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U.S. STOCKS INCH LOWER AFTER JOBS REPORT

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US FINANCIAL MARKET
| US ECONOMY & POLITICS
 EUROPE & WORLD | TODAY IN HISTORY

U.S. STOCKS INCH LOWER AFTER JOBS REPORT

  • The U.S. economy added 156,000 jobs in September, the smallest gain since May.
  • The unemployment rate ticked up to 5%.
  • Hourly wages for private sector workers rose 2.6%.
  • “The uptick in both wage growth and the participation rate is good news for the economy,” said Mohamed El-Erian.
  • In currency markets, the British pound tumbles in volatile trading.
  • It had dropped to as low as $1.1819 during early Asian trading hours in just minutes.
  • Market participants said the decline in the pound was accelerated by computerized trades at a time of low liquidity.

US FINANCIAL MARKET

Hurricane Matthew to Test Catastrophe-Bond Market

  • Just over half of outstanding $22 billion in catastrophe bonds held by pension plans and other big investors have some exposure to Florida storms.
  • Catastrophe, or cat, bonds compensate buyers for taking on the risk of extreme events, such as hurricanes and earthquakes.

Honeywell CEO Addresses Surprise Shortfall

  • Honeywell now projects adjusted profit of $6.60 to $6.64 a share with sales down 1% to 2% from the year ago.
  • It previously projected $6.60 to $6.70 a share in profit with sales declining about 1%.
  • Honeywell said sales would fall 3% in the third quarter and that segment margin would narrow to a range of 17.3% to 17.5%.
  • In July, Honeywell had projected sales in the quarter to remaining flat or increase 1% from the year-ago period with segment margin in the 18.7% to 18.9% range.

PPG Industries Third-Quarter Profit to Miss Wall Street View

  • PPG Industries said its third-quarter earnings would come in well below expectations and that it was seeking to cut costs further amid soft economic conditions globally.
  • The company said volumes grew more than 1.5% in the latest period, hurt in part by slower-than-expected growth in Europe.
  • PPG also said its board approved a $2 billion share buyback program.

Gap’s Same-Store Sales Slide

  • Total sales fell 2% to $1.43 billion.
  • Comparable sales rose 4% in September at Old Navy, while declining 10% at Gap global and 9% at Banana Republic.

Snapchat Parent Working on IPO Valuing Firm at $25 Billion or More

  • IPO of virtual-messaging firm could take place as early as late March.
  • If Snap, best known for allowing users to send disappearing messages from their smartphones, moves forward as planned, it would be the biggest company to go public on a U.S. exchange since 2014.
  • That is when Chinese e-commerce company Alibaba made its debut at a $168 billion valuation.

Schwab Reduces Fees on Five of its ETFs

  • Move follows similar action by BlackRock earlier in the week.
  • Fees on the $3.2 billion Schwab U.S. Aggregate Bond ETF are falling to 0.04% from 0.05%.
  • The Schwab U.S. SmallCap ETF, with $3.9 billion in assets, now costs 0.06%, down from 0.07%.
  • Fees on the Schwab U.S. MidCap ETF fall to 0.06% from 0.07%, Schwab International Equity ETF to 0.07% from 0.08%, and on the Schwab Emerging Markets Equity ETF to 0.13% from 0.14%.

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US ECONOMY & POLITICS

U.S. Added 156,000 Jobs in September; Jobless Rate Rose to 5%

  • Higher unemployment rate seen as a positive: pointing to more Americans entering the workforce.
  • Wages accelerated last month. Private-sector workers earned, on average, $25.79 an hour in September, up 6 cents, or 0.2%, from a month earlier.
  • The average paycheck grew 2.6% over the past year.
  • The labor-force participation rate—the share of the overall population in the labor force—stood at 62.9% in September, up a tenth of a percentage point from August and a half-point from a year earlier.

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EUROPE & WORLD

Pound Plunges in Tumultuous Session, Putting Spotlight on Computerized Trading

  • Sharp move likely accelerated by computerized trades amid thin market volumes.
  • The pound fell more than 6% just after 7 a.m. Hong Kong time on Friday to as low as $1.1819 from just above $1.26, before recovering above $1.24.

German companies consider taking symbolic stake in Deutsche Bank

  • Some of Germany’s top industrial companies have revived a decades-old network to discuss the possibility of taking a symbolic stake in Deutsche Bank, aiming to help it through its current turmoil, an executive at one of the firms told Reuters.

IMF warns U.S. rate hike could disrupt Asian capital flows

  • “Should advanced economies continue to rely primarily on unconventional monetary policies to lift growth, this could lead to excess global liquidity, fanning capital flows to emerging market economies and contributing to excessive currency appreciation and deflation pressures,” the report said.

Worries Deepen That Globalization Is Hitting the Skids

  • Finance ministers and central bankers gathering in Washington this week face fears that an era of free trade and investment is ending.
  • Last year’s $646 billion in foreign direct investment in rich economies represents a 40% drop from the peak before the financial crisis.
  • International lending, as measured by cross-border banking claims at the Bank for International Settlements, is down nearly $2.6 trillion, or 9%, over the past two years.
  • International trade this year will grow at the slowest pace since 2007.

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TODAY in HISTORY

stamp-act-congress

The Stamp Act Congress convened in New York to draw up colonial grievances against England (1765)

flag_of_east_germany-svg

The Republic of East Germany was formed (1949)

mpaa-new-rating-system-1-22-07_thumb

The Motion Picture Association of America adopted its film-rating system, ranging from “G” for general audiences to “X” for adults only (1968)

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This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S&P 500, are unmanaged and may not be invested into directly. Sources: Reuters, Bloomberg, Wall Street Journal.

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