to 7.86% but remained close to 23-year highs and has been above the 7-percent level since early August 2023.
The refinance share of mortgage activity decreased to 31.2% of total applications from 31.4% the previous week.
The adjustable-rate mortgage share of activity increased to 10.7% of total applications as buyers struggled with elevated interest rates and home affordability and hoped they would be able to later refinance mortgages at a lower rate.
U.S. indexes and Yields
The S&P 500 index increased 0.7% to 4,224.71, and the Nasdaq Composite advanced 0.9% to 12,964.44.
The yield on 2-year Treasury notes decreased to 5.0%, 10-year Treasury notes inched lower to 4.78%, and 30-year Treasury bonds edged down to 4.95%.
Crude oil decreased $1.96 to $82.98 a barrel, and natural gas prices fell 11 cents to $3.43 a thermal unit.
Gold increased $8.05 to $1,990.58 an ounce ahead of the Fed's interest rate decision later in the day.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged higher to 106.66, and the index traded volatile after the euro and the pound eased for the second day in a row and the yen fell to a multi-year low after the Bank of Japan left its ultra-loose policy intact.
U.S. Stock Movers
Wayfair Inc. declined 4.5% to $40.46 after the online furniture retailer reported weak third-quarter revenue, reflecting a weak demand for home goods and residential furniture.
Advanced Micro Devices, Inc. jumped 4.4% to $102.64 after the advanced chip maker reported mixed quarterly results and offered a positive 2024 outlook for its data center segment.
Wework Inc. plunged 52% to $1.08 after a report in the Wall Street Journal noted that the company is looking to file Chapter 11 bankruptcy protection as early as next week.
Caesars Entertainment Inc. decreased 0.7% to $39.63 after the resorts and casinos operator reported rising revenue and earnings in the third quarter, helped by steady demand at its properties in Las Vegas.
Revenue rose 3.7% to $2.99 billion, and earnings increased to 34 cents from 24 cents a year ago.
Match Group Inc. plunged 16.8% after the dating services provider forecast fourth-quarter revenue that fell short of market expectations.
In the third quarter, revenue rose 8.9% from a year before to $881.6 million, and earnings per share eased to 57 cents from 58 cents a year ago.
Active paying subscribers declined 5% from the previous quarter to 15.7 million, and average subscriptions increased 15% from the previous quarter to $18.39.
During the quarter, the company repurchased $300 million of stock and a total of $445 million in the year-to-date, reducing its share count by 2.8% from the beginning of the year.
About $667 million is available under the $1 billion stock repurchase program, and the company declared its plan to return to shareholders at least 50% of its free cash flow.
Paycom Software Inc. plunged 37.7% to $152.38 after the payroll processor forecasted weak fourth-quarter revenue.
In the third quarter, non-GAAP net income increased to $102.4 million, or $1.77 per diluted share, up 39% from the prior-year period.
During the quarter, the company repurchased over $76 million worth of stock and paid nearly $22 million in cash dividends.
- Inga Muller
- 01 Nov, 2023
- Frankfurt
European markets reacted to the latest batch of earnings, and the euro edged lower for the second day in a row.
The DAX index increased 0.4% to 14,874.72, the CAC-40 index advanced 0.4% to 6,912.75, and the FTSE 100 index edged up 0.4% to 7,357.12.
The yield on 10-yetrar German bonds increased to 2.81%, French bonds traded higher to 3.41%, the UK gilts edged up to 4.54%, and Italian bonds inched higher to 4.75%.
Wolters Kluwer NV declined 3.5% to €116.90 after the Netherlands-based trade publishing firm reported adjusted operating profit for the first nine months declined 2% in constant currencies.
Skanska AB plunged 11.5% to 148.80 Swedish kronor after the Swedish construction firm reported lower-than-expected third-quarter profit, reflecting a weak commercial real estate market.
ASOS Plc dropped 10.5% to 352.10 pence after the struggling online fashion retailer reported an annual loss of £300 million.
ASOS stock dropped to the level last seen in 2009.
