Market Update
U.S. Market Rally Pauses and Treasury Yields Turn Higher After Powell Comments
Barry Adams
09 Nov, 2023
New York City
Benchmark indexes drifted into the negative zone, and the indexes are set to halt a near two-week rally.
Stocks struggled as bond yields turned higher after dropping for the second week, and investors turned cautious after several days of market advance.
Treasury yields perked up after comments from Federal Reserve Chairman Powell in a panel discussion today suggested that it is too early to conclude that the rate hike campaign is over.
Chairman Powell was speaking today at a panel hosted by the International Monetary Fund in Washington, D.C.
The S&P 500 index halted the eight-day rally, and the Nasdaq Composite paused nine-day gains as investors reassessed recent market gains and the global economic backdrop.
During the last two weeks, market participants bid up high-growth and tech stocks after the Federal Reserve held short-term rates for the second time in a row earlier this month.
The move also sparked speculation that policymakers will keep rates steady at the next policy meeting in December, supporting rate stability.
Investors wasted no time in bidding up stocks, and the Nasdaq Composite and the S&P 500 index soared more than 5% in the previous and extended gains this week.
Moreover, softer nonfarm payroll data last week also supported the Fed's case for stable rates and reviewed the cumulative effect of multiple rate hikes since March 2022.
On the economic front, initial jobless claims declined to 217,000 last week, down from the two-month high of 220,000 in the week before, reported the U.S. Department of Labor on Thursday.
In international news, China's consumer and producer prices continue to weaken, highlighting weak domestic demand and cautious consumers.
China Battles Deflationary Forces
The Chinese economy is battling an uneven economic recovery after the end of COVID restrictions, and consumers are holding on to their cash because of the ongoing property market woes.
China's consumer price index declined 0.2% in October after a flat reading in September, the National Bureau of Statistics reported Thursday.
Food prices declined for the fourth month in a row and fell at the fastest pace in 25 months to 4%, but nonfood inflation was unchanged at 0.7%.
The producer price index accelerated the decline to 2.6% after a 2.5% decline in September, the statistical agency said in a separate report.
The measure of wholesale prices declined for the 13th month in a row.
Consumer goods prices fell at a faster pace, reflecting larger declines in food and durable goods prices.
U.S. indexes and Yields
The S&P 500 index decreased 0.4% to 4,366.69, and the Nasdaq Composite fell 0.3% to 13,614.25.
The yield on 2-year Treasury notes increased to 4.96%, 10-year Treasury notes inched higher to 4.60%, and 30-year Treasury bonds edged up to 4.78%.
Crude oil decreased $0.92 to $76.27 a barrel, and natural gas prices rose 2 cents to $3.07 a thermal unit.
Gold increased $14.04 to $1,963.86 an ounce after bond yields edged lower and the dollar weakened.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 105.52.
U.S. Stock Movers
Lyft declined 3.3% to $10.30 after the digital ride hailing company reported weaker-than-expected quarterly results and guided that weak bookings are expected to persist in the current quarter.
Disney jumped 4.3% to $88.12 after the theme park operator and media company reported better-than-expected quarterly results.
Disney also said it plans to expand its cost reduction plans.
Arm dropped 6.2% to $51.0 after the advanced semiconductor chip maker reported mixed quarterly results and offered a muted outlook for the current quarter.
MGM Resorts advanced 3% to $39.85 after the hotel and casino operator reported better-than-expected quarterly results and the company announced its stock repurchase plan.
European Markets Extends Weekly Gains
European market indexes extended the previous week's gains, and bond yields edged lower in choppy trading.
Benchmark indexes in London, Paris, and Frankfurt advanced between 0.3% and 0.6%, and investors snapped up real estate and banking sector stocks.
The CAC 40 index is set to extend weekly gains to the fifth week in a row and the DAX 30 index to the third week in a row.
Investors are bidding up stocks in the hopes that central banks will pause interest rate hikes at the next meeting in December, supporting rate stability till the end of January.
The European Central Bank, the U.S. Federal Reserve Bank, the Bank of England, and the Bank of Japan held their short-term interest rates.
Market participants are hoping that the recent weak retail sales data is likely to support the central bank's case to pause rates as the Eurozone economy adjusts to multiple rate hikes over the last fifteen months.
In listless trading, stocks lacked direction but managed to regain footing in the afternoon. The euro edged higher, and bond yields extended the recent decline to the second week.
Europe Indexes and Yields
The DAX index increased 0.8% to 15,352.54, the CAC-40 index rose 1.1% to 7,113.66, and the FTSE 100 index advanced 0.7% to 7,455.67.
The yield on 10-year German bonds increased to 2.65%, French bonds traded higher to 3.24%, the UK gilts edged up to 4.27%, and Italian bonds inched lower to 4.53%.
The euro rebounded to $1.068, the British pound at $1.22, and the U.S. dollar at 90.07 Swiss cents.
Brent crude increased $0.95 to $80.49 a barrel, and the Dutch TTF natural gas edged higher by €1.52 to €46.13 per MWh.
Europe Stock Movers
Arcelor Mittal SA declined 1.9% to €21.0 after the steel company reported lower revenue and earnings in the third quarter.
Airbus SE decreased 3.1% to €126.40 despite the aircraft maker posting a higher underlying third quarter profit and reiterating its annual delivery target financial outlook.
Flutter Entertainment plc dropped 8.5% to 12,500.0 pence after the online betting platform said it plans to delist its stock from the Irish Stock Exchange and list in the U.S.
AstraZeneca plc gained 2.8% to 10,458.0 pence after the drug company reported better-than-expected third-quarter results.
