MARKET WRAPS
Watch For:
Weekly Jobless Claims; Preliminary Productivity and Costs for 3Q; Earnings from Apple, Eli Lilly, Starbucks
Today's Top Headlines/Must Reads:
- How Higher Rates for Longer Can Be Good News for the Economy
- Fed Takes Heart in a Supply-Side Boom
- The UAW Beat Detroit. Tesla Will Be a Different Beast
Opening Call:
Stock futures rose on Thursday after Jerome Powell hinted the Federal Reserve might be done raising rates for now, even if he was careful not to rule out another increase.
"While on the face of it, Powell was trying to come across as hawkish, markets weren't buying it especially since [Wednesday's] economic data showed that the economy appeared to be slowing," CMC Markets said.
European and Asian stocks climbed after the Fed decision, with Europe's Stoxx 600 index and Japan's Nikkei 225 both rising more than 1%.
The Bank of England will announce its interest rate decision later on Thursday. It last held rates back in September and is expected to do so again today .
Premarket Movers
Airbnb forecast fourth-quarter revenue of between $2.13 billion and $2.17 billion, below expectations of $2.18 billion. Shares fell 2.1%.
DoorDash delivered its strongest quarter since going public in 2020, reporting record revenue and orders as well as its narrowest loss. Its shares rose 9% in thin premarket trading.
Etsy was down 4% after it warned of a decline in gross merchandise sales for the fourth quarter, with CEO Josh Silverman saying there's "no doubt this is an incredibly challenging environment for spending on consumer discretionary items."
Electronic Arts reported fiscal second-quarter net revenue of $1.91 billion, up from $1.9 billion a year earlier and better than analysts' forecasts of $1.8 billion. EA said it expects fiscal 2024 net revenue of $7.3 billion to $7.7 billion versus analysts' forecasts of $7.57 billion. EA shares rose 5.8%.
Mondelez said Wednesday that its revenues were strong around the world, driven by higher prices and sales volumes. Its shares rose 1.8% premarket.
Novo Nordisk's third-quarter earnings and revenue surged as it continues to benefit from the popularity of its weight-loss drugs. U.S.-listed shares of Novo Nordisk were up 2.5%.
PayPal beat Wall Street's expectations and the payments company raised its full-year earnings forecast. The stock was rising 6.1% in premarket trading.
Qualcomm issued a fiscal first-quarter revenue forecast of $9.1 billion to $9.9 billion, above the consensus of $9.2 billion at the midpoint of the range. It expects earnings in the period of between $2.25 and $2.45 a share, above estimates of $2.22. Shares rose 4.1%.
Roku's shares rose around 19% in premarket trading after its fourth-quarter revenue outlook was stronger than Wall Street expected.
SolarEdge was falling 17% in premarket trading after the company reported a surprise loss and a 13% drop in third-quarter revenue and issued a weak revenue forecast for the fourth quarter, citing a "slow market environment."
Forex:
The window for dollar strength remains open but the lack of its appreciation in October as bond yields surged increases the risks of the scale of dollar gains being more modest than expected by MUFG.
"As the economy slows, more Fed cuts will be priced and with that dollar weakness will unfold in 1H 2024," MUFG added.
Energy:
Oil prices pushed higher despite inventories for crude oil rising in the U.S. and the Federal Reserve keeping the door open for further rate hikes down the line.
The risk of further fallout from the Israel-Hamas war was keeping prices higher.
BMI raised its 2023 average price forecast by $1 a barrel to $84 a barrel late Wednesday, saying geopolitical risks would support Brent crude in the near term.
Metals:
Base metals and gold prices rose as an improving macro environment and weakening dollar helped ease pressure on commodities backed by the greenback.
TODAY'S TOP HEADLINES
Six Flags, Cedar Fair Strike Big Theme-Park Merger
Six Flags and Cedar Fair are joining forces in a roughly $2 billion all-stock deal to form a powerhouse in the regional theme-park industry.
Six Flags shareholders will receive 0.58 share of common stock in the new company for each share they own, company executives told The Wall Street Journal. Cedar Fair unit holders will receive one share for each unit they own. The company is structured as a master limited partnership.
Shell Launches $3.5 Bln Buyback After Earnings Rose on Higher Energy Prices
Shell launched a $3.5 billion share buyback program after third-quarter earnings rose on higher refining margins, oil prices and sales, but slightly missed market expectations.
The London-based company on Thursday reported adjusted earnings of $6.22 billion for the quarter, up from $5.07 billion in the preceding quarter, but slightly missing market expectations of $6.25 billion provided by Vara Research.
Disney to Pay Comcast's NBCUniversal at Least $8.61 Billion for Its Stake in Hulu
Disney said Wednesday it expects to pay Comcast's NBCUniversal at least $8.61 billion for its stake in Hulu, as the companies continue complex negotiations over the future of the streaming video service.
Disney's announcement came after Comcast exercised its option, as part of a long-held agreement between the companies, to sell its minority stake in Hulu. Disney controls two-thirds of the service, while Comcast owns one-third.
