Corporate earnings reports at their peak, magnificent 7, European inflation, company news

Stock market news

• Earnings from the biggest tech companies remain in focus on Thursday, especially after the Bank of Japan's expected decision to keep policy on hold failed to provide any new trading signals. Apple and Amazon, two of the so-called "Magnificent Seven," report results to Wall Street on Thursday, followed by Meta and Microsoft on Wednesday and Alphabet the day before. Only AI darling Nvidia remains to report, although its earnings report is still three weeks away.

• Tesla was on a roll last week, pleasing investors with bold electric vehicle sales forecasts. Alphabet maintained its momentum, beating earnings and revenue estimates on strong YouTube ad sales and its cloud business. But sentiment soured overnight after Microsoft and Meta reported a sharp rise in AI spending, leaving investors worried about what Amazon would say about it. Alphabet also noted on Tuesday that AI spending would remain high, but that didn’t appear to be a trend at this point in the week.

• The AI ​​craze has driven Wall Street and, by extension, many global stock markets to all-time highs this year, so any sign of weakness in the rally’s fundamentals is likely to shake up markets. Consider AMD’s 10% overnight plunge on disappointing AI chip sales, dragging down not just Nvidia but other chipmakers as well.

 • Bank earnings remain in focus in Europe, with BNP Paribas, SocGen and ING among the lenders in the market today. Bank Santander's international banking conference in Madrid will feature speakers including Bank of Spain Governor Jose Luis Escriva and Dutch Central Bank Governor Klaas Knot. Traders are looking for hints that the ECB will speed up rate cuts and that inflation will fall faster than officials initially expected.

• Bundesbank President Joachim Nagel said on Wednesday that "price stability is within reach", the same day that French central bank chief Francois Villeroy de Galhau said victory over excessive inflation was "at hand". Eurozone and national inflation data are due later today, along with German retail sales data.

• The Fed's preferred measure of inflation, the personal consumption expenditure (PCE) deflator, is due out today ahead of potentially important monthly payrolls data on Friday. The Fed's next policy decision is a week away, and reliable macroeconomic indicators have pointed to a patient approach to rate cuts lately, even if this week's data have provided mixed signals.

• The Bank of Japan reiterated the risks posed by the U.S. economy by holding off on raising rates today, although policymakers expressed confidence that they could continue to normalize policy in due course. One risk likely to be on their radar is Tuesday’s U.S. election, which opinion polls suggest is still too close, despite a shift in Donald Trump’s favor in financial markets and on some forecast sites. The biggest news for many Japanese today may have come from New York rather than Tokyo: Shohei Ohtani has helped the Los Angeles Dodgers win the World Series in his first season with the team. $700 million well spent, that’s for sure.

• The stock market looks weaker amid a wave of reports. Even good reports are starting to be sold. Apparently the market has climbed too high, and the post-election hangover is getting closer. The yield on 10-year US government bonds is hovering around 4.3% per annum. The dollar, gold and bitcoin are stable. Today, AAPL and AMZN reports are stable.

• Global gold demand grew by 5% in the third quarter and exceeded $100 billion - World Gold Council. The decline in demand from Asian countries is offset by increased demand from private investors in the West.

• The Fed will cut rates by at least another 0.25% before the end of 2024, in line with officials' forecasts - Larry Fink. However, built-in inflation is currently higher than ever. And against this backdrop, rates will not be as low as projected.

• Elon Musk's xAI startup valued at $40 billion xAI is in talks with investors about a funding round, escalating the tech industry's race to build cutting-edge generative AI technologies. The startup was last valued at $24 billion just a few months ago, when it raised $6 billion in the spring.

• The EU will impose a tariff of up to 45% on Chinese electric vehicles from today, increasing trade tensions between the world's leading exporters.

• The Nasdaq Composite hit an all-time high, with an average annual return of 10.8%. The index's rise was driven by rising shares of Alphabet, Google's parent company.

• Toyota reported a drop in sales and production for September 2024. Global production fell 8.5% to 949,583 units. Total sales fell 8% to 923,311 units.

• Samsung has seen its market value plummet by $122 billion due to AI lags and chip manufacturing issues. The company's shares have fallen 32% from their July 9, 2024, peak, with foreign investors selling about $10.7 billion worth of shares.

• Philip Morris will close two factories in Germany due to a steady decline in demand for cigarettes in Europe. Production at a tobacco processing plant in Berlin will cease in the first half of 2025.

• Volkswagen's profit fell 64% as sales in China slumped. Volkswagen stressed the urgent need to carry out large-scale plant closures and lay off tens of thousands of workers, the most drastic measures in the company's 87-year history. Third-quarter net profit fell to €1.57 billion from €4.34 billion a year earlier. Volkswagen shares fell more than 3% in Frankfurt.

• Oil rebounds after two days of decline as Middle East returns to focus

• Saudi Arabia's Riyadh Air has ordered 60 Airbus jets, the European aerospace maker said on Wednesday.

• Riyadh Air plans to begin passenger flights next summer.

• Shares of Super Micro Computer (SMCI) fell 33% Wednesday morning after Ernst & Young stepped down as its accounting firm. In July, the accounting firm raised concerns about issues such as transparency and internal controls related to financial reporting, according to a report released Wednesday.

• Caterpillar (CAT) shares fell the most in 2% after the automaker cut its sales forecast due to a slowdown in construction activity worldwide.

• Britain to sell £297bn in bonds to fund Labour's fiscal plans - Bloomberg UK bonds fell as investors balked at the new government's plan for historically high debt issuance and fiscal stimulus that could mean interest rates remain higher for a long time.