Taylor Wimpey plc increased 2.2% to 118.19 pence after the UK-based home builder reiterated its annual outlook.
Wizz Air Holdings PLC dropped 6.4% to 1,746.0 pence despite the budget airline estimating a narrower annual loss.
Henkel AG & Co. advanced 2.4% to €69.08 after the German consumer products maker lifted its annual estimate.
Merck KGaA jumped 4.9% to €155.25 after the German pharmaceutical company reported better-than-expected third-quarter results.
U.S. Movers: Arm Holdings, Lyft, MGM Resorts, Walt Disney
Scott Peters
09 Nov, 2023
New York City
Lyft declined 3.3% to $10.30 after the digital ride hailing company reported weaker-than-expected quarterly results and guided that weak bookings are expected to persist in the current quarter.
Revenue in the third quarter increased to $1.15 billion from $1.05 billion, net loss shrank to $12.1 million from $422.2 million, and diluted loss per share dropped to 3 cents from $1.18 a year ago.
Active riders increased to 22.4 million from 20.3 million, and revenue per active rider edged slightly lower to $51.67 from $51.88 a year ago.
The rebound in travel was reflected in the gross bookings for the ride services during the quarter.
Gross bookings jumped to $3.55 billion from $3.08 billion, and the company offered bookings to range between $3.6 billion and $3.7 billion in the fourth quarter.
The company lowered its growth outlook in the current quarter to grow in "mid-single-digits" from the previous quarter, and as a percentage of revenue, the fourth quarter adjusted EBITDA margin will be "roughly in line" with the 4% achieved in the second quarter.
Disney jumped 4.3% to $88.12 after the theme park operator and media company reported better-than-expected quarterly results and added plans to expand its cost reduction plans to $7.5 billion from $5.5 billion.
Revenue in the fiscal fourth quarter ending in September increased 5% to $21.2 billion from $20.2 billion, net income advanced to $694 million from $254 million, and diluted earnings per share rose to 14 cents from 9 cents a year ago.
Revenue in the entertainment segment, which includes television and streaming businesses, increased 2% to $9.5 billion; in the experiences segment, which includes theme parks, vacation clubs, and cruises, it rose 13% to $8.2 billion; and in sports, it was flat at $3.9 billion.
In the direct-to-consumer segment, which includes Disney+, Disney+ Hotstar, and Hulu, revenue increased 12% to $5.0 billion, and operating losses shrank to $420 million from $1.4 billion a year ago.
Arm Holdings dropped 6.2% to $51.0 after the advanced semiconductor chip maker reported mixed quarterly results and offered a muted outlook for the current quarter.
Total revenues in the fiscal second quarter ending in September increased 28% to $806 million from $630 million, but the company swung to a loss of $110 million from a profit of $114 million a year ago.
Diluted loss per share was 11 cents compared to earnings of 11 cents a year ago.
Remaining performance obligations, a measure of backlog, increased by 38% to $2.4 billion from $1.8 billion a year ago.
MGM Resorts advanced 3% to $39.85 after the hotel and casino operator reported better-than-expected quarterly results and the company announced its stock repurchase plan.
Revenue in the quarter increased to $3.97 billion from $3.4 billion, primarily because of a rebound in MGM China operations after the ending of COVID-related travel restrictions.
The company swung to net income of $211.8 million from $1.06 billion, and diluted earnings per share rose to 46 cents from a loss of $1.45 a year ago.
Las Vegas strip revenue, adjusted for the sale of The Mirage, decreased to $2.1 billion from $2.2 billion a year ago.
MGM China revenue soared to $813 million from $87 million, an increase of 829% from a year ago and 10% compared to the third quarter in 2019.
During the quarter, the company repurchased 13 million shares of its common stock for $572 million, and about $806 million are still available in the current stock repurchase plan.
The company's board also approved a new stock repurchase program of $2 billion, in addition to the existing February 2023 stock buyback plan.
Advances In Tech Stocks Extend Longest Rally In Two Years
Barry Adams
09 Nov, 2023
New York City
Stocks continued to advance after bond yields extended recent declines and crude oil edged lower.
The S&P 500 index extended gains to the ninth session in a row, and the Nasdaq Composite edged higher for the tenth consecutive day after interest rate uncertainties receded.
Market participants bid up high-growth and tech stocks after the Federal Reserve held short-term rates for the second time in a row.
The move also sparked speculation that policymakers will keep rates steady at the next policy meeting in December, supporting rate stability.
Investors wasted no time in bidding up stocks, and the Nasdaq Composite and the S&P 500 index soared more than 5% in the previous and extended gains this week.
Moreover, softer nonfarm payroll data last week also supported the Fed's case for stable rates and reviewed the cumulative effect of multiple rate hikes since March 2022.
On the economic front, initial jobless claims declined to 217,000 last week, down from the two-month high of 220,000 in the week before, reported the U.S. Department of Labor on Thursday.
U.S. indexes and Yields
The S&P 500 index increased 0.04% to 4,383.51, and the Nasdaq Composite increased 0.05% to 13,651.09.
The yield on 2-year Treasury notes increased to 4.96%, 10-year Treasury notes inched higher to 4.54%, and 30-year Treasury bonds edged down to 4.68%.
Crude oil decreased $0.94 to $76.26 a barrel, and natural gas prices rose 2 cents to $3.07 a thermal unit.
Gold increased $4.54 to $1,954.86 an ounce after bond yields edged lower and the dollar weakened.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 105.52.
U.S. Stock Movers
Lyft declined 3.3% to $10.30 after the digital ride hailing company reported weaker-than-expected quarterly results and guided that weak bookings are expected to persist in the current quarter.
Disney jumped 4.3% to $88.12 after the theme park operator and media company reported better-than-expected quarterly results.
Disney also said it plans to expand its cost reduction plans.
Arm dropped 6.2% to $51.0 after the advanced semiconductor chip maker reported mixed quarterly results and offered a muted outlook for the current quarter.
MGM Resorts advanced 3% to $39.85 after the hotel and casino operator reported better-than-expected quarterly results and the company announced its stock repurchase plan.
Europe Movers: Airbus, Arcelor Mittal, AstraZeneca, Flutter Entertainment, Henkel, Merck, Taylor Wimpey, Wizz Air
Inga Muller
09 Nov, 2023
Frankfurt
Benchmark indexes in Europe advanced and extended weekly gains after rate uncertainties receded.
The DAX index increased 0.4% to 15,291.50, the CAC-40 index rose 0.6% to 7,079.90, and the FTSE 100 index advanced 0.3% to 7,420.84.
The yield on 10-year German bonds increased to 2.65%, French bonds traded higher to 3.24%, the UK gilts edged up to 4.27%, and Italian bonds inched lower to 4.53%.
Arcelor Mittal SA declined 1.9% to €21.0 after the steel company reported lower revenue and earnings in the third quarter.
Airbus SE decreased 3.1% to €126.40 despite the aircraft maker posting a higher underlying third quarter profit and reiterating its annual delivery target financial outlook.
Flutter Entertainment plc dropped 8.5% to 12,500.0 pence after the online betting platform said it plans to delist its stock from the Irish Stock Exchange and list in the U.S.
AstraZeneca plc gained 2.8% to 10,458.0 pence after the drug company reported better-than-expected third-quarter results.
Taylor Wimpey plc increased 2.2% to 118.19 pence after the UK-based home builder reiterated its annual outlook.
Wizz Air Holdings PLC dropped 6.4% to 1,746.0 pence despite the budget airline estimating a narrower annual loss.
Henkel AG & Co. advanced 2.4% to €69.08 after the German consumer products maker lifted its annual estimate.
Merck KGaA jumped 4.9% to €155.25 after the German pharmaceutical company reported better-than-expected third-quarter results.
Weaker Bond Yields Drive European Markets Higher and Extend Weekly Gains
Bridgette Randall
09 Nov, 2023
Frankfurt
European market indexes extended the previous week's gains, and bond yields edged lower in choppy trading.
Benchmark indexes in London, Paris, and Frankfurt advanced between 0.3% and 0.6%, and investors snapped up real estate and banking sector stocks.
Investors are bidding up stocks in the hopes that central banks will pause interest rate hikes at the next meeting in December, supporting rate stability till the end of January.
The European Central Bank, the U.S. Federal Reserve Bank, the Bank of England, and the Bank of Japan held their short-term interest rates.
Market participants are hoping that the recent weak retail sales data is likely to support the central bank's case to pause rates as the Eurozone economy adjusts to multiple rate hikes over the last fifteen months.
In listless trading, stocks lacked direction but managed to regain footing in the afternoon. The euro edged higher, and bond yields extended the recent decline to the second week.
Europe Indexes and Yields
The DAX index increased 0.4% to 15,291.50, the CAC-40 index rose 0.6% to 7,079.90, and the FTSE 100 index advanced 0.3% to 7,420.84.
The yield on 10-year German bonds increased to 2.65%, French bonds traded higher to 3.24%, the UK gilts edged up to 4.27%, and Italian bonds inched lower to 4.53%.
The euro rebounded to $1.068, the British pound at $1.22, and the U.S. dollar at 90.07 Swiss cents.
Brent crude increased $0.54 to $80.08 a barrel, and the Dutch TTF natural gas edged higher by €1.52 to €47.30 per MWh.
Europe Stock Movers
Arcelor Mittal SA declined 1.9% to €21.0 after the steel company reported lower revenue and earnings in the third quarter.
Airbus SE decreased 3.1% to €126.40 despite the aircraft maker posting a higher underlying third quarter profit and reiterating its annual delivery target financial outlook.
Flutter Entertainment plc dropped 8.5% to 12,500.0 pence after the online betting platform said it plans to delist its stock from the Irish Stock Exchange and list in the U.S.
AstraZeneca plc gained 2.8% to 10,458.0 pence after the drug company reported better-than-expected third-quarter results.
Taylor Wimpey plc increased 2.2% to 118.19 pence after the UK-based home builder reiterated its annual outlook.
Wizz Air Holdings PLC dropped 6.4% to 1,746.0 pence despite the budget airline estimating a narrower annual loss.
Henkel AG & Co. advanced 2.4% to €69.08 after the German consumer products maker lifted its annual estimate.
Merck KGaA jumped 4.9% to €155.25 after the German pharmaceutical company reported better-than-expected third-quarter results.
The S&P 500 and the Nasdaq Composite Pause, Treasury Yields Inch Lower
Barry Adams
08 Nov, 2023
New York City
The stock market struggled to hold early morning advances while attempting to extend the latest rally.
The S&P 500 index and the Nasdaq Composite extended the gains of the previous week after interest rate uncertainties receded, but popular indexes faced headwinds and erased morning gains.
Despite the choppy trading in the last five months, market indexes have managed to extend this year's gains because of several positive factors driving investors back to stocks.
Solid corporate earnings, resilient consumer spending, sustained economic growth, and an expanding labor market have helped investors overcome rate anxieties.
In addition, investors are hoping that the Federal Reserve may be able to navigate the U.S. economy to a soft landing and avoid future rate hikes.
The central bank is attempting to keep economic growth intact while slowing inflation to its target rate of 2% and keeping the labor market from shrinking.
For more than a year, most economists cautioned that the central bank is most likely to dip the economy into a recession and cause widespread job losses, increasingly seen as a less likely outcome by many market watchers.
Investors are feeling more confident that the Federal Reserve is likely to engineer a so-called soft landing, keeping the economy humming and inflation in check.
That change in stance by investors fueled a five-plus percent advance last week, the best weekly return in about a year.
Moreover, investors are hoping that the Federal Reserve will hold interest rates steady after the next policy meeting in December, clearing the deck for market advance all the way until the end of January, when the rate-setting committee regroups.
In today's trading, investors bid up big tech stocks and reacted to earnings releases but struggled to make more headway after rallying for seven sessions in a row.
The electric vehicle maker Rivian jumped more than 6% on better-than-expected quarterly results and production outlook; Robinhood fell 9% after transaction-based revenue declined 11% from a year ago; and Toast Inc. plunged 15% on worries of stronger macroeconomic headwinds.
U.S. indexes and Yields
The S&P 500 index decreased 0.02% to 4,377.71, and the Nasdaq Composite was nearly unchanged at 13,639.20.
The yield on 2-year Treasury notes increased to 4.93%, 10-year Treasury notes inched higher to 4.55%, and 30-year Treasury bonds edged down to 4.69%.
Crude oil decreased $1.89 to $75.51 a barrel, and natural gas prices rose 3 cents to $3.10 a thermal unit.
Gold decreased $19.48 to $1,948.92 an ounce after bond yields edged lower and the dollar weakened.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 106.65.
U.S. Stock Movers
Robinhood Markets Inc. dropped 12.4% to $8.55 after the online trading platform reported weaker-than-expected sales of $467 million in the third quarter.
Revenue in the third quarter increased by 29% to $467 million, driven by a 96% increase in net interest income to $251 million.
Net loss in the quarter shrank to $85 million from $175 million, and diluted loss per share fell to 9 cents from 20 cents a year ago.
Average revenue per user increased by 27% to $80, and monthly active users fell 16% to 10.3 million.
Net deposit inflow in the quarter was $4 billion, and assets under custody surged 34% to $87 billion, reflecting higher equity valuations and a continued net inflow of assets.
eBay declined 5.8% to $38.45 after the online marketplace reported mixed quarterly results.
Revenue in the third quarter increased 5% to $2.5 billion from $2.4 billion, the company swung to a net profit of $1.3 billion from a loss of $69 million, and diluted earnings per share increased to $2.47 from a loss of 13 cents a year ago.
The company guided fourth-quarter revenue to fall between $2.47 and $2.5 billion and diluted earnings per share between 70 cents and 75 cents.
eBay estimated full-year 2023 revenue to range between $10.02 billion and $10.08 billion and diluted earnings per share between $4.53 and $4.58.
European Markets Extend Recent Rally
European markets trended lower in cautious trading, and bond yields declined for the second week in a row.
Benchmark indexes in Frankfurt, London, and Paris fell after investors reassessed the economic outlook and future rate path.
The latest retail sales data suggests consumers are still challenged amid elevated food and energy prices and rising interest rates.
Euro Area Retail Sales Declined for Third Consecutive Month
Retail sales in the Euro Area decreased by 0.3% in September from the previous month and dropped by 2.9% from a year ago, Eurostat reported Wednesday.
The volume of retail trade declined by 1.9% for non-food products and by 0.9% for automotive fuels, while food, drink, and tobacco sales rose by 1.4%.
Among the largest economies in the currency union, retail sales declined by 0.8% and fell for the fourth consecutive month in a row in Germany, decreased by 0.4% in Italy, and edged lower by 0.8% in the Netherlands.
However, sales in France rose by 0.4%, and sales in Spain edged up by 0.2%.
Europe Indexes and Yields
The DAX index increased 0.5% to 15,229.62, the CAC-40 index rose 0.7% to 7,034.16, and the FTSE 100 index decreased 0.1% to 7,401.72.
The yield on 10-year German bonds decreased to 2.64%, French bonds traded lower to 3.23%, the UK gilts edged down to 4.26%, and Italian bonds inched higher to 4.54%.
The euro rebounded to $1.066, the British pound at $1.22, and the U.S. dollar at 90.20 Swiss cents.
Brent crude decreased $2.03 to $79.63 a barrel, and the Dutch TTF natural gas edged higher by €0.28 to €45.78 per MWh.
Europe Stock Movers
Credit Agricole SA increased 1.8% to €11.79 after the French bank reported better-than-expected earnings in the third quarter.
Continental AG jumped 2.2% to €63.14 after the company reported slightly higher earnings in the latest quarter.
Consolidated sales in the third quarter declined 1.5% to €10.2 billion from €10.4 billion, but net income increased to €299 million from a loss of €211 million.
The company tightened its consolidated annual sales outlook to between €41.0 billion and €43.0 billion, up from the previous range of between €41.5 billion and €44.5 billion.
The company also slightly raised its adjusted operating earnings margin outlook to between 12.5% and 13.5% from the previous range of between 12% and 13%.
Commerzbank AG declined 3% to €10.08, despite the German bank reporting profit in the third quarter that more than tripled.
ITV plc decreased 5.6% to 61.92 pence after the British television network operator reported flat revenue.
Serco Group plc gained 1.3% to 146.0 pence after the company won a £200 million monitoring service contract for the Ministry of Justice.
Marks & Spencer Group plc soared 10.6% to 249.17 pence after the retailer reported a jump in profit in the fiscal first half.
Revenue in the first half jumped 10.8% to £6.1 billion from £5.5 billion in the corresponding period a year ago.
Statutory profit in the first half jumped to £325.6 million from £208.5 million, and basic earnings per share increased to 10.6 pence from 8.5 pence a year ago.
ABN AMRO Bank dropped 9.5% to €11.91 after the Dutch bank reported weaker-than-expected net interest income in the third quarter because of deposit migration to higher-yielding products.
Net income in the quarter increased to €759 million from €743 million, and earnings per share rose to 85 cents from 80 cents a year ago.
Net interest income increased 20% from a year ago to €1.5 billion but fell from the previous quarter because of deposit migration and lower results in trading activities.
U.S. Movers: eBay, Rivian, Roblox, Robinhood Markets, Toast
Scott Peters
08 Nov, 2023
New York City
Robinhood Markets Inc. dropped 12.4% to $8.55 after the online trading platform reported weaker-than-expected sales of $467 million in the third quarter.
Revenue in the third quarter increased by 29% to $467 million, driven by a 96% increase in net interest income to $251 million.
Transaction-based revenues decreased 11% from a year ago to $185 million, driven by a decline in equities trading by 13% to $27 million, crypto trading by 55% to $23 million, and flat options trading of $124 million.
Net loss in the quarter shrank to $85 million from $175 million, and diluted loss per share fell to 9 cents from 20 cents a year ago.
Average revenue per user increased by 27% to $80, and monthly active users fell 16% to 10.3 million.
Net deposit inflow in the quarter was $4 billion, and assets under custody surged 34% to $87 billion, reflecting higher equity valuations and a continued net inflow of assets.
eBay Inc. declined 5.8% to $38.45 after the online marketplace reported mixed quarterly results.
Revenue in the third quarter increased 5% to $2.5 billion from $2.4 billion, the company swung to a net profit of $1.3 billion from a loss of $69 million, and diluted earnings per share increased to $2.47 from a loss of 13 cents a year ago.
The company guided fourth-quarter revenue to fall between $2.47 and $2.5 billion and diluted earnings per share between 70 cents and 75 cents.
eBay estimated full-year 2023 revenue to range between $10.02 billion and $10.08 billion and diluted earnings per share between $4.53 and $4.58.
Toast Inc. plunged 16.5% to $14.39 after the restaurant software developer swung to a quarterly loss.
Revenue in the quarter rose 34% to $1.03 billion from $752 million, net loss shrank to $31 million from $98 million, and diluted loss per share declined to 9 cents from 19 cents a year ago.
Gross payment volume soared 34% to $33.7 billion, and the average revenue run rate in the third quarter was up 40% to $1.218 billion.
However, the stock fell on worries that the macroeconomic headwinds may continue to negatively impact same-store sales and slow gross volume through the platform.
For the full year 2023, Toast expects revenue in the range of $3.83 billion to $3.86 billion, up from the previous range between $3.81 billion and $3.87 billion.
Roblox Corp. jumped 15.2% to $40.44 after the company reported stronger-than-expected quarterly results.
Revenue in the third quarter increased 38% to $713.2 million from $517.7 million, net loss declined to $277.8 million from $301.9 million, and diluted loss per share fell to 45 cents from 50 cents a year ago.
Bookings on the platform jumped 20% to $839.5 million, and average daily active users soared 20% to 70 million.
Rivian Automotive Inc. fell 4.5% to $16.63 after the company reported quarterly results and a weak production outlook.
Revenue in the third quarter jumped to $1.1 billion from $536 million, net loss fell to $1.4 billion from $1.8 billion, and diluted loss per share decreased to $1.19 from $1.57 a year ago.
During the quarter, vehicle deliveries jumped to 15,564 from 6,584 a year ago.
The company increased 2023 production guidance by 2,000 to 54,000 vehicles.
U.S. Averages Attempt to Extend Longest Rally In Two Years
Barry Adams
08 Nov, 2023
New York City
The stock market continued its upward march as upbeat investors looked for bargains in tech and high-growth stocks.
The S&P 500 index and the Nasdaq Composite extended the gains of the previous week after interest rate uncertainties receded.
Investors are hoping that the Federal Reserve may be able to navigate the U.S. economy to a soft landing and avoid future rate hikes.
The Federal Reserve is attempting to keep economic growth intact while slowing inflation to its target rate of 2% and keeping the labor market from shrinking.
Investors are increasingly confident that the Federal Reserve is likely to engineer a so-called soft landing, driving the stock market higher and keeping inflation in check.
In today's trading, investors bid up big tech stocks and reacted to earnings releases.
The electric vehicle maker Rivian jumped more than 6% on better-than-expected quarterly results and production outlook; Robinhood declined more than 10% after transaction-based revenue declined 11% from a year ago; and Toast Inc. plunged more than 15% after the restaurant software company swung to a loss in the latest quarter.
U.S. indexes and Yields
The S&P 500 index increased 0.2% to 4,387.84, and the Nasdaq Composite increased 0.2% to 13,660.29.
The yield on 2-year Treasury notes increased to 4.93%, 10-year Treasury notes inched higher to 4.55%, and 30-year Treasury bonds edged down to 4.69%.
Crude oil decreased $0.71 to $71.67 a barrel, and natural gas prices rose 0.1 cent to $3.14 a thermal unit.
