Company and Central Bank News, China Slowdown, TSMC, Meta, Tesla and More
Stock market news
• China was in the spotlight today after a flurry of data and statements from its central bank chief, financial regulator and statistics bureau. However, none of it helped paint a clearer picture of exactly how the world’s second-largest economy is positioned, or what policymakers are actually doing about it. The economy grew at its slowest pace since early 2023 in the third quarter, although better-than-expected retail sales potentially offered some cause for optimism. At the same time, new home prices fell at their fastest pace since 2015. Still, the official launch of a swap scheme today to support the stock market appeared to have had an immediate psychological impact, spurring gains in mainland stock markets.
• A strong profit from Taiwanese chipmaker and Nvidia supplier TSMC likely accounted for much of the gain in Hong Kong shares, as well as a 2.5% rise in Taiwan's stock index.
• UK retail sales are the region's biggest macroeconomic event and come as sterling recovers from a midweek inflation shock. The British currency is down 0.4% on the week, looking much firmer than the euro, which is on track to fall almost 1% after the ECB's rate cut on Thursday and signals further cuts are on the way.
• ESMA pushes for tighter regulation of cryptocurrencies under MiCA Cryptocurrency advocate responds to Elizabeth Warren's "return on investment" allegations against John Deaton by outlining the ROI he expects from the Republican candidate
• Elon Musk Triggers Dogecoin Rally - Meme Coin Jumps Over 7% After 'DOGE Will Fix This' Post Bitcoin and Ethereum Move Sideways, Dogecoin Jumps as Stocks Hit New Record: Leading Analyst Predicts King Crypto to Hit New High in 3-4 Weeks and $90K by Year End
• China to provide $562 billion in loans to whitelisted developers by year-end to save the industry. Developers' shares fell after China's Ministry of Construction briefing.
• Meta fires staff for abusing meal allowances in pursuit of efficiency - FT. Meta employees were receiving daily allowances of $20 for breakfast, $25 for lunch and $25 for dinner. It turned out they were using the allowances to buy various household items. The layoffs came days before the company began restructuring individual teams at WhatsApp, Instagram and Reality Labs, its augmented and virtual reality unit.
Meta is cutting staff at WhatsApp and Instagram in line with “strategic objectives”.
• Uber is exploring the possibility of acquiring travel site Expedia for almost $20 billion - FT. Uber has approached advisers to see if a purchase is possible and how it could be made, three sources said.
Buying Expedia would be the biggest deal yet for the group as it seeks to diversify its operations.
• Financial services company Euroclear has acquired a strategic stake in Singapore-based blockchain company Marketnode.
• Gold has once again reached a new record high ($2,720). Bloomberg writes that this may indicate concerns about inflation.
• U.S. bond yields jumped as traders cut bets on a Fed rate cut. A strong retail sales report prompted traders to cut their bets on a Fed rate cut this year.
• Stripe is in talks to acquire fintech platform Bridge, which specializes in stablecoins. Bridge allows businesses to create, store, send, and accept stablecoins such as USDT and USDC.
• The level of reserves that underpin the U.S. banking system remains adequate, according to a measure from the Federal Reserve Bank of New York that will be published monthly.
• Nestle says shoppers worried about US election. Nestle said Thursday that "shoppers' concerns about the election" in the US were weighing on demand in its biggest market, creating uncertainty among consumers.
• Taiwan Semiconductor Manufacturing (TSMC) raised its revenue growth forecast for 2024. Quarterly results beat estimates, allaying concerns about global chip demand and helping semiconductor stocks in the U.S. rise.
• Electric-vehicle maker Lucid aims to raise $1.67 billion in stock sale The stock selloff, as well as a recent warning of a bigger-than-expected third-quarter loss, sent Lucid shares down 16.5% to $2.74, their lowest since July 2.
