ECB rate cut, TSMC and Netflix earnings reports, company news and fundamental reviews
Stock market news
• The European Central Bank is expected to make its first consecutive rate cut in 13 years on Thursday. With that in the price, the policy outlook will be at the forefront of traders' minds and it will need to sound fairly dovish to push the euro further lower. The single currency has already fallen 2.4% in October and rates markets are forecasting bigger rate cuts in Europe next year than in the US, even though US rates are above 4.75% and Europe's are at 3.5%.
• Results from chip giant TSMC could also weigh on markets, especially after a downbeat outlook from chip-equipment supplier ASML sent semiconductor stocks tumbling earlier in the week. TSMC's profit is expected to jump 42% in the third quarter to just over T$300 billion ($9.3 billion) on growing demand for artificial intelligence applications. It will give fourth-quarter revenue guidance in U.S. dollars.
US stock indices closed slightly higher yesterday The Magnificent Seven were under pressure, except for NVDA The XLF and XLU sectors were the leaders in growth The dollar continued its strengthening trend
• Pest control company Rentokil's earnings report is due in London and could provide a window into the health of the global economy. The company's shares in Britain have fallen sharply to more than four-year lows.
• Netflix's US retail sales and revenue data will also be analyzed to provide insight into consumer sentiment.
• Asian trade was fairly steady on Thursday, but was again clouded by disappointment over Chinese policy announcements that fell short of what markets had hoped for. Beijing promised to ease access to credit for developers to complete unfinished housing projects. Iron ore and Chinese property stocks fell, while the Australian dollar, which had been supported by better-than-expected jobs data, gave up early gains.
• Lockheed Martin (LMT) Becomes Largest US Defense Department Contractor by Contract Volume in 2023
Shares Hit All-Time Highs
• The International Energy Agency (IEA) predicts that fossil fuels could become cheaper and more accessible
due to shifting demand and the introduction of new extraction technologies.
• Sterling fell against the euro and the dollar after the biggest monthly fall in UK core inflation in 25 years.
• Global asset managers are changing their investment strategy towards Asian markets, with a trend towards reducing exposure to Indian stocks while investors are increasing long positions in Chinese stocks.
• European gas prices rise as LNG demand rises Demand for liquefied natural gas is rising while weather forecasts point to a cold start to November.
• Morgan Stanley (MS) shares soared the most in four years in trading. Morgan Stanley traders and bankers joined the rest of their Wall Street peers in posting better-than-expected earnings, helping to fuel a 32% jump in third-quarter profit.
• Shares of telecom giant America Movil are rising after a strong third-quarter report. The company reported strong results. America Movil said it more than tripled its quarterly net profit amid a weaker peso.
• Boston Dynamics and Toyota Research Institute (TRI) on Wednesday announced plans to incorporate artificial intelligence into the electric humanoid robot Atlas.
• Ken Griffin, Amazon invests in next-generation nuclear power. Amazon and billionaire financier Ken Griffin are among those backing a $500 million investment in small nuclear reactors, a rapidly growing technology.
The U.S. has opened applications for $900 million to support the initial domestic deployment of small modular reactor nuclear technology.
• ASML CEO Christophe Fouquet said he expects the long-awaited recovery in the chip market to last "until 2025," after disappointing third-quarter results that triggered a broad sell-off in the semiconductor industry.
• Delays in deliveries of planes from planemakers Airbus and Boeing are causing "massive frustration" and are not improving,
the head of the world's air transport body IATA said on Wednesday.
• Novavax (NVAX) shares fell 20% after U.S. regulators suspended development of an experimental flu vaccine after a serious adverse event occurred in one participant in a clinical trial.
• Photonics startup raises $400 million Lightmatter, a Mountain View, California-based startup that develops photonics technology for data center networking chips, said Wednesday it has raised $400 million in Series D funding. The startup plans an IPO.
• Amazon has unveiled its first color Kindle e-reader after years of development. The Kindle Colorsoft is priced at $280, which is comparable to similar devices from other manufacturers.