The embattled fashion retailer said annual revenue declined 11% to £3.5 billion from £3.9 billion, after-tax losses expanded to £223.1 million from £30.8 million, and diluted earnings per share fell to 213 pence from 30.9 pence a year ago.
Active customers declined 9% to 23.3 million, but average transaction value increased 7% to £40.3 million from £37.6 million, and average order frequency edged lower to 3.6 from 3.8 a year ago.
The company accelerated its turnaround efforts, adjusted from pandemic boom to post-pandemic bust, and aligned its corporate structure to reflect weaker demand from repeat customers.
Premier customers declined 11%, reflecting higher subscription prices and higher thresholds for free delivery.
Aston Martin Lagonda Global Holdings PLC dropped 11% to 194.60 pence after the luxury vehicle maker reported a wider-than-expected loss in the third quarter.
The company also lowered its 2023 volume outlook for the DB12 model, but total vehicle sales in the quarter rose 4% to 1,444 from 1,384 a year ago.
Revenue increased 15% to £362.1 million from £315.5 million, and net loss shrank to £118.0 million from £228.2 million.
In the nine-month period, the wholesale average selling price across all models increased to £219,000 from £195,000 a year ago.
Next Plc increased 4.3% to 7,182.0 pence after the U.K.-based apparel retailer lifted its profit outlook for the fourth time this year.
Total product full-price sales increased 3.8% in the third quarter and rose 3.2% in the nine-month period ending in September.
The company said 2023 full-price sales are estimated to increase by 3.1% to £4.74 billion, compared to the previous estimate of a 2.6% increase to £4.72 billion.
The fashion retailer estimated a 2023 pre-tax profit of £885 million, an increase of 1.7% compared to the previous estimate of a 0.5% increase to £875 million.
- Bridgette Randall
- 01 Nov, 2023
- Frankfurt
European markets hovered near the flatline, and the euro edged lower for the second day in a row.
Market indexes across Europe were in a holding pattern, and investors reacted to another batch of earnings and bond yields traded with a downward bias.
Investors awaited interest rate decisions from the Federal Reserve later today and from the Bank of England on Thursday.
On Tuesday, Eurostat, the statistical agency of the currency union, said the consumer price index in the eurozone dropped to a two-year low, raising hopes that the European Central Bank may pause rates for an extended period.
But worries of an economic slowdown dominated market sentiment after the eurozone economy struggled to expand in the third quarter.
Moreover, worries of a wider war in the Middle East also kept crude oil and natural gas prices elevated for the third week in a row, rekindling fears of a rebound in inflation.
Europe Indexes and Yields
The DAX index increased 0.4% to 14,874.72, the CAC-40 index advanced 0.4% to 6,912.75, and the FTSE 100 index edged up 0.4% to 7,357.12.
The yield on 10-yetrar German bonds increased to 2.81%, French bonds traded higher to 3.41%, the UK gilts edged up to 4.54%, and Italian bonds inched higher to 4.75%.
The euro hovered near a three-month low at $1.054, the British pound at $1.214, and the U.S. dollar at 90.88 Swiss cents.
Brent crude increased $1.21 to $86.23 a barrel, and the Dutch TTF natural gas edged lower by €0.73 to €47.23 per MWh.
Europe Stock Movers
Wolters Kluwer NV declined 3.5% to €116.90 after the Netherlands-based trade publishing firm reported adjusted operating profit for the first nine months declined 2% in constant currencies.
Skanska AB plunged 11.5% to 148.80 Swedish kronor after the Swedish construction firm reported lower-than-expected third-quarter profit, reflecting a weak commercial real estate market.
ASOS Plc dropped 10.5% to 352.10 pence after the struggling online fashion retailer reported an annual loss of £300 million.
ASOS stock dropped to the level last seen in 2009.
The embattled fashion retailer said annual revenue declined 11% to £3.5 billion from £3.9 billion, after-tax losses expanded to £223.1 million from £30.8 million, and diluted earnings per share fell to 213 pence from 30.9 pence a year ago.