Gold decreased $9.40 to $1,959.82 an ounce after bond yields edged lower and the dollar weakened.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 106.65.
U.S. Stock Movers
Robinhood Markets Inc. dropped 12.4% to $8.55 after the online trading platform reported weaker-than-expected sales of $467 million in the third quarter.
Revenue in the third quarter increased by 29% to $467 million, driven by a 96% increase in net interest income to $251 million.
Net loss in the quarter shrank to $85 million from $175 million, and diluted loss per share fell to 9 cents from 20 cents a year ago.
Average revenue per user increased by 27% to $80, and monthly active users fell 16% to 10.3 million.
Net deposit inflow in the quarter was $4 billion, and assets under custody surged 34% to $87 billion, reflecting higher equity valuations and a continued net inflow of assets.
eBay declined 5.8% to $38.45 after the online marketplace reported mixed quarterly results.
Revenue in the third quarter increased 5% to $2.5 billion from $2.4 billion, the company swung to a net profit of $1.3 billion from a loss of $69 million, and diluted earnings per share increased to $2.47 from a loss of 13 cents a year ago.
The company guided fourth-quarter revenue to fall between $2.47 and $2.5 billion and diluted earnings per share between 70 cents and 75 cents.
eBay estimated full-year 2023 revenue to range between $10.02 billion and $10.08 billion and diluted earnings per share between $4.53 and $4.58.
Europe Movers: ABN AMRO, Commerzbank, Continental AG, Credit Agricole, ITV, Marks & Spencer, Serco
Inga Muller
08 Nov, 2023
Frankfurt
European markets lacked direction for the second day in a row after rallying the previous week.
September retail sales in the Euro Area declined 2.9% from a year ago as consumers battled elevated prices and rising interest rates.
The DAX index decreased 0.4% to 15,099.82, the CAC-40 index fell 0.2% to 6,974.08, and the FTSE 100 index declined 0.2% to 7,399.50.
The yield on 10-year German bonds decreased to 2.64%, French bonds traded lower to 3.23%, the UK gilts edged down to 4.26%, and Italian bonds inched higher to 4.54%.
Credit Agricole SA increased 1.8% to €11.79 after the French bank reported better-than-expected earnings in the third quarter.
Standalone revenue in the third quarter increased 19.2% to €6.3 billion, and net income surged 32.8% to €1.8 billion.
Positive results in corporate and investment banking overwhelmed the weakness in retail banking in France, and the asset management division saw stronger asset inflows of €13.7 billion in the quarter.
Continental AG jumped 2.2% to €63.14 after the company reported slightly higher earnings in the latest quarter.
Consolidated sales in the third quarter declined 1.5% to €10.2 billion from €10.4 billion, but net income increased to €299 million from a loss of €211 million.
The company tightened its consolidated annual sales outlook to between €41.0 billion and €43.0 billion, up from the previous range of between €41.5 billion and €44.5 billion.
The company also slightly raised its adjusted operating earnings margin outlook to between 12.5% and 13.5% from the previous range of between 12% and 13%.
Commerzbank AG declined 3% to €10.08, despite the German bank reporting a profit in the third quarter that more than tripled.
ITV plc decreased 5.6% to 61.92 pence after the British television network operator reported flat revenue.
Serco Group plc gained 1.3% to 146.0 pence after the company won a £200 million monitoring service contract for the Ministry of Justice.
Marks & Spencer Group plc soared 10.6% to 249.17 pence after the retailer reported a jump in profit in the fiscal first half.
Revenue in the first half jumped 10.8% to £6.1 billion from £5.5 billion in the corresponding period a year ago.
Statutory after-tax profit in the first half jumped 24.1% to £206.9 million from £166.7 million, and basic earnings per share increased to 10.6 pence from 8.5 pence a year ago.
ABN AMRO Bank dropped 9.5% to €11.91 after the Dutch bank reported weaker-than-expected net interest income in the third quarter because of deposit migration to higher-yielding products.
Net income in the quarter increased to €759 million from €743 million, and earnings per share rose to 85 cents from 80 cents a year ago.
Net interest income increased 20% from a year ago to €1.5 billion but fell from the previous quarter because of deposit migration and lower results in trading activities.
European Market Indexes Meandered, Euro Area Retail Sales Declined Third Consecutive Month
Bridgette Randall
08 Nov, 2023
New York City
European markets trended lower in cautious trading, and bond yields declined for the second week in a row.
Benchmark indexes in Frankfurt, London, and Paris fell after investors reassessed the economic outlook and future rate path.
The latest retail sales data suggests consumers are still challenged amid elevated food and energy prices and rising interest rates.
Euro Area Retail Sales Declined for Third Consecutive Month
Retail sales in the Euro Area decreased by 0.3% in September from the previous month and dropped by 2.9% from a year ago, Eurostat reported Wednesday.
The volume of retail trade declined by 1.9% for non-food products and by 0.9% for automotive fuels, while food, drink, and tobacco sales rose by 1.4%.
Among the largest economies in the currency union, retail sales declined by 0.8% and fell for the fourth consecutive month in a row in Germany, decreased by 0.4% in Italy, and edged lower by 0.8% in the Netherlands.
However, sales in France rose by 0.4%, and sales in Spain edged up by 0.2%.
Europe Indexes and Yields
The DAX index decreased 0.4% to 15,099.82, the CAC-40 index fell 0.2% to 6,974.08, and the FTSE 100 index declined 0.2% to 7,399.50.
The yield on 10-year German bonds decreased to 2.64%, French bonds traded lower to 3.23%, the UK gilts edged down to 4.26%, and Italian bonds inched higher to 4.54%.