• U.S. Treasury to maintain auction sizes through January 2025, announcing $125 billion in refunds The U.S. Treasury Department said Wednesday it does not plan to increase the size of auctions to sell U.S. bonds "at least for the next several quarters."

• Reddit (RDDT) shares surged 42% as the company beat analysts' expectations for its results and outlook, marking its biggest intraday rally since its initial public offering.

• Apple is releasing new, more powerful versions of the MacBook Pro. The new line of MacBook Pro laptops will start at $1,599 for the 14-inch version, and the higher-end versions will feature more powerful M4 Pro and M4 Max processors.

• Chipotle Mexican Grill (CMG) reported third-quarter sales that missed Wall Street expectations. Investors are keeping expectations high for the chain after it has outperformed many rivals this year. CMG shares fell 8%.

• Shares of Eli Lilly (LLY) fell 6%. The drugmaker missed Wall Street expectations for third-quarter earnings due to weaker-than-expected sales of its obesity drug.

• Meanwhile, shares of rival AbbVie (ABBV) rose 2% as its earnings beat estimates thanks to sales of cutting-edge immunology and cancer treatments.

• Shares of Trump's social network fell by 22% yesterday. And this morning they are falling by another 5%. The dummy is flying.

• AbbVie raises 2024 profit forecast on strong sales of key drugs Skyrizi and Rinvoq.

• Garmin Raises Full-Year Outlook, Results Beat Expectations on Resilient Demand

• Chinese company BYD reported an 11.5% increase in net profit in the third quarter.

• GE HealthCare beat third-quarter profit estimates on strong demand for medical devices in the U.S.

• BYD appoints former Stellantis UK boss Davino to drive European expansion

• UK Budget 2024: Tax rises and health funding tracked as part of 'recovery Britain' plan

• Digital ad sellers jump as revenue from Google, Reddit and Snap points to robust demand

• Sources say China is urging carmakers to suspend investment in EU countries that maintain tariffs on electric vehicles.

• Kraft Heinz cuts full-year forecast as high prices hold back demand recovery

• Embraer's Eve secures $50 million Citi loan to finance development of 'flying car'

• Raiffeisen is not ready to leave Russia without compensation, the CEO said.

• UBS CEO continues to discuss investment plans with Swiss government.

• Caixabank in Spain appoints Tomás Muneza as non-executive chairman.

• The world's largest Chinese bank ICBC reports third-quarter profit growth of 3.8%.

• The Swiss National Bank is developing a new series of banknotes because cash is here to stay.

• Bank of China's third-quarter profit rose 4.4%.

• Caixabank's chairman will resign at today's board meeting, a source said.

• Virgin Money UK names insider Gergel Zaborsky as next CFO.

• Credit Agricole mortgage simulator under investigation in Italy.

• Super Micro Computer announces that Ernst & Young is stepping down as auditor of the company's shares.

• Verisk beat quarterly revenue estimates on demand for analytics products.

• Data leak prevention company MIND emerges from stealth mode, raises $11 million

• Fortive raises full-year profit forecast as automation demand drives quarterly growth

• CDW missed quarterly revenue expectations due to weak demand for hardware solutions.

• Global Payments' third-quarter profit fell on rising expenses. Global Payments is selling its healthcare software unit for $1.1 billion to focus on its core businesses.

• ADP Raises Full-Year Revenue Growth Forecast Following Acquisition of WorkForce Software.

• Garmin Raises Full-Year Outlook, Results Beat Expectations on Resilient Demand

• TE Connectivity beat quarterly revenue estimates on component demand.

Fundamental news

• Eurozone GDP data for Q3 2024:
Annual growth: +0.9% (+0.8% previous).
This shows that the economic recovery in the eurozone is accelerating.
The German economy unexpectedly grew by 0.2% in Q3 2024, avoiding recession.
Thanks to government and consumer spending.

• ADP US Private Sector Employment Report for October: 233K (previous 159K).
Such a significant increase indicates the stability of the US labor market and may influence the Fed's further monetary policy decisions.
US GDP Q3 unexpectedly slowed from +3.0% to 2.8%.

• China's economy showed sluggish improvement.
China Manufacturing PMI rose to 50.1 from 49.8 (expected 50.0).
China Non-Manufacturing PMI rose to 50.2 from 50.0 (expected 50.4).
The Bank of Japan kept its key rate at 0.25%, as expected.

• China plans to export 12.4% fewer refined oil products in November compared with this month. Chinese refiners have been struggling with falling profit margins of late, with throughput falling 10% to 12.6 million barrels per day in August as industry players curbed output to protect profits.

• US imposes new restrictions on high-tech investment in China. The US Treasury Department has unveiled a new rule that limits and monitors American investment in China in the areas of AI, computer chips and quantum computing.

• China launched the Shenzhou-19 manned spacecraft with three astronauts into orbit. The craft docked with the national orbital station Tiangong. Taikonauts Cai Xuzhe, Song Lingdong and Wang Haojie will remain in orbit until spring 2025.

• Israel discusses new US-led deal to end conflict with Hezbollah - Bloomberg

• Biden, Trump, Macron and Putin's movements were tracked by the fitness app used by their security guards - Le Monde. Using the Strava app, the guards of the French, American and Russian presidents unknowingly report their locations.

• The United States will defend South Korea by all possible means, including the use of nuclear weapons - US Defense Secretary Austin.

• Slovak Prime Minister Fico will make a six-day visit to China from October 31.