Thursday Morning Reads
- Leaving the ECB
- Employment Plunging
- C.E.O. Confidence Is Collapsing
- Biggest Threat Yet
- This $300 Wine Is the Real Thing
- The Least Happy Age
- Where’s the Buyback Beef?
- Twitter -16% on Q3 misses, ad weakness
- 3M sinks after cutting full-year, Q4 guidance for earnings, sales
- 3M EPS beats by $0.08, misses on revenue
- Nokia down 18% on slashing guidance, pausing dividends
- Dow EPS beats by $0.19, misses on revenue
- Valero Energy EPS beats by $0.14, beats on revenue
- Tesla revisits $300
- Raytheon EPS beats by $0.24, beats on revenue
- Baxter misses on revenue
- Nokia EPS in-line, beats on revenue
- Comcast EPS beats by $0.05, beats on revenue
- Comcast declares $0.21 dividend
Open Interest Changes for Today:
European stocks trade slightly higher as investors try to focus their attention away from the U.K. Brexit drama toward corporate earnings. The Stoxx 600 Index is up 0.3% at last check, with auto stocks doing the heavy lifting. Meanwhile, Asian markets were mostly higher following the blitz of earnings reports from the U.S. and no negative developments on the trade war front. Hong Kong's Hang Seng Index rose 0.9% and Japan's Nikkei gained 0.6%. South Korea's Kospi closed up 0.2% after a strong earnings report from SK Hynix (OTC:HXSCF) tipped sentiment favorably, while Australia's ASX 200 closed flat on the day. U.S. stock futures are pointing slightly higher ahead of another busy day of earnings reports. Amazon (NASDAQ:AMZN), Twitter (NYSE:TWTR), Intel (NASDAQ:INTC), Visa (NYSE:V) and Comcast (NASDAQ:CMCSA) are among the notable companies stepping up to the plate.
The Eurozone economy remained close to stagnation at the start of Q4, according to the latest flash PMI data. A further steep decline in manufacturing output was accompanied by one of the weakest service sector expansions since 2014. The flash eurozone manufacturing PMI rose to a two-month high of 46.2, while the flash services PMI rose to 51.8 from 51.6 in September. Flash composite PMI edged up to 50.2 from 50.1 in September to linger perilously close to the 50.0 mark that separates growth from contraction. Future expectations sank to the gloomiest level since 2013 and jobs growth hit the lowest mark since 2014.
Mario Draghi's last meeting as European Central Bank chief is set for later today with his eight-year term due to expire at the end of the month. Draghi's last meeting could be a lively one due to the division among policymakers over renewed asset purchases that threatens the effectiveness of the central bank's policy measures. While economists predict no major changes to the ECB's post-meeting policy statement from the September meeting blast, there could be more details on planned asset purchases and technical issues around the restarting of quantitative easing. What will Draghi's parting shot be? "His sign-off message is likely to be that things would have been much worse had the ECB done less," predicts Societe Generale's Annenkov. Christine Lagarde replaces Draghi as ECB chief on November 1.
Japan and Saudi Arabia struck a deal in principle at a ministerial meeting to renew a joint crude oil storage scheme out of Okinawa. The agreement is seen as providing Saudi Arabia quick and easy access to key customers in East Asia, while Japan gains energy security. Currently, Saudi Aramco (ARMCO) leases 1.30M kiloliters or 8.18M barrels of crude oil storage capacity at Okinawa for commercial purposes in exchange for prioritizing supply to Japan in the event of an emergency. "It is significant to renew the joint crude oil storage project," stated Minister of Economy, Trade and Industry Isshu Sugawara on the deal. "Our country will continue to support Saudi Arabia's stable oil supply through this project henceforward," he added.
Tesla (NASDAQ:TSLA) racked up a double-digit gain after posting an unexpected profit in Q3 and delivering more than 96K cars. Looking ahead, Tesla says it's highly confident it will deliver more than 360K vehicles this year (down from prior guidance). Positive quarterly free cash flow is anticipated going forward, with possible temporary exceptions around the launch and ramp of new products. The Model Y is on track to be released by summer 2020 and limited Tesla Semi trucks are expected to be produced sometime next year. On the post-earnings conference call, Elon Musk said Tesla Insurance will be expanded to other states and possibly other countries. Shares of Tesla are up 17.2% premarket after being up by more than 20% in the after-hours session.
Go deeper: READ bullish analysis on Tesla.
Amazon (AMZN) is scheduled to report Q3 earnings after the closing bell today. Analysts seem to be expecting a mixed report, with revenue surprising to the upside and the e-commerce giant's focus on one-day shipping and a slowing cloud services business setting up a potential profit miss. Stifel thinks the earnings report could be an opportunity for investors. "We would be buyers on any weakness stemming from potentially lower margin as historically the company has emerged from past investment cycles in a stronger competitive position and generated stronger-than-expected operating income dollars," reads the firm's earnings preview. Yesterday, Amazon warmed up for the big report by acquiring Health Navigator for an undisclosed amount. The healthcare startup provides online symptom checking and triage tools for companies wanting to route patients to the appropriate care location.
Nordstrom (NYSE:JWN) is set to open its 320K square-foot Manhattan flagship store today. The store's location on Broadway and 57th Street positions it to be a tourist draw, while Nordstrom's collaborations with Nike (NYSE:NKE), Everlane, Burberry (OTCPK:BURBY), Madewell and others are aimed at raising the brand's profile. "We've been looking at the New York market for years and we saw this opportunity to build a flagship in the fashion authority of New York City," stated Nordstrom CFO Anne Bramman on the Big Apple strategy. Shares of Nordstrom are down 40% over the last 52 weeks.
Go deeper: READ the latest analysis on Nordstrom.
Johnson & Johnson (NYSE:JNJ) has confirmed its agreement in principle to settle opioid litigation by contributing $4B. The company says the proposed settlement would reduce reported GAAP net earnings for Q3 and the nine months ended September 29 to $1.8B from $4.8B and to $11.1B from $14.2B, respectively. The settlement would have no impact on adjusted earnings results for Q3 and for the nine-month period that ended on September 30.
Facebook (NASDAQ:FB) chief Mark Zuckerberg sounded a defiant note amid six hours of questioning on Capitol Hill over his company's plans for its Libra payments system, suggesting he's sticking it out even as Libra faces increasing pushback from lawmakers. He repeated assurances that Libra wouldn't launch anywhere in the world without an OK from U.S. regulators. Meanwhile, representatives took on everything from payments particulars to Facebook's reputational problems and its (light) approach to policing political ads.
Nokia (NYSE:NOK) plunged 18% PM on slashing guidance. It now expects FY19 Non-IFRS EