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STOCKS RISE, SET TO SNAP LONGEST LOSING STREAK IN YEARS

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STOCKS RISE, SET TO SNAP LONGEST LOSING STREAK IN YEARS

  • Markets boosted by court ruling that government needs parliament to vote on Brexit.
  • Facebook’s third-quarter profit almost tripled thanks to its mobile-ad products.
  • Qualcomm reported strong results, due to new patent licensing deals in China as well as chip sales for smartphones in the country.
  • MetLife, Prudential, Lincoln National and Allstate log stronger-than-expected operating earnings, AIG disappoints.
  • 21st Century Fox posted first-quarter profit that exceeded analysts’ estimates as advertising boosted its cable division and motion-picture earnings rose.
  • The number of Americans filing for unemployment benefits rose to near a three-month high last week, but remained below a level associated with tightening labor market conditions.
  • US productivity compared with a year earlier, was flat in quarter.

US FINANCIAL MARKET

Facebook Profit Soars, but Growth Is Concern

  • “We’re making progress putting video first across our apps and executing our 10 year technology roadmap” said Mark Zuckerberg, Facebook founder and CEO.
  • Facebook reported they have 1.18 billion daily active users on average for September, an increase of 17% year-over-year.
  • Mobile DAUs were 1.09 billion, an increase of 22% year-over-year.
  • Mobile advertising revenue represented approximately 84% of advertising revenue, up from approximately 78% of advertising revenue in the third quarter of 2015.
  • Facebook said ad growth will slow next year, because the company will not increase the amount of ads in news feeds.
  • Net income rose to $2.38 billion from $896 million a year earlier.
  • Revenue rose to $7.01 billion from $4.5 billion a year earlier.

Qualcomm Tops Estimates on Strong Shipments and New Licences

  • Qualcomm last week announced a $39 billion deal to buy NXP, also benefited from some new product introductions and a restructuring that trimmed expenses.
  • Mr. Mollenkopf said the company’s flagship Snapdragon 820 chips have been selected for use in more than 150 products.
  • Google, for example, picked a new high-end variant called the Snapdragon 821 for its new Pixel handset, he said.
  • Qualcomm reported that total mobile chip shipments rose 4% during the most recent quarter to 211 million.
  • For the fourth period ended in September, Qualcomm said net income rose to $1.6 billion, up from the year-earlier figure of $1.06 billion.
  • Revenue rose to $6.2 billion from $5.5 billion.

‘Insurance Super Day’ Delivers Stronger-Than-Expected Results But AIG Disappoints

  • AIG swung to a quarterly profit but suffered a setback in its turnaround effort for its property-casualty insurance unit.
  • AIG posted operating income of $1.1 billion, up from $691 million the year before when results fueled activism from billionaire investors Carl Icahn and John Paulson.
  • AIG reported net income of $462 million in the current quarter, up from a loss of 231 million last year.
  • Revenue was down 5% year-over-year at $2.08 billion from $2.2 billion.

Metlife Net Income Down 52% Year-Over-Year

  • MetLife, in one of its last few quarters as the U.S.’s biggest life insurer by assets, said its results were buoyed by a 6% increase in net investment income to $5.2 billion.
  • Revenue decreased 2% year-over-year to $17.72 billion from $18.03 billion.
  • Net income reported at $571 million from $1.18 billion.
  • Net income includes $683 million, after tax, in net derivative losses reflecting changes in interest rates, equity markets and foreign currencies.

Charter Communications’ Revenue Rises 7.4%

  • The latest quarter includes Time Warner Cable and Bright House results.
  • Charter reported a profit of $189 million, compared with $54 million a year ago.
  • Revenue more than quadrupled, as revenue from video—the largest contributor to the top line—rose 3% to $4.09 billion on a pro-forma basis.
  • On a pro-forma basis, revenue rose 7.4% to $10.04 billion, driven by residential revenue growth of 6.7% and commercial revenue growth of 12.1%.
  • Internet revenue shot up 13% to $3.2 billion and Voice revenue also rose 3%, to $728 million respectively.

Fox Profit Tops Estimates as Ads, Subscriber Fees Lift Cable

  • Strong global ad revenue and affiliate fees buoyed Fox’s cable TV unit, its biggest business.
  • Total revenue increased 7.1 percent to $6.51 billion in the period, beating projections of $6.49 billion.
  • Revenue from cable TV, the company’s biggest business, advanced 10 percent to $3.81 billion. Profit rose to $1.38 billion.
  • Sales in filmed entertainment expanded 6.8 percent to $1.91 billion, while earnings more than doubled to $311 million, Fox said.
  • Broadcast TV revenue fell slightly to $1.04 billion. Profit in the division also declined, to $191 million.

Oil producer Apache posts smaller-than-expected loss

  • Oil and gas producer Apache reported a smaller-than-expected quarterly loss as the company’s cost-cutting measures helped offset weak oil prices.
  • Apache said it plans to add three rigs in the Midland Basin, located in the Permian Basin, in the fourth quarter.
  • The Houston-based company’s net loss narrowed to $607 million, from $4.14 billion a year earlier.
  • Total revenue fell 5.8 percent to $1.44 billion, but topped estimate of $1.39 billion.

