Tesla Stock Rising, Yield Sliding, Hot Stocks Roundup, and Fundamental News
Stock market news
• Fortunately, yields are easing as the end of the week approaches, relieving some of the anxiety that has weighed on stocks and allowing the weaker yen and euro to regain some balance against the dollar. But the relative calm feels like the eye of a storm, with risk events on the horizon next week: bumper earnings from five of the “Magnificent Seven” mega-caps; a crucial U.S. jobs report on Friday; and the final leg leading up to what is likely to be a decisive U.S. presidential election on Nov. 5.
• The Trump trade is gaining momentum, with some betting platforms seeing a sharp increase in the odds of a second Donald Trump presidency, even though polls show the race is almost even. The upshot of the market developments so far is that the dollar has been rising steadily for a fourth week and Treasury yields have been rising for a sixth week, driven by Trump's program of additional tariffs and taxes that many market participants see as inflationary.
• A flood of positive economic data from the U.S. has spurred a rapid reduction in Fed easing bets, which is also supporting yields and the dollar. Stocks are getting a brief reprieve to end the week, but it's far from a recovery. Optimism about Tesla's earnings drove most of Wall Street's limited overnight gains, and the Dow actually fell. Investors are now looking ahead to earnings from Alphabet, Amazon, Apple, Meta and Microsoft from Tuesday.
• Stock indices rose with TSLA (+22%). But most of the reporting stocks fell. Markets are calm in the morning.
• Japanese Finance Minister Katsunobu Kato expressed concern about the sharp fall in the yen, which hit its lowest in nearly three months at above 153 yen per dollar. The yen strengthened to 152.40 after he said he would step up monitoring of the currency market and speculative trading.
• Boeing (BA) shares fell after union machinists voted late Wednesday against the planemaker's latest proposal, meaning the ongoing strike will continue.
• Oil held mostly steady as traders continued to anticipate Israeli retaliation against Iran while the US sought a ceasefire in Gaza and Lebanon.
• Intel avoids €1bn EU fine after regulator fails to prove in court that rebates to PC makers were illegal. The European Commission previously fined Intel for giving rebates to Dell, Hewlett-Packard Co and Lenovo for buying most of their chips from Intel, in what regulators said was an attempt to block Advanced Micro Devices. Intel said it was pleased with the court's decision "and has finally put this part of the case behind us".
• Harley-Davidson (HOG) sales fell, leading to a cut to its 2024 outlook. Deliveries fell in the latest quarter due to lower demand for high-margin motorcycles. HOG shares fell 4%.
• Shares in gold miner Newmont (NEM) fell after the market digested disappointing earnings results as the world's leading gold producer struggles to control costs at its mines and benefit from rising bullion prices.
• Southwest Airlines (LUV) Ends Feud With Activist Investor Elliott - WSJ. Settlement Allows Focus on Business. But LUV Shares Slid 4% After Report
• The US Treasury Department has allowed mining companies to access subsidies for clean energy production.
The tax credit is aimed at stimulating American production of solar panels, lithium-ion batteries.
• S&P Global (SPGI) raised its full-year earnings forecast as demand for analytics increased. Expectations for further interest rate cuts are bolstering investor confidence in the health of the U.S. economy and boosting demand for market analytics to help investors invest more effectively. But SPGI shares fell 2% as valuations hit highs.
Union Pacific (UNP) earnings rose 9%
• Railroads increased freight volumes but results fell short of Wall Street expectations. UNP shares fell 5%.
Palladium jumped 9.5% on news that the United States had asked its G7 allies to consider sanctions on Russian exports of the precious metal.
• Honeywell (HON) forecasts weak full-year sales due to weakness in industrial automation. Weakness in its industrial automation business led to lower-than-expected quarterly sales, sending its shares down 4%.
• The Irish Data Protection Commission has fined LinkedIn (MSFT) €310 million for GDPR non-compliance. The company used user data to target ads.
• While LinkedIn has obtained consent from users to share such data with third parties for various purposes, including advertising, this consent was not explicit, informed, or unambiguous.
• Huawei Cloud's business in South Africa has been growing rapidly over the past five years. The company plans to launch more cloud solutions to expand market share and increase revenue, a company executive said on Thursday.
• A federal judge has blocked Tapestry's (TPR) planned $8.5 billion acquisition of Capri Holdings (owner of Versace, Jimmy Choo, and Michael Kors) on the grounds that the deal would hurt competition in the handbag industry. A Citi analyst wrote in April that Tapestry and Capri together would have about 12% of the global handbag market -- where's the monopoly? A very strange ruling. Tapestri will appeal. TPR shares are up 14%, valued at $10 billion.
CPRI is valued at $4.9 billion.
• Bitcoin Options Traders See $80,000 Price - Bloomberg No Matter Who Wins US Election
• S&P Global raises full-year profit forecast amid demand for analytics products.