The euro rebounded to $1.066, the British pound at $1.22, and the U.S. dollar at 90.20 Swiss cents.
Brent crude decreased $0.42 to $81.14 a barrel, and the Dutch TTF natural gas edged higher by €0.67 to €45.43 per MWh.
Europe Stock Movers
Credit Agricole SA increased 1.8% to €11.79 after the French bank reported better-than-expected earnings in the third quarter.
Continental AG jumped 2.2% to €63.14 after the company reported slightly higher earnings in the latest quarter.
Consolidated sales in the third quarter declined 1.5% to €10.2 billion from €10.4 billion, but net income increased to €299 million from a loss of €211 million.
The company tightened its consolidated annual sales outlook to between €41.0 billion and €43.0 billion, up from the previous range of between €41.5 billion and €44.5 billion.
The company also slightly raised its adjusted operating earnings margin outlook to between 12.5% and 13.5% from the previous range of between 12% and 13%.
Commerzbank AG declined 3% to €10.08, despite the German bank reporting profit in the third quarter that more than tripled.
ITV plc decreased 5.6% to 61.92 pence after the British television network operator reported flat revenue.
Serco Group plc gained 1.3% to 146.0 pence after the company won a £200 million monitoring service contract for the Ministry of Justice.
Marks & Spencer Group plc soared 10.6% to 249.17 pence after the retailer reported a jump in profit in the fiscal first half.
Revenue in the first half jumped 10.8% to £6.1 billion from £5.5 billion in the corresponding period a year ago.
Statutory profit in the first half jumped to £325.6 million from £208.5 million, and basic earnings per share increased to 10.6 pence from 8.5 pence a year ago.
ABN AMRO Bank dropped 9.5% to €11.91 after the Dutch bank reported weaker-than-expected net interest income in the third quarter because of deposit migration to higher-yielding products.
Net income in the quarter increased to €759 million from €743 million, and earnings per share rose to 85 cents from 80 cents a year ago.
Net interest income increased 20% from a year ago to €1.5 billion but fell from the previous quarter because of deposit migration and lower results in trading activities.
Tech Stocks Power Nasdaq 8-day Rally, Treasury Yields Declined Again
Barry Adams
07 Nov, 2023
New York City
The decline in Treasury yields supported a market advance for the seventh day in a row as investors snapped up tech stocks.
Market indexes traded higher after the S&P 500 index advanced for the seventh day in a row and the Nasdaq Composite advanced for the eighth session.
Microsoft jumped 1.6% to a record high of $362.45, Apple increased 1.7% to $182.34 and Google-parent Alphabet advanced 1% to $131.62.
Investors bid up stocks after the Federal Reserve paused rate hikes for the second time in a row on November 1 after citing progress on inflation.
In addition, after the Fed's rate decision, a softer increase of 115,000 in nonfarm payroll in October also supported the Fed's case of holding interest rates.
Market indexes soared more than 5% last week on the hopes that the Federal Reserve may hold rates for the third time in a row at the next meeting on December 12–13.
In the absence of any market-moving economic releases, investors are likely to focus on comments from Fed Chairman Jerome Powell and react to earnings announcements.
Chairman Powell is scheduled to deliver the Fed's assessment of the economy at two separate industry gatherings this week.
So far this month, the S&P 500 index has advanced 4.5% and the Nasdaq Composite has jumped 6.2%.
Investors are awaiting quarterly results from ebay, Rivian, and Lucid after the close of regular trading hours.
U.S. International Trade Deficit Widened In October
The trade deficit in the U.S. widened to $61.5 billion in September, following an upwardly revised $58.7 billion gap in August, the Bureau of Economic Analysis reported Tuesday.
Imports increased 2.7% from a year ago to $322.7 billion, and exports rose at a slower 2.2% pace to $261.1 billion.
Exports rose to the highest level since August 2022, driven by crude oil, soybeans, corn, travel, and transport services.
Imports advanced on the rising demand for cell phones, civilian aircraft parts and machinery, passenger cars, and computer accessories.
U.S. indexes and Yields
The S&P 500 index increased 0.4% to 4,382.96, and the Nasdaq Composite increased 1.1% to 13,664.09.
The yield on 2-year Treasury notes increased to 4.89%, 10-year Treasury notes inched higher to 4.54%, and 30-year Treasury bonds edged down to 4.71%.
Crude oil decreased $3.11 to $77.69 a barrel, and natural gas prices fell 12 cents to $3.13 a thermal unit.
Gold decreased $8.16 to $1,969.42 an ounce after bond yields edged lower and the dollar weakened.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 105.75.
U.S. Stock Movers
Uber Technologies Inc. increased 1.7% to $48.96 despite the double-digit ride hailing company's weaker-than-expected quarterly results.
Revenue in the third quarter increased 11% to $9.3 billion from $8.3 billion, but the company swung to a loss of $1.3 billion from a profit of $221 million, and diluted earnings per share were ($0.61) compared to 10 cents a year ago.
Gross bookings in the quarter increased by 21% to $35.3 billion, driven by a 31% increase in mobility bookings to $17.9 billion and an 18% increase in delivery bookings to $16.1 billion.
Monthly active customers on the platform increased by 15% to 142 million from 124 million.
The company anticipates gross bookings in the fourth quarter in the range of $36.5 billion and $37.5 billion.
WeWork Inc. closed at 84 cents in Monday's trading but dropped as low as 11 cents in Tuesday's pre-market trading after the company filed for Chapter 11 bankruptcy protection in New Jersey federal court.