Active customers declined 9% to 23.3 million, but average transaction value increased 7% to £40.3 million from £37.6 million, and average order frequency edged lower to 3.6 from 3.8 a year ago.
The company accelerated its turnaround efforts, adjusted from pandemic boom to post-pandemic bust, and aligned its corporate structure to reflect weaker demand from repeat customers.
Premier customers declined 11%, reflecting higher subscription prices and higher thresholds for free delivery.
Aston Martin Lagonda Global Holdings PLC dropped 11% to 194.60 pence after the luxury vehicle maker reported a wider-than-expected loss in the third quarter.
The company also lowered its 2023 volume outlook for the DB12 model, but total vehicle sales in the quarter rose 4% to 1,444 from 1,384 a year ago.
Revenue increased 15% to £362.1 million from £315.5 million, and net loss shrank to £118.0 million from £228.2 million.
In the nine-month period, the wholesale average selling price across all models increased to £219,000 from £195,000 a year ago.
- Barry Adams
- 31 Oct, 2023
- New York City
Market indexes closed higher on the final day of the month but fell for the third month in a row on interest rate uncertainties and elevated geopolitical tensions in the Middle East.
On the final day of the month, market indexes on Wall Street rebounded from earlier losses as investors booked losses in the month after Treasury yields surged to 16-year highs.
The S&P 500 index and the Nasdaq Composite declined about 3% in October, and both indexes extended losses for the third month in a row.
Investors are focused on the Fed's interest rate decision on Wednesday, and the central bank is expected to hold rates steady for the second time in a row.
Market participants are also hoping that the Fed policymakers may provide more clarity on the future direction of interest rates and hold rates at the final and next meeting in December.
In today's trading, investors reacted to another batch of earnings releases and awaited Apple Inc.'s quarterly results after the close on Thursday.
NAR and Residential Brokerages Conspired to Inflate Commissions
Real estate brokers were in focus after a Missouri jury awarded $1.8 billion in damages against the National Association of Realtors, Keller Williams, and Berkshire Hathaway's HomeServices of America.
The jury found the industry association and residential brokerages guilty of colluding to keep high brokerage commissions.
Immediately after the verdict, Keller Williams and HomeServices said they planned to appeal the decision.
Decades ago, when the commission system was designed, average home prices were below $50,000.
Over the decades, home prices have jumped multi-fold, but commissions have not adjusted to reflect higher home prices, making homes more expensive for buyers.
Zillow Group declined 7%, Redfin Corp. dropped 5.4%, and Compass Inc. plunged 6%.
In a separate case, the Justice Department is seeking damages from the industry association and others for sharing commissions between agents for buyers and sellers.
U.S. indexes and Yields
The S&P 500 index increased 0.5% to 4,187.15, and the Nasdaq Composite advanced 0.4% to 12,831.43.
The yield on 2-year Treasury notes decreased to 5.07%, 10-year Treasury notes inched lower to 4.83%, and 30-year Treasury bonds edged down to 5.0%.
Crude oil decreased $1.02 to $81.28 a barrel, and natural gas prices rose 23 cents to $3.58 a thermal unit.
Gold increased $10.15 to $1,985.17 an ounce following the weakness in 10-year Treasury yields.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged higher to 106.63, and the index is set to decline in the month after rising for two months in a row.
U.S. Stock Movers
Caterpillar Inc. declined 5.8% to $226.77 after the industrial equipment maker reported better-than-expected third-quarter results.
Revenue in the third quarter rose to $16.8 billion, and adjusted earnings were $5.52 per share.
However, the company forecasted sales in the current quarter would be "slightly higher" than the same year ago.
JetBlue Airways Corporation plunged 14.6% to $3.59 after the regional airline reported lower-than-expected sales and a wider-than-expected loss in the third quarter.
Revenue in the quarter was $2.35 billion, and the adjusted loss was 39 cents.
