DAILY MARKET REPORTS
- Bank of England raises interest rates for the first time in over a decade.
- President Donald Trump intends to nominate Federal Reserve governor Jerome Powell as the next chairman of the central bank.
- Facebook, which remains under scrutiny over alleged Russian propagandists’ activity during the election, was down 2.4% after reporting a jump in profit.
- Kraft Heinz reported its first sales increase since its namesake companies combined two years earlier.
- Shares in Credit Suisse rose 5% after the Swiss banking giant reported a jump in third-quarter net profit on strong growth in wealth management.
- Shares in Royal Dutch Shell gained 1.3% after the energy company said its third-quarter profit more than doubled from a year earlier.
- Apple is due to release results after the market closes Thursday.
US FINANCIAL MARKET
Facebook Profit Jumps 79%, no sign of impact from Russia issue
- Net income rose to $4.71 billion from $2.63 billion a year earlier.
- Facebook’s total advertising revenue rose 49 percent in the third quarter to $10.14 billion, about 88 percent of which came from mobile ads. Total revenue increased 47.3 percent to $10.33 billion beating analysts’ estimate of $9.84 billion.
- Facebook said about 2.07 billion people were using its service monthly as of Sept. 30, up 16 percent from a year earlier.
Tesla Drives Farther Off Course
- Elon Musk’s goals appear less realistic as Tesla again downshifts plans for its Model 3, reveals slowdown in older models.
- The company reported third-quarter sales of $3.0 billion and an adjusted loss of $2.92 a share on Wednesday afternoon, falling short of analyst estimates.
- Tesla burned through a record amount of cash during the period—some $1.4 billion.
- Tesla said it would build 10% fewer Model S and X vehicles in the fourth quarter than the third quarter.
- The outlook is even worse for the Model 3, the mass-market model that Tesla has struggled to build. It now expects to produce 5,000 a week by the first quarter of next year, another slippage in its timeline. And Tesla seemed to hint that key equipment to produce even more Model 3s hasn’t yet been installed, noting “it has always been our intention to implement that capacity addition after we have achieved a 5,000 per week run rate.” Its ultimate target is twice as many.
Kraft Heinz Sales Rise on Growth Outside U.S.
- Kraft Heinz reported higher sales in the latest period, breaking a string of declines, and the company projected growth will carry into the current quarter.
- Similarly, Kellogg and Mondelez reported higher sales in the latest period, driven in part by sales growth outside of the U.S.
- Net sales edged up 0.8% to $6.31 billion, as Europe and Canada helped offset a 0.4% decline in U.S., its largest market.
- Overall, third-quarter profit rose 12% to $944 million.
Qualcomm Profit Slides as Royalty Dispute Continues
- Profit plunged 89%, crippled by a $778 million charge related to a fine by Taiwanese regulators and Apple’s continued withholding of patent royalties on iPhones and iPads.
- Over all, Qualcomm on Wednesday reported fourth-quarter revenue of $5.91 billion, down 4.5% from the same period a year earlier.
- Profit was $168 million in the fourth quarter, down from $1.6 billion.
MetLife Swings to Loss on Brighthouse Charges
- Hurricanes reduced the third-quarter results of big insurers MetLife and Allstate with their large homeowner and car-insurance businesses, while the rallying stock market helped life insurers industrywide with products tied to market returns.
- Operating earnings declined 14% to $1.17 billion.
- Premiums, fees and other revenue increased 9.3% to $12.61 billion.
- Catastrophe-modeling firms have estimated insured losses from hurricanes Harvey, Irma and Maria and two earthquakes in Mexico, which also struck during the quarter, to total $68 billion to $148 billion industrywide.
- Allstate’s third-quarter results included $861 million of those costs, a 79% jump from a year earlier.
Teva Cuts Outlook Again in Perfect Storm of Problems
- Teva said it now expects adjusted earnings per share of $3.77 to $3.87 for 2017, down by roughly 30 cents from earlier guidance.
- Net debt fell to $34.7 billion after Teva said it had paid down roughly $600 million of loans.
- Teva had said it planned to pay down $5 billion of debt by year-end by selling off businesses.
Pizza Hut same-restaurant sales growth help Yum Brands beat Street
- Pizza Hut’s latest results showed that efforts to turn around the franchise through more advertising and promotions were beginning to pay off.
- Yum Brands, which also owns the KFC and the Taco Bell chains, reported global same-restaurant sales growth of 3 percent in the quarter.
- Net income from continuing operations rose to $418 million in the third quarter from $218 million last year.
- Revenue was $1.44 billion, compared to $3.31 billion a year earlier.
DowDuPont Plans Job Cuts as Part of $3 Billion Savings Push
- DowDuPont reported pro forma net income of $232 million, down 53% from a year ago.
- Pro forma net sales were $18.29 billion, up 8% from a year ago, with almost all segments reporting increases except for agriculture.
Fitbit reports better than expected quarterly revenue
- New products, including the Ionic smartwatch and Fitbit Alta HR, represented 32 percent of total revenue in the third quarter.
- Fitbit reported a net loss of $113.4 million in the quarter compared to a profit of $26.1 million a year earlier.
- Revenue fell 22.1 percent to $392.5 million.
GoPro’s holiday-quarter outlook misses estimates, shares fall
- The company reported a net income of $14.7 million in the third quarter compared with a loss of $104.1 million a year earlier.