The company said its liabilities are between $10 billion and $50 billion and said it has entered into agreements with most of its secured note holders.
WeWork was valued at $47 billion in 2019 fund raising led by SoftBank but was forced to accept a sharply lower valuation of about $8 billion when it agreed to go public through a special purpose acquisition company in 2021.
TripAdvisor Inc. soared 10% to $17.76 after the online travel platform company reported better-than-expected quarterly results.
Revenue in the third quarter increased 16% to $533 million from $459 million, net income increased 8% to $27 million from $25 million, and diluted earnings per share rose to 19 cents from 17 cents a year ago.
On September 7, the company's board authorized a $250 million stock repurchase plan over the next two years.
European Indexes Drifted Lower and Bond Yields Eased
Stock market indexes in Europe traded down after China reported mixed international trade data.
Market indexes in Frankfurt, Paris, and London edged lower after China's exports declined for the sixth month in a row, but imports unexpectedly increased.
German industrial production declined for the fourth month in a row, and industrial producer prices in the eurozone declined at a record pace in September.
China Exports and Trade Surplus Dropped
Exports declined in October by 6.4% to $274.3 billion, and imports rose 3.0% to $218.3 billion, the General Administration of Customs reported Tuesday.
Imports rose for the first time since February, suggesting that the Chinese government's plan to stimulate the economy is having a positive impact.
Sluggish exports dragged the trade surplus in October to $56.5 billion from $77.7 billion in September.
Exports declined to the U.S. by 8.2%, Japan by 13.0%, ASEAN by 15.1%, South Korea by 17%, and the European Union by 12.6%.
German Industrial Production Fell for 4th Consecutive Month In September
Germany's industrial production declined for the fourth month in a row, highlighting ongoing economic weakness in the Euro Area's largest economy.
Industrial production declined 1.4% in September from the previous month, following the downwardly revised 0.1% fall in August, Destatis reported Tuesday.
On an annual basis, industrial production declined 3.7% from a year ago.
The sharp fall of 5% from the previous month in automobile production led to the decline in the month, followed by a 4.4% decline in electrical equipment and a 9.2% fall in the pharmaceutical industry, offset by a 4.1% rise in mechanical engineering.
Outside the manufacturing industry, energy production fell by 1.7% in September, and construction production was unchanged from the previous month.
Record Decline In Eurozone Producer Prices In September
Industrial producer prices declined 12.4% from a year ago in the euro area in September, Eurostat reported Tuesday.
The measure of wholesale prices dropped at the fastest pace on record, driven by a 31.3% plunge in energy prices and 4.8% in intermediate goods.
Meanwhile, prices rose at a slower pace of 3.9% compared to 4.4% in August for capital goods, durable goods inflation eased to 4.3% from 4.7%, and non-durable consumer goods slowed to 5.5% from 6.6%.
Excluding energy, producer price inflation decelerated to 0.5% from a year ago in September, down from 1.0% in August.
On a monthly basis, producer prices rose by 0.5%, the second month of an increase in a row.
UK Home Prices Extended Decline In October
UK home prices continued to fall in October as buyers struggled with elevated home prices and surging mortgage rates.
The Halifax House Price Index fell 3.2% from a year ago in October, following a revised 4.5% in September, Halifax and the Bank of Scotland reported Tuesday.
On an annual basis, home prices declined in all regions across the UK, with the Southeast leading with a fall of 6.0% and London property prices easing by 4.6%.
On a monthly basis, home prices rose 1.1%, following a decline for six months in a row due to the lack of availability of homes for sale.
Europe Indexes and Yields
The DAX index increased 0.1% to 15,152.64, the CAC-40 index fell 0.4% to 6,986.23, and the FTSE 100 index fell 0.1% to 7,410.04.
The yield on 10-year German bonds decreased to 2.70%, French bonds traded lower to 3.29%, the UK gilts edged down to 4.30%, and Italian bonds inched higher to 4.52%.
The euro rebounded to $1.069, the British pound at $1.232, and the U.S. dollar at 89.99 Swiss cents.
Brent crude decreased $2.94 to $82.93 a barrel, and the Dutch TTF natural gas edged higher by €1.23 to €46.06 per MWh.
Europe Stock Movers
Energy and resource companies were in focus after China reported mixed international trade data and tensions in the Middle East receded.
BP plc fell 1.2% to 485.40 pence, Shell PLC dropped 1.5% to €30.79, and TotalEnergies SE eased 1.4% to €61.76.
UBS Group AG gained 3% CHF 22.54 after the Swiss banking group reported progress in trimming costs and stronger-than-expected client inflows.
Total revenue in the third quarter increased to $11.7 billion from $8.2 billion, and operating profit before-tax swung to a loss of $255 million from $2.3 billion.
Underlying profit before-tax, which excludes Credit Suisse integration charges, decreased to $844 million from $2.0 billion a year ago.
Watches of Switzerland Group PLC jumped 8.2% to €6.55 after the luxury watch retailer reported improving sales in its fiscal second quarter, and the retailer set the target to double its sales and profit by fiscal year 2028.
Persimmon plc increased 4.6% to 1,132.0 pence after the UK-based home builder lifted its estimate of new home completions.
Associated British Foods plc soared 6.4% to 2,237.0 pence after the Primark owner reported a 5% increase in annual income and the food company declared a special dividend.
Engie SA increased 2.1% to €15.46 after the French energy company said operating earnings for the nine-month period rose 14.7% to €8.3 billion from €7.3 billion in the same period a year ago.
The company also revised its annual outlook.