• PPG to lay off 1,800 workers as paint and coatings maker seeks to cut costs
Shares up morning after earnings
NFLX +5%
ISRG +6%
• JP Morgan analyst Jeremy Thonet recommends investors buy shares of three independent power producers
VST shares (target price $178 or +31% from the current market), CEG ($342 or +21%), TLN ($268 or +50%) are up 1% in premarket trading.
• Tesla promotes key executives and gives them more responsibility in shakeup
Tesla says Cybertruck battery could be used with Powerwall to power homes starting in 2025
Tesla shows off Optimus autonomous navigation and charging capabilities, admits to “some” human assistance at Robotaxi presentation
Tesla moves closer to Cybertruck deliveries in Canada
• CSX analysts cut forecasts after weak third-quarter earnings. Spirit Airlines tries to regain its footing as rivals soar and bankruptcy fears mount
Key events that could impact markets on Friday:
- UK retail sales (September)
- US housing starts, building permits (both in September)
- Fed Bostic, Kashkara and Waller to speak
Fundamental news
• The ECB has again lowered its base rate - from 3.65% to 3.4%.
The rate on marginal loans will be 3.65% (previously 3.9%), and the deposit rate - 3.25% (previously 3.5%).
Inflation in the Eurozone was expectedly controversial, but slightly below expectations.
General inflation fell suddenly from 1.8% to 1.7%.
The base rate remained at 2.7%.
• The US released several key economic data showing a slowdown in the US economy
Initial Jobless Claims: 241K (258K previous)
Philadelphia Fed Manufacturing Index (October): 10.3 (+1.7 previous)
Retail Sales (September): +0.4% m/m (+0.1% previous)
US retail sales strengthened more than expected in September, indicating resilience in consumer spending that continues to drive the economy
• New IMF forecasts point to a challenging future for the global economy, characterized by sluggish medium-term growth, escalating trade tensions and high debt levels, IMF Managing Director Kristalina Georgieva said on Thursday.
• Italy will increase the capital gains tax on cryptocurrencies from 26% to 42%. Cryptocurrency participants expressed their outrage at this decision.
• Economic data from China turned out better than expected.
China's GDP slowed as expected from 4.7% to 4.6% y/y.
Retail sales accelerated more than expected to +3.2% r/s.
Unemployment unexpectedly fell from 5.3% to 5.1%.
Industrial production accelerated more than expected to +5.4% r/s.
• The Market Is ‘Very Confident’ in a Trump Win, Says Stanley Druckenmiller: Why the Billionaire Investor Thinks Blue Sweep Is ‘Highly Unlikely’ Trump’s Missing Snapchat Could Give Harris an Edge Among Young Voters
Donald Trump-Backed World Liberty Financial Off to a Slow Start, Raising Just 4% of Token Funding Target Peter Schiff Questions Bitcoin’s ‘Trump-Inspired’ Rise: ‘One of the Promises He Didn’t Make Was to Buy It’
• 'I'm friendly with Putin, Xi Jinping and Kim Jong Un' - Trump Elon Musk holds first solo Trump event in swing state Pennsylvania, calls for early voting
Trump has spent years sowing doubt about mail-in and early voting, claiming it is rife with fraud.
• North Korean hackers stole $3 billion for nuclear program. North Korean hackers have stolen about $3 billion worth of cryptocurrency since 2017, according to a new Microsoft cybersecurity report. The stolen money went to fund Pyongyang's nuclear program.
North Korea has officially declared South Korea a "hostile state" after amending its constitution — Reuters.
• IDF finds Russian weapons in Hezbollah, Netanyahu says. The Israel Defense Forces searched the terrorist organization's bases and found "the most advanced" Russian weapons there, the Israeli prime minister said in an interview with the French newspaper Le Figaro.
• The US, which supplies weapons to Kiev, is being hypocritical when it tries to accuse China of trying to tip the scales of the “Ukrainian conflict”
– official representative of the Chinese Embassy in Washington Liu Penyu.