• General Motors is investing $625 million in a new joint venture with Lithium Americas as U.S. automakers ramp up production of electric vehicles and hybrids and seek to reduce their reliance on China for battery-related materials.
• Abbott (ABT) Raises Earnings Outlook Abbott Laboratories beat Wall Street estimates for quarterly profit on strong demand for its continuous glucose monitors and other medical devices.
• British American Tobacco to launch synthetic nicotine pouches The company will launch its version of Velo nicotine pouches using synthetic nicotine in the US, said David Waterfield, the company's president.
• The carmakers' troubles are becoming one of the biggest pain points in the global corporate bond market, with investors buying up the sector's debt as vehicle sales slow and competition intensifies.
• 68% of crypto owners choose Ethereum for investment, - MNBC. More than half of respondents said they hold stablecoins, and 30.5% own Bitcoin.
• Open interest in BTC futures on the Chicago Mercantile Exchange (CME) reached a new all-time high - Glassnode
Tether (USDT) achieved significant adoption, with
330 million online wallets and accounts receiving USDT by the end of Q3 2024.
According to JPMorgan, the total hashrate of US public Bitcoin mining companies reached a record 28.9% of the total hashrate of the Bitcoin network.
JPMorgan believes that mining stocks could be attractive investments ahead of the US elections.
• ETFs buying Chinese stocks have struggled lately amid 'loss of faith' in China's economic stimulus
"It will take more than lower interest rates, easier financing conditions and fiscal stimulus to convince us to invest in China rather than the US or even India," - Yardeni Research.
• EXPE shares rise 7% in premarket trading. The Financial Times reported that Uber Technologies (UBER) is considering buying the online travel company.
• UBER shares fall by 3%. UBER market cap is $175 billion, and EXPE is $20 billion.
• Oil company Phillips 66 (PSX) said it will close a refinery in the Los Angeles area. The announcement came days after Democratic Gov. Gavin Newsom signed a law aimed at preventing gas prices from spiking at the pump. The law allows energy regulators to require refineries to maintain a certain level of fuel inventory. The goal is to avoid a spike in gas prices when refineries are offline for maintenance.
• LCID shares fall 12% in premarket trading after earnings.
• Robinhood (HOOD) shares are up 2.5% in premarket trading. The company unveiled several new products at its HOOD Summit in Miami on Wednesday night. They are aimed at more advanced traders and include the ability to trade index futures and options, as well as a new Robinhood Legend web platform.
• CSX shares are down 3.5% after the report. The company reported weaker-than-expected results and gave a weak outlook. The rail operator said the fourth quarter would be “more challenging” due to falling fuel prices, lower coal demand and two major hurricanes in the Southeast. CSX forecast capital expenditures of about $2.5 billion, “excluding the cost of rebuilding infrastructure damaged by recent storms.”
• RTX shares fall 0.7% in premarket trading. Raytheon agreed to pay $950 million to settle charges it defrauded the government and paid bribes to secure business with Qatar.
• Elon Musk has selected Omead Afshar to lead Tesla's (TSLA) North American and European operations.
• BlackRock is in talks with India's Jio Financial about a private lending venture, Bloomberg News reports.
• US Bancorp's third-quarter profit beat expectations on higher interest income.
• Morgan Stanley profit beats expectations on investment banking gains.
• Austrian supervisory authority suspends Euram Bank.
• BNP Paribas is reviewing plans to set up a Middle East headquarters, cutting its presence in Bahrain, sources say.
• Goldman Sachs' CEO in Saudi Arabia is set to resign, Bloomberg News reports.
• BBVA sees additional capital impact of 8 basis points after Sabadell bid adjustment.
• Documents show UniCredit spoke to top German officials before buying Commerzbank shares.
• Jamie Dimon outlines JPMorgan expansion plan in Africa.
• Quilter's assets under management rise on higher inflows in Q3, shares jump
• General Motors to invest $625 million in new joint venture with Lithium Americas.
• FTC eliminates subscription traps with 'click to cancel' rule.
• Flows into Asian bonds slowed on concerns over US rate cuts and elections.
• Abbott raises profit forecast on strong medical device sales.
• Morgan Stanley profit rises 32% on big deals.
• Airbus to cut up to 2,500 jobs in defence and space sectors.
• British American Tobacco to launch pouches with synthetic nicotine.
• ASML attracts investor attention after warning of turmoil in global chip market
• Freeport to delay Indonesian copper sales until second quarter of 2025 after fire, sources say
• ASML's downgrade indicates excess capacity at the plant, not a chip crash.
• ASML attracts investor attention after warning of turmoil in global chip market
• A group of shareholders said ASML's early earnings release was a "human error."
• Photonics startup Lightmatter raises $400M amid AI-powered data center boom, then plans IPO
• Ukraine's defense minister says Russia is using generative AI to spread disinformation.
• Amazon introduces its first color Kindle e-reader after years of development.
• Amazon joins the idea of using nuclear energy to meet data center demand.
• India's L&T Technology reports marginal sales gain in second quarter, maintaining full-year forecast.
• Accel reports that AI and cloud funding in the US, Europe and Israel will reach $79 billion in 2024.
• China Cyber Association Calls for Review of Intel Products Sold in China
Key events that could impact markets on Thursday:
- ECB policy decision and press conference
- US retail sales
Fundamental news
• U.S. import prices fell the most in nine months in September as energy costs fell sharply,
suggesting a soft inflation outlook that allows the Fed to continue cutting interest rates. A Labor Department report on Wednesday also showed that import prices other than fuel barely rose.
U.S. mortgage rates rose to 6.52%, the highest since early August,
prompting a sharp decline in both home-buying and refinancing activity.
• Marketwatch: Vice President Kamala Harris gave a combative interview on the Republican-leaning Fox News on Wednesday, sparring with host Bret Baier over immigration and changing policy positions.
Trump said he was the only one who could resolve the conflict between North and South Korea.
Kamala Harris maintains lead over Donald Trump in national poll - Reuters
Harris has 45% of U.S. voters' support, compared with 42% for Trump, according to a Reuters/Ipsos poll released yesterday. The election results are really anyone's guess.
• Xi Jinping said that China is ready to be friends with the United States:
“China is ready to be a partner and friend of the United States. This will benefit not only the two countries, but the entire world.”
The United States and China have different views on national security, in particular China’s actions in the South China Sea, military exercises around Taiwan, and Russia’s war against Ukraine.
• Spanish police have exposed individuals who were supplying chemicals and weapons to Russia in defiance of sanctions - Reuters.
Investigators have proven that chemicals under international sanctions, some of which are possible precursors for chemical weapons, were exported through this company in the past.
• Kazakhstan does not plan to join BRICS yet, - the press secretary of the country's president Berik Uali. The proposals to join BRICS were considered by the head of state "from the point of view of Kazakhstan's national interests." However, for now, President Kassym-Jomart Tokayev gives priority to the UN "as a universal and uncontested organization in which all current international problems can and should be discussed."
• China to tax super-rich Chinese on foreign investment profits - Bloomberg. According to the agency's sources, local tax authorities have been summoning some wealthy people in major Chinese cities for meetings in recent months to assess potential payments, including debts from previous years. Some of them have been asked to conduct this assessment themselves. China is in an economic depression, which is accompanied by a drop in state and local budget revenues. They need to stimulate the economy, but they don't want to turn on the printing press. So they are looking for other sources of income.
• The US has indicated the possibility of cutting military aid to Israel. The US is pressuring Israel to improve the situation of civilians in the war zone in the Middle East.
• Musk personally donated nearly $75 million to a political committee in support of Trump's election campaign in three months,
seeking to return the former president to the White House.
• Italy approves tough budget. Italy's far-right government has approved a budget for next year of about 30 billion euros, which officials say will be partly financed by a tax on Italian banks and insurance companies.