Chewy Inc. jumped 4.8% to $19.26 after Morgan Stanley analysts upgraded the stock to "overweight" from "equal weight" and lowered the stock price target to $28 from $31.
Arista Networks Inc. soared 10.5% to $193.75 after the networking gear maker reported better-than-expected quarterly results and lifted its sales outlook for the current quarter on the back of higher enterprise demand.
Simon Property Group Inc. increased 1.4% to $106.80 after the real estate mall developer lifted its annual fund flow estimate and reported better-than-expected quarterly results.
Revenue in the quarter ending in September increased 7.2% to $1.41 billion, and earnings per share rose to $3.20 from $1.65 a year ago.
Pfizer Inc. decreased 0.6% to $30.39 after the drugmaker recorded charges related to its COVID vaccine and COVID antiviral treatment Paxlovid.
The company took a $5.6 billion inventory write-down in the third quarter related to COVID products.
European Bond Yields Eased After Inflation Dropped to 2-year Low
European market indexes rebounded after inflation in the eurozone, France, and the Netherlands declined.
Benchmark indexes in Frankfurt, Paris, and London advanced more than 0.5%, and bond yields decreased after inflation measures eased.
Eurozone Inflation Slowed
The consumer price index in the eurozone eased to 2.9% in October, the lowest since July 2021, Eurostat reported Tuesday.
The core rate of inflation in the currency union, which excludes volatile energy and food prices, also slowed to 4.2%, the lowest since July 2022.
Eurozone Q3 GDP Contracted
The Euro Area economy contracted 0.1% on the quarter in the three months to September, following an upwardly revised 0.2% increase in the second quarter, the statistical agency reported in a separate report.
On an annual basis, the economy barely expanded by 0.1%, the weakest economic growth since the decline in 2021.
French Economy Barely Expanded
The French economy barely expanded 0.1% on the quarter in the third quarter, following an upwardly revised 0.6% increase in the second quarter, the statistical agency INSEE reported Tuesday.
On an annual basis, the economy expanded by 0.7% in the third quarter, slower than the upwardly revised 1.2% growth in the second quarter.
Italian GDP stalled in the third quarter from the previous quarter, following the 0.4% contraction in the second quarter, the Italian statistical agency ISTAT reported Tuesday.
Europe Indexes and Yields
The DAX index increased 0.4% to 14,810.34, the CAC-40 index advanced 0.9% to 6,888.65, and the FTSE 100 index edged lower by 0.05% to 7,321.72.
The yield on 10-yetrar German bonds decreased to 2.78%, French bonds traded lower to 3.39%, the UK gilts edged up to 4.49%, and Italian bonds inched higher to 4.69%.
The euro hovered near a three-month low at $1.066, the British pound at $1.219, and the U.S. dollar at 90.18 Swiss cents.
Brent crude decreased $1.21 to $85.0 a barrel, and the Dutch TTF natural gas edged higher by €2.54 to €48.01 per MWh.
Europe Stock Movers
Anheuser-Busch Inbev SA jumped 3.9% to €52.86 after the company reported higher-than-expected sales growth in the third quarter.
Carlsberg A/S Class B declined 1.3% to €111.90 after the brewery warned of weak consumer sentiment in Europe and Southeast Asia.
BP Plc decreased 4.0% to 505.70 pence after the U.K.-based energy company reported a sharp decline in quarterly profit and smaller-than-expected results from its gas trading operation.
Last week, Exxon Mobil and Chevron also reported a sharp decline in quarterly revenue and profit, reflecting lower crude oil and natural gas prices from a year ago.
BBVA SA declined 1.1% to €7.42 despite the Spanish bank reporting strong third-quarter earnings.
Wartsila Oyj Abp soared 16.2% to €11.32 after the power engineering company reported improved profitability in the third quarter.
Spectris Plc advanced 4% to 3,127.0 pence after the precision instrumentation and control company said 2023 revenue is expected to be near the top end of previous guidance.
Thales SA declined 2.6% to €137.35 after the French defense electronics contractor said new order inflow in the nine-month period ending in September declined 18% from a year ago.
