DAILY MARKET REPORTS
- U.S. stocks eked out enough gains on Monday to push the Dow Jones Industrial Average and the Nasdaq Composite to fresh records ahead of the start of the third-quarter earnings season.
- Stocks hit several fresh records last week, lifted by mostly upbeat data showing the U.S. economy remains on firm footing.
- Overall, earnings at S&P 500 companies are expected to have increased 5% in the third quarter.
- GE dipped 2.8% and was the top drag on S&P after the conglomerate said it gave activist investment firm Trian Fund Management a board seat.
- Tesla was down 2.4% after the company pushed back the unveiling of the big rig truck until mid-November.
- Viacom slipped more than 5% after Citigroup downgraded the media company’s stock to “sell”.
- Medtronic dropped about 4% after the medical device maker said its second quarter 2018 earnings and sales would take a hit from hurricane Maria.
US FINANCIAL MARKET
Ten Years Ago, the S&P 500 Hit Its Last Record Before the Financial Crisis
- By the summer of 2007, U.S. investment banks and the Federal Reserve were struggling to contain the fallout from the mortgage meltdown, but many investors were still betting a crisis would be averted.
- The S&P 500 closed at a record on Oct. 9, 2007.
- It would be its last until March 2013.
- In the months that followed October 2007, stock indexes plunged, the U.S. economy fell into recession, and central banks around the world began pumping an unprecedented amount of monetary stimulus in order to stave off a deepening financial crisis.
- Some of the stock market’s most memorable downturns have occurred in October, including historic crashes in 1929, 1987 and 2008. But in most other years, the month has been surprisingly calm.
GE Gives Activist Trian a Seat on the Board
- GE named activist investor Trian Fund Management’s co-founder Ed Garden to its board.
- The move comes a week after GE’s longtime leader, Jeff Immelt, resigned from the company’s board. Since taking over, Mr. Flannery has been moving aggressively to revamp the conglomerate, replacing its finance chief and two other senior leaders on Friday.
- Trian first invested $2.5 billion in GE in 2015.
Wal-Mart to speed up returns for items bought online
- Under Wal-Mart’s Mobile Express Returns, starting in early November, customers can use the retailer’s app to return an item. The process can then be completed at “express” lanes in a store by scanning a QR code and handing over the item.
- The new process reduces the time taken for returning products at stores to as little as 30 seconds from the 5 minutes that the previous process required.
Tesla delays big rig truck debut; Model 3 in ‘production hell’
- Elon Musk on Friday pushed back the unveiling of the company’s big rig truck until mid-November, tweeting that the electric vehicle maker was diverting resources to fix production bottlenecks of its new Model 3 sedan and to help Puerto Rico.
- Musk said Tesla’s Model 3 was “deep in production hell” echoing his own comments in July, when he showed off some of the first cars of that model.
- The Palo Alto, California-based company delivered just 220 Model 3 sedans and produced 260 in the third quarter. It had planned to produce more than 1,500.
Alphabet Gets Approval for Giant Balloons to Restore Puerto Rico’s Wireless Service
- The FCC on Friday night granted an experimental license for Alphabet’s Project Loon to create a network of balloons that could provide connectivity.
- Libby Leahy, a spokeswoman for X, the Alphabet unit that oversees Project Loon, said in a statement that Loon “needs to be integrated with a telco partner’s [cellular] network—the balloons can’t do it alone.” She added that “we’ve been making solid progress” on that next step.
- It remained unclear when Loon might be able to start providing service.
Harvey Weinstein Fired After Sexual Harassment Allegations
- Weinstein, the Oscar-winning movie studio, fired co-founder and guiding creative force Harvey Weinstein.
- This is days after he stepped away from the company over allegations of sexual harassment stretching back decades.
- In an email on Sunday, the board informed “Weinstein that his employment is terminated, effective immediately.”
Dove faces PR disaster over ad that showed black woman turning white
- The 3-second video clip, posted on Dove’s U.S. Facebook page on Friday, reminded some social media users of racist soap adverts from the 19th century or early 20th century that showed black people scrubbing their skin to become white.
- Dove removed the clip and apologized, saying on Twitter that the post had “missed the mark in representing women of color thoughtfully”.
Hurricane Nate shuts down about 90% of Gulf of Mexico oil production
- More than 92% of oil production and nearly 78% of natural gas output in the U.S. Gulf of Mexico was offline on Sunday.
- Damage to offshore platforms and Gulf Coast refineries appears “minimal,” one analysts said.
- Nearly 100,000 customers across five states were without power on Sunday evening.
Mohamed El-Erian lists the major shocks that could derail the soaring stock market
- The Allianz chief economic advisor says he’s concerned about North Korea and a possible monetary policy mistake.
- El-Erian says investors have been “conditioned” to believe that central banks will always have their backs.
- The early promise of a “synchronized economic recovery” is not strong enough yet to warrant high asset prices, he says.
US ECONOMY & POLITIC
Nobel Prize in Economics Awarded to American Richard Thaler
- U.S. economist Richard Thaler won the Nobel Prize in economics Monday for his research on how human traits affect individual decisions as well as financial markets.
- The Royal Swedish Academy of Sciences recognized Mr. Thaler, a professor at the University of Chicago for more than two decades, for work that has helped bridge economic and psychological analyses.
- Mr. Thaler “has given us new insight into how human psychology shapes decision-making,” the academy said.
- Mr. Thaler told the academy and reporters: “The most important lesson is that economic agents are humans and that economic models have to incorporate that.”
- Mr. Thaler is from New Jersey and earned his Ph.D. from the University of Rochester in 1974. Since 1995, he has taught at the University of Chicago, following earlier stints at Rochester and Cornell University.
Pentagon Takes Control of F-35 Cost-Cutting Push
- The Pentagon is trying to make the program cost $400 billion more affordable.
- The U.S. plans to buy more than 2,400 of the jets over the next three decades to replace much of its combat fleet.
- The Pentagon has also yet to approve a plan announced last year for the three main companies to spend $250 million over five years to shave 10% off the running costs of the F-35 fleet over its lifetime, which are estimated to be more than $1.1 trillion for the U.S. aircraft.
- Allies plan to buy another 500 jets.
Google uncovered Russia-backed ads on YouTube, Gmail: WashPost
- Google has discovered that Russian operatives spent tens of thousands of dollars on ads on YouTube, Gmail, Google search and other products, The Washington Post reported on Monday.
- The ads do not appear to be from the same Kremlin-affiliated entity that bought ads on Facebook Inc, which may indicate a broader Russian online disinformation effort, the paper reported.
EUROPE & WORLD
OECD Indicators Show U.K., Russia as Weak Spots
- The combined output of the Group of 20 leading economies—the countries that account for most of the world’s economic activity—was 3.6% higher in the three months through June than in the same period of 2016.
- The global economy is set for continued strong growth into 2018, but the U.K. and Russia are likely to miss out, according to leading indicators released Monday.
IKEA stores’ full-year sales up 5 percent to 38 billion euros
- IKEA stores worldwide turned over a total of 38.3 billion euros ($44.9 billion) in the fiscal year through August, up 5 percent from a year earlier.
- The IKEA stores are owned by 11 franchisees, of which IKEA Group is the biggest with 355 stores.
TODAY in HISTORY
- For the first time the public was admitted to the Washington Monument. (1888)
- Aviator Laura Ingalls became the first woman to make a solo transcontinental flight across the United States. (1930)
- Soviet scientist Andrei Sakharov was awarded the Nobel Peace Prize for his work to end the nuclear arms race. (1975)
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