Japan Cabinet Approves $113 Billion Stimulus to Ease Impact of Inflation
TOKYO-Japan's cabinet on Thursday approved an economic stimulus package worth more than $110 billion, including income tax cuts, part of Prime Minister Fumio Kishida's program to lessen the impact of inflation as his approval rate falls.
Under the package totaling 17 trillion yen ($112.61 billion), the government plans to cut income and resident taxes in June 2024.
Concrete Has a Big Carbon Footprint. Can Green Tech Fix It?
ARLINGTON, Va.-At concrete plants across the world, diesel mixer trucks take in a polluting blend of sand, gravel, water and cement. A facility outside Washington, D.C., is adding a new ingredient to clean up the process: carbon dioxide.
The hybrid material-known as "green" concrete-reduces the carbon footprint of one of the dirtiest industrial sectors in the world and is emerging as an alternative to carbon storage options such as underground wells and pipelines that require regulatory approval and local support.
Apple earnings are on deck, and Wall Street isn't feeling so cheery
How is the iPhone 15 doing in a choppy economic environment? Investors are about to find out.
Apple Inc.'s AAPL September-quarter results, due out Thursday afternoon, should offer an early glimpse of the iPhone 15's performance, as the period included just over a week's worth of sales of the consumer-electronics giant's new lineup. Management's commentary on the earnings call will tell even more of the story.
China, U.S. to Meet for Rare Nuclear Arms-Control Talks
The Biden administration is preparing to hold a rare discussion with China on nuclear-arms control as the U.S. seeks to head off a destabilizing three-way arms race with Beijing and Moscow.
The meeting scheduled for Monday is the first such talks with Beijing since the Obama administration and will focus on ways to reduce the risk of miscalculation, U.S. officials said.
George Santos Avoids Expulsion in House Vote
WASHINGTON-House lawmakers rejected an effort to expel Rep. George Santos (R., N.Y.), who made a series of bold fabrications in running for office and faces federal fraud charges related to his 2022 campaign.
The vote was 179 in favor of expulsion to 213 against, well short of the two-thirds threshold needed to remove a lawmaker from office. Nineteen lawmakers voted present and nearly two dozen more were absent.
Write to ina.kreutz@wsj.com
TODAY IN CANADA
Earnings:
Algoma Steel Gp 2Q
Andlauer Healthcare 3Q
ARC Resources 3Q
Barrick Gold 3Q
Bausch Health 3Q
Baytex Energy 3Q
BCE 3Q
Black Diamond Gp 3Q
Bombardier 3Q
Canadian Ntrl Rescs 3Q
Canfor 3Q
Canfor Pulp Pdcts 3Q
Cenovus Energy 3Q
Colliers Intl Grp 3Q
Crescent Pnt Energy 3Q
Doman Bldg Mtrls 3Q
Enerplus 3Q
Ero Copper 3Q
Fairfax Fncl Hldgs 3Q
First Majestic Silver 3Q
Gildan Activewear 3Q
Interfor 3Q
Jamieson Wellness 3Q
Labradr Iron Ore Rylt 3Q
Lightspeed Comm. 2Q
Maple Leaf Foods 3Q
Open Text 1Q
Pason Syss 3Q
Pembina Pipeline 3Q
Primo Water Corp 3Q
Profound Medical 3Q
Shopify 3Q
Tidewater Renwbls 3Q
Trisura Grp 3Q
Economic Calendar (ET):
Nothing scheduled
Stocks to Watch:
Bird Construction: Finalizes Agreement for LNG Site Early Works; As Part of a 50/50 General Partnership, Has Entered Into an Agreement for Early Works at a New LNG Project in Western Canada; Bird's Portion of the Contracts Exceeds $150 Million
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Cogeco 4Q Rev C$766.7M; 4Q EPS C$1.87; 4Q Adj EPS C$2.12; Sees FY24 Revenue Stable
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Lundin Mining 3Q Rev $992.2M; 3Q Consolidated Copper Production of 89,942 Metric Tons; 3Q Zinc Production of 49,774 Metric Tons; 3Q Adj EPS 11c; Increases Production Guidance for Caserones and Eagle
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Sigma Lithium:Company Increased the Exploration Potential of Phase 4 to Approximately 26Mt to 30Mt
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STEP Energy Services 3Q EPS C$0.28; 3Q Rev C$255.2M
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Taseko Mines 3Q EPS C$0.00; 3Q Adj EPS C$0.07; 3Q Rev C$143.8M
Expected Major Events for Thursday
08:45/ITA: Oct Italy Manufacturing PMI
08:50/FRA: Oct France Manufacturing PMI
08:55/GER: Oct Labour market statistics (incl unemployment)
08:55/GER: Oct Germany Manufacturing PMI
11:30/US: Oct Challenger Job-Cut Report
12:00/UK: UK interest rate decision
12:00/UK: Bank of England Monetary Policy Report
12:30/US: 3Q Preliminary Productivity and Costs
12:30/US: 10/28 Unemployment Insurance Weekly Claims Report - Initial Claims
(MORE TO FOLLOW) Dow Jones Newswires
11-02-23 0616ET