Fannie Mae posts $3.2B profit in 3Q; paying $3B dividend

  • Mortgage giant Fannie Mae reported net income of $3.2 billion from July through September, up from $2 billion a year earlier.
  • Its losses declined on investments it uses to hedge against interest rate swings.
  • Washington-based Fannie Mae said it will pay a dividend of $3 billion to the U.S. Treasury next month.
  • With that payment, Fannie will have paid a total $154.4 billion in dividends.
  • Fannie received $116 billion from taxpayers when the financial crisis struck in September 2008.

Square’s made $1 billion in business loans, surprising even its own executives

  • Square, the payment company co-founded by St. Louis entrepreneur Jim McKelvey, has doled out $1 billion in loans to businesses through its Square Capital program.
  • The program rolled out its lending program 2 years ago and does not typically disclose how many business are using the program.
  • What’s more, many businesses are coming back for multiple rounds of funding, Square said.

Disney Earns Record Breaking $5.85 Billion at the Box Office

  • The company has made wise acquisitions in recent years, bringing such crowdpleasing powerhouses as Pixar, Marvel and Lucasfilm into their folds.
  • This year has seen a number of high profile Disney releases, such as Captain America: Civil War ($1.153 B), Finding Dory ($1.021 B), The Jungle Book ($966 M), and Zootopia ($1.023 B).
  • Even counting such box-office duds as Alice Through the Looking Glass ($299 M), The BFG ($242 M), The Finest Hours ($52 M), and Pete’s Dragon ($139 M), Disney’s overall investment strategy is paying off.

Wells Fargo says litigation costs could exceed provisions by $1.7 billion

  • Wells Fargo also said on Thursday that the U.S. Securities and Exchange Commission (SEC) is investigating the bank’s sales practices.
  • Wells Fargo in September agreed to pay regulators $185 million in a settlement over the case.
  • The company said it could not determine if a resolution of its sales practices could have a “material adverse effect” on its financial condition.

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US ECONOMY & POLITICS

U.S. Productivity Jumps in Third Quarter, Trend Remains Soft

  • Nonfarm business productivity, measured as the goods and services produced by American workers per hour, increased at a 3.1% seasonally adjusted annual rate in the third quarter
  • In the second quarter, productivity declined at a revised 0.2% rate, versus a prior estimate of down 0.6%.
  • Many economists expect the rate of output gains to slow again in the final three months of the year.

U.S. jobless claims rise; layoffs at five-month low

  • Initial claims for state unemployment benefits increased 7,000 to a seasonally adjusted 265,000, the highest level since early August.
  • Last week’s claims report has no bearing on October’s employment report, which is scheduled for release on Friday, as it falls outside the survey period.
  • Job cuts in October were concentrated in the computer industry, where employers announced 4,792 layoffs.
  • Most of the computer job cuts came from HP, which laid off another 4,000 workers last month.

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EUROPE & WORLD

China’s Huawei to Tap Into U.S. Market With New Mate 9 Smartphone

  • Company to sell flagship smartphone in the U.S. for the first time.
  • The U.S. release date is expected to be in January and the Mate 9 will likely be sold online, not through carriers.
  • While Alphabet Inc.’s Google Nexus 6P, manufactured by Huawei, was sold in the U.S. last year, the Chinese company hasn’t released its own flagship model in the U.S. until now.

European Commission invests over €220 million in green and low-carbon projects in Member States

  • The EU funding will spur additional investments leading to a total of €398.6 million to be invested into 144 new projects in 23 Member States.
  • The support comes from the LIFE programme for the Environment and Climate Action.
  • The LIFE programme is the EU’s funding instrument for the environment and climate action.
  • It has been running since 1992 and has co-financed more than 4 300 projects across the EU and in third countries, mobilising €8.8 billion and contributing €3.9 billion to the protection of the environment and climate.

OECD Annual Inflation Rate Rises for Third Straight Month

  • Consumer prices in 35 member states were up 1.2% from Sept. 2015, compared with 0.9% in Aug.
  • The pickup in inflation is set to continue over coming months as energy prices stabilize after sharp falls a year earlier.
  • However, economists warn that the pickup may not be sustained for long, with weak global economic growth continuing to keep a lid on the prices of many goods and services.

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TODAY in HISTORY

nemesis

The first Opium War between China and Britain broke out (1839)

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Panama proclaimed its independence from Colombia (1903)

Godzilla in a scene from the film. © Toho Co. Ltd. ALL RIGHTS RESERVED

Godzilla, the Japanese science fiction kaiju film, was released by Director Ishiro Honda on a budget of $175,000 (1954)

The Soviet Union sent the first animal, a dog named Laika, into space aboard the Sputnik II. Laika died in orbit (1957)

A Lebanese magazine broke the story of U.S. arms sales to Iran, leading to the Iran-Contra affair (1986)

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Carol Moseley-Braun became the first black woman elected to the U.S. Senate (1992)

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