• The bank's CEO said higher minimum reserve requirements in the Czech Republic would put pressure on deposit rates.
• BlackRock launches three targeted ETFs for investors looking to diversify risk.
• The US election campaign is creating a tense environment for Brazil's next interest rate decision.
• UniCredit is buying Commerzbank's share protection from Jefferies, a source said.
• KKR's quarterly profit surges on record high fee and commission income.
• Swiss bankers express concern over plans to tighten capital rules.
• India's IndusInd Bank reports unexpected fall in second-quarter profit on stress in microfinance sector.
• Lower rates will accelerate the shift by US banks to higher-yielding investments.
• Marsh says global commercial insurance rates are posting their first quarterly decline in seven years.
• TKO Group to acquire select Endeavor sports assets for $3.25 billion
• UK watchdog investigates Alphabet's Anthropic deal
• The US election campaign is creating a tense environment for Brazil's next interest rate decision.
• Boeing shares fall after workers reject latest offer.
• Pool Corp beats third-quarter profit estimates on demand for maintenance services.
• Canada's Rogers has failed to meet subscriber expectations due to declining demand and competition.
• Labcorp beat quarterly forecasts for diagnostic test demand.
• Nasdaq third-quarter profit rises on gains in fintech companies
• American Airlines raises profit forecast by raising prices and adjusting sales strategy.
• Harley-Davidson cuts full-year revenue forecast due to weak demand.
• Chinese company CATL has introduced a new battery for hybrids with an increased range.
Stocks Morning After Earnings Morning After Earnings
DLR +10%
SKX +7%
RMD +6%
COF +5%
LHX +4%
AJG 0%
HIG -3%
EW -4%
DXCM -4%
Capri Holdings (CPRI) shares are down 45% this morning.
Key events that could impact markets on Friday:
- German Ifo surveys (October)
- Earnings from Sanofi, Natwest and Mercedes-Benz
- IMF and World Bank meetings in Washington, DC
Fundamental news
• Eurozone economy continues to show weakness
Eurozone business activity data for October:
Headline PMI: 49.7 (previous 49.6).
Manufacturing PMI: 45.9 (previous 45.0).
Services PMI: 51.2 (previous 51.4).
There is an overall slowdown in UK business activity
UK business activity data for October:
Headline PMI: 51.7 (previous 52.6).
Manufacturing PMI: 50.3 (previous 51.5).
Services PMI: 51.8 (previous 52.4).
• US economic data points to strength in US economy
Composite PMI: 54.3 (previous 54.0).
Manufacturing PMI: 47.8 (previous 47.3).
Services PMI: 55.3 (previous 55.2).
Initial Jobless Claims: 227K (previous 241K). Labor market is strong.
But Fed's Beige Book shows weakening US economic activity
According to the report, nine out of 12 regional banks have reported stagnation or slight weakening of the economy since the beginning of September, including a slowdown in manufacturing and consumer demand.
Such data support expectations of a possible Fed rate cut in November and December by 0.25%.
• The US has proposed that the G7 agree on sanctions against titanium and palladium from Russia. The problem is that Europe depends on these metals and has not previously supported such sanctions.
• The US Justice Department has warned Musk over a $1 million raffle among voters. The daily raffle of $1 million for voters in swing states to sign a petition may violate federal law.
• Turkey's entry into BRICS blocked by India - Bild. Turkish President Recep Tayyip Erdogan wants to join the alliance and submitted an application for membership before the 16th summit of the alliance. Turkey's entry into BRICS is blocked by India. The reason for this is Ankara's good relations with Pakistan, which is hostile to India.
• Crown Prince of Saudi Arabia Mohammed bin Salman Al Saud did not come to BRICS. Saudi Arabia refused to join BRICS. Most likely because of the friendship of China and Russia with Iran.
• The Kazakh authorities have decided to extend the ban on the export of petroleum products outside the Eurasian Economic Union (EAEU) until December 31, 2026.
• The Sakharov Prize has been awarded to the leaders of the Venezuelan opposition. As the dpa agency notes, the finalists for the 2024 prize include two Middle East peace associations and the Azerbaijani anti-corruption activist Gubad Ibadoglu.
• The US is concerned about China's use of AI and says it could make countries vulnerable to coercion.
• European agency offers support to struggling space sector.
• Nvidia CEO Jensen Huang gets rock star treatment from Indian tech enthusiasts
• The White House is pushing for government use of artificial intelligence with security and safeguards in mind.
• UK watchdog investigates Alphabet's Anthropic deal
• IBM falls as slowing enterprise spending weighs on consulting growth.
• The EU data protection regulator has fined LinkedIn €310 million.
• Europe's top court rules Intel must drop long-running antitrust case.
• A European agency said it was in talks with SpaceX to combat space debris.