Rate Path and Recession Worries Dominate Volatile Global Markets

Barry Adams
04 Nov, 2022
New York City

Benchmark indexes advanced on the final day of a gloomy week when investors confronted labor market data, interest rate hikes and a batch of corporate earnings. 

At least for today, stocks rebounded after nonfarm payrolls expanded in October and wages rose in October, highlighting the resilience of the U.S. economy.  

Stocks jumped in early trading after employers expanded payrolls in October and bond yields traded near 15-year highs. 

Nonfarm payrolls increased 261,000 in October from the revised 315,000 in September, according to the monthly jobs report from the U.S. Bureau of Labor Statistics Friday. 

Healthcare, professional and technical services and manufacturing expanded led the payroll expansion in the month. 

A separate survey by the department showed unemployment rate increased to 3.7% in October from a 29-month low of 3.5% in September, 

The stronger-than-expected labor market data also supported the Fed's case of the need to cool down the economy and lift key lending rates. 

The yield on 2-year Treasury notes increased to 4.66%, 10-year Treasury note jumped to 4.17% and 30-year Treasury bonds edged up to 4.26%. 

Resources stocks led the gainers after oil jumped more than 4% and gold advanced from the recent lows. 

The S&P 500 index closed up 1.4% to 3,770.55 and the Nasdaq Composite index advanced 1.3% to 10,475.26. 

For the week, the S&P 500 index declined 3.3% and the Nasdaq Composite index dropped 6.0%. 

Crude oil jumped $4.50 t0 $92.45 a barrel and natural gas increased 51 cents to $6.48 a thermal unit. 

Gold jumped 3.1% or $51.66 to 1,680.59 an ounce and silver soared 6.2% or $1.37 to $20.86 an ounce. 

 

U.S. Stock Movers 

Carvana Company plunged 37.2% to $9.01 after the online used car retailer said total sales fell 3% and vehicle sales dropped 8% and net loss margin increased to 15%.

DraftKings Inc plunged 26.7% to $11.49 after the online sports betting company reported a quarterly loss that was smaller-than-expected by some analysts. 

DraftKings plunged after the company said that the company's business is vulnerable to an economic downturn and may be negatively impacted if consumer spending weakens. 

DoorDash Inc rose 6.30% to $50.66 after the local delivery services provider said September quarter orders rose 27% to 439 million, gross order volume jumped 30% to $13.5 billion. 

Third quarter revenue increased 33% to $1.7 billion from $1.28 billion a year ago. 

Net loss jumped to $295 million from $101 million and diluted loss per share rose to 77 cents from 30 cents a year ago. 

Funko Inc plunged 57.3% to $8.32 after the maker of licensed collectibles reported weaker-than-estimated third quarter results and guided a loss in the fourth quarter. 

Net sales in the third quarter increased 36.6% to $365.6 million and net income dropped 39.3% to $11.1 million from a year ago. 

Diluted earnings per share declined to 19 cents from 28 cents a year ago. 

The company guided full-year 2022 revenue between $1.29 billion and $1.33 billion and guided fourth quarter gross margin to decline because of seasonality and inventory management. 

Starbucks Corporation soared 8.2% to $91.66 after the coffee chain said fiscal fourth quarter results were negatively impacted by travel restrictions in China but North America comparable sales jumped 11%.

September quarter revenue increased 3% to $8.4 billion from $8.1 billion a year ago. 

Net income dropped to $878.3 million from $1.764.6 million and diluted earnings per share declined to 76 cents from $1.49 a year ago. 

In the quarter, the company opened 763 net new stores around the world totaling 35,711 stores. 

North America sales rose 6%, or 15% adjusted for an extra week in the previous year, to $6.1 billion on 11% increase in comparable store sales.  

Twilio Inc plunged 34.6% to $42.74 after the third quarter revenue growth slowed to 33% and the company guided fourth quarter revenue growth between 18% and 19%.

Cloud computing stocks took a beating on the worries that the industry maybe slowing faster-than-estimated. 

ZoomInfo Technologies declined 6.3%, Cloudflare plunged 18%, Bill.com fell 8.4% and ServiceNow declined 6.5%. 

 

European Markets Extend Weekly Gains

European markets soared after investors focused on domestic earnings and shrugged off worries of rising rates, supply chain difficulties and looming recession. 

The DAX index soared 3.1% to 13,528.64, the CAC-40 index advanced 3.5% to 6,459.83 and the FTSE 100 index increased 2.5% to 7,363.28. 

The euro held steady at 99.29 U.S. cents and the British pound traded near $1.13.  

Brent crude gained $3.40 to $98.14 and TTF natural gas rose 4.8% to 119.40 euros a MWh. 

Energy and metals stocks led the gainers after crude oil prices jumped 4% and natural gas prices soared 6%. 

Anglo America, Antofagasta, BHP Group and Rio Tinto led gainers and soared between 5% and 10%. 

Societe Generale SA jumped as much as 5% after the French bank reported weaker third quarter profit on rising revenues despite the challenging economic environment. 

Telefonica SA increased 3% to