Order intake in the period declined to €12.4 billion from €15.5 billion, a decrease of 20% in nominal terms and 18% on an organic basis from a year ago.
In the nine-month period, sales increased 4.5% to €12.8 billion, and in the third quarter, sales rose 2.4% to €4.1 billion.
The company reiterated full-year 2023 organic sales growth between 5% and 7%, or between €17.9 billion and €18.2 billion.
Elementis plc gained 4.9% to 118.0 pence, despite the chemical company reporting a decline in revenue in the third quarter.
BASF SE increased 4.2% to €43.39 after the German chemical company announced its plan to cut investment and reduce its operating costs.
Siemens Energy AG declined 2.4% to €8.23 after the company said it plans to sell its India-listed Siemens Ltd. to its former parent, Siemens AG.
Uniper SE jumped 7.3% to €4.74 after the German utility company swung to a nine-month profit of €9.8 billion.
Bouygues SA increased 4.4% to €33.16 after the diversified French conglomerate reported strong nine-month results and reiterated its financial year 2023 outlook.
- Scott Peters
- 31 Oct, 2023
- New York City
Caterpillar Inc. declined 6.4% to $226.71 after the industrial equipment maker reported better-than-expected third-quarter results.
Sales and revenues in the third quarter increased 12% to $16.8 billion from $15 billion, largely driven by price increases and volume growth.
Net income increased to $2.8 billion from $2.0 billion, and diluted earnings per share advanced to $5.45 from $3.87 a year ago.
Sales in the construction industry increased 12% to $7.0 billion, the resource industry advanced 9% to $3.3 billion, the energy and transportation industry jumped 11% to $6.9 billion, and financial services revenue soared 20% to $979 million.
Revenue in the third quarter rose to $16.8 billion, and adjusted earnings were $5.52 per share.
However, the company forecasted sales in the current quarter would be "slightly higher" than the same year ago, and the adjusted operating profit margin in the fourth quarter will be lower than in the third quarter.
The company estimated restructuring expenses of about $700 million for the full year and capital expenditures of about $1.5 billion in the period.
JetBlue Airways Corporation plunged 14.6% to $3.59 after the regional airline reported lower-than-expected sales and a wider-than-expected loss in the third quarter.
Revenue in the quarter declined 8% to $2.35 billion from $2.2.6 billion, and the company swung to a net loss of $153 million from a profit of $57 million, and diluted earnings per share were ($0.46) compared to 18 cents a year ago.
The airline said revenue in the fourth quarter is expected to decline between 6.5% and 10.5% compared to a year ago, and adjusted loss per share is expected to range between 35 cents and 55 cents.
The airline also said revenue growth in the fourth quarter is likely to be driven by international travel demand, and added industry capacity is ahead of demand in the off-peak season.
Chewy Inc. jumped 4.8% to $19.26 after Morgan Stanley analysts upgraded the stock to "overweight" from "equal weight" and lowered the stock price target to $28 from $31.
Arista Networks Inc. soared 14.5% to $201.15 after the networking gear maker reported better-than-expected quarterly results and lifted its sales outlook for the current quarter on the back of higher enterprise demand.
Revenue in the third quarter increased 28.3% to $1.5 billion, net income soared to $545.3 million from $354.0 million, and diluted earnings per share advanced to $1.72 from $1.13 a year ago.
The networking equipment maker forecasted fourth-quarter revenue between $1.50 billion and $1.55 billion, a non-GAAP gross margin of 63%, and a non-GAAP operating margin of 42%.
Simon Property Group Inc. increased 1.4% to $106.80 after the real estate mall developer lifted its annual fund flow estimate and reported better-than-expected quarterly results.
Revenue in the quarter ending in September increased 7.2% to $1.41 billion from $1.35 billion, net income rose to $594 million from $539 million, and diluted earnings per share advanced to $1.82 from $1.65 a year ago.
Funds from operations were $1.201 billion, or $3.20 per diluted share, including the gain from SPARC stake sales, as compared to $1.099 billion, or $2.93 per diluted share, in the prior year.