- GoPro said revenue rose to $329.8 million from $240.6 million.
- Action camera-maker GoPro Inc forecast a weak holiday quarter.
Blue Apron beats sales estimates as revenue per customer rises
- Blue Apron said average revenue per customer was $245 in the third quarter.
- The number of active customers fell 6 percent year-over-year to about 856,000.
- Net revenue rose 3 percent to $210.6 million.
- Blue Apron posted a loss of 47 cents in the latest quarter.
Ralph Lauren’s quarterly revenue, profit beat estimates
- The company’s net income rose to $143.8 million in the second quarter from $45.7 million a year earlier.
- Revenue fell 9 percent to $1.67 billion, hurt in part by its decision to pull back from department stores and factory outlets.
- The company’s adjusted gross margins rose 3 percent and revenue per unit sold across its stores rose 5 percent in the second quarter compared to a year earlier.
US ECONOMY & POLITIC
Republicans Stick with Big Corporate Tax Cuts in House Bill
- The Tax Cuts and Jobs Act seeks the biggest transformation of tax code in more than 30 years; leaves top individual tax rate at 39.6%.
- House Republicans aim to permanently chop the corporate tax rate from 35% to 20%.
- The plan, named the Tax Cuts and Jobs Act, calls for leaving the top individual tax rate at 39.6%, but pushing the income threshold for that rate to $1 million for married couples.
U.S. Jobless Claims Fell Despite Hurricane Effects
- Initial jobless claims fell by 5,000 to a seasonally adjusted 229,000 in the week ended Oct. 28.
- The unemployment rate dipped to 4.2% in September, the lowest reading in 16 years.
- The number of claims workers made for longer than a week also dropped, falling to 1,884,000 in the week ended Oct. 21.
U.S. Worker Productivity Jumps in Third Quarter
- Nonfarm business-sector productivity, measured as the goods and services produced per hour worked, increased at a 3.0% seasonally adjusted annual rate.
- Output rose at a 3.8% rate from the second quarter, while hours worked were up at a 0.8% pace.
Trump to Tap Jerome Powell as Next Fed Chairman
- If confirmed by the Senate, Mr. Powell would succeed Fed Chairwoman Janet Yellen, the central bank’s first female leader, whose four-year term as Fed chief expires in early February.
- In his five years at the Fed, Mr. Powell has been a reliable ally of Ms. Yellen and would likely continue the Fed’s current cautious approach to reversing the central bank’s crisis-era stimulus policies as the economy expands.
EUROPE & WORLD
Bank of England Raises Interest Rates for First Time in a Decade — 2nd Update
- The BOE lifted its policy rate to 0.5%, from 0.25% previously.
- In a statement, BOE officials reiterated their view that Brexit will likely weigh on the economy for years to come as Britain reorders its economic and commercial ties to the bloc and the wider world.
- officials estimated the U.K.’s potential growth rate at around 1.5% a year — sharply lower than the 2% to 2.25% growth rate the economy tended to enjoy before the global financial crisis.
Alibaba’s stock jumps after profit and sales rise above expectations
- Net income for the quarter was the U.S. dollar equivalent of $66 billion compared with the equivalent of $1.14 billion in the same period a year ago.
- Revenue rose to $8.29 billion from $5.14 billion.
- Core commerce revenue rose 63% to $6.98 billion while cloud computing revenue increased 99% to $447 million to beat expectations of $423.2 million.
- Mobile monthly active users increased 3.8% to 549 million.
Shell beats third quarter expectations as profit jumps on refining
- Royal Dutch Shell reported a near 50 percent rise in quarterly profits, driven by strong refining, while solid cash generation underscored the oil and gas company has adapted well to a world of low oil prices.
- Third-quarter net income based on current cost of supplies (CCS) and excluding exceptional items, was $4.1 billion (£3.1 billion).
Credit Suisse Profit Jumps as Focus on the Wealthy Pays Off
- Credit Suisse said net profit came in at 244 million francs ($244.2 million) for the quarter, compared with 41 million francs in the same period last year.
- The rise was driven by improvement at its international wealth-management unit, where pretax income grew 59% to 382 million francs, boosted by strong growth in Asia.
- Net new assets rose 8% to 10.4 billion francs, pushing the bank’s assets under management to a record high of 751 billion francs.
TODAY in HISTORY
- North Dakota and South Dakota became the 39th and 40th states, respectively. (1889)
- Howard Hughes flew the Spruce Goose on its first and only flight. (1947)
- Harry S. Truman defeated Thomas E. Dewey to the surprise of pollsters and newspapers, in the greatest presidential upset in history. (1948)
- Jimmy Carter defeated Gerald Ford, becoming the first U.S. president from the deep South since the Civil War. (1976)
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.
Content posted by third parties on this site is screened in order to protect clients’ privacy and comply with regulatory requirements. Content containing sensitive personal information, inappropriate language, information about specific investments, misleading information, information about other companies or websites, or information related to litigation will be removed. Content posted by third-parties on this site remains the responsibility of the party posting the content and is not adopted or endorsed by Pence Wealth Management or LPL Financial. Any opinions or statements posted by third parties are their own and may not be representative of the experience of others and are not indicative of future performance or success. Third party content on this site does not reflect the views of LPL Financial and have not been reviewed by LPL Financial as to accuracy or completeness.