The company lowered its stake in the SPARC joint venture to 33% from 50% and booked non-cash after-tax gains of $118.1 million.
The company increased quarterly dividends per share by 10 cents, or 5.6%, to $1.90 payable on December 29 to shareholders on record on December 15.
The company estimated full-year 2023 net income in the range of $6.67 and $6.77 per diluted share and funds from operations to be within a range of $12.15 to $12.25 per diluted share, an increase from the previous range of $11.85 and $11.95.
Pfizer Inc. decreased 0.6% to $30.39 after the drugmaker recorded charges related to its COVID vaccine and COVID antiviral treatment Paxlovid.
The company took a $5.6 billion inventory write-down in the third quarter related to COVID products.
Revenue in the third quarter plunged 42% to $13.2 billion from $22.6 billion, and the company swung to a net loss of $2.4 billion from a profit of $8.6 billion, and diluted earnings per share declined to ($0.42) from $1.54 a year ago.
The pharmaceutical company guided full-year 2023 revenue to decline between 39% and 42% from a year ago, primarily because of the lower demand for COVID products.
- Barry Adams
- 31 Oct, 2023
- New York City
On the final day of the month, market indexes on Wall Street edged slightly lower as investors booked losses in the month after Treasury yields surged to 16-year highs.
The S&P 500 index and the Nasdaq Composite are set to decline about 3% in October, and both indexes extended losses for the third month in a row.
Investors are focused on the Fed's interest rate decision on Wednesday, and the central bank is expected to hold rates steady for the second time in a row.
Market participants are also hoping that the Fed policymakers may provide more clarity on the future direction of interest rates and hold rates at the final and next meeting in December.
In Tuesday's trading, investors reacted to earnings releases and awaited Apple Inc.'s quarterly results after the close on Thursday.
U.S. indexes and Yields
The S&P 500 index increased 0.7% to 4,148.90, and the Nasdaq Composite advanced 0.6% to 12,722.30.
The yield on 2-year Treasury notes decreased to 5.07%, 10-year Treasury notes inched lower to 4.83%, and 30-year Treasury bonds edged down to 5.0%.
Crude oil decreased $0.25 to $82.59 a barrel, and natural gas prices rose 11 cents to $3.47 a thermal unit.
Gold increased $2.02 to $1,997.50 an ounce following the weakness in 10-year Treasury yields.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged higher to 106.48, and the index is set to decline in the month after rising for two months in a row.
U.S. Stock Movers
Caterpillar Inc. declined 5.8% to $226.77 after the industrial equipment maker reported better-than-expected third-quarter results.
Revenue in the third quarter rose to $16.8 billion, and adjusted earnings were $5.52 per share.
However, the company forecasted sales in the current quarter would be "slightly higher" than the same year ago.
JetBlue Airways Corporation plunged 14.6% to $3.59 after the regional airline reported lower-than-expected sales and a wider-than-expected loss in the third quarter.
Revenue in the quarter was $2.35 billion, and the adjusted loss was 39 cents.
Chewy Inc. jumped 4.8% to $19.26 after Morgan Stanley analysts upgraded the stock to "overweight" from "equal weight" and lowered the stock price target to $28 from $31.
Arista Networks Inc. soared 10.5% to $193.75 after the networking gear maker reported better-than-expected quarterly results and lifted its sales outlook for the current quarter on the back of higher enterprise demand.
Simon Property Group Inc. increased 1.4% to $106.80 after the real estate mall developer lifted its annual fund flow estimate and reported better-than-expected quarterly results.
Revenue in the quarter ending in September increased 7.2% to $1.41 billion, and earnings per share rose to $3.20 from $1.65 a year ago.
Pfizer Inc. decreased 0.6% to $30.39 after the drugmaker recorded charges related to its COVID vaccine and COVID antiviral treatment Paxlovid.
The company took a $5.6 billion inventory write-down in the third quarter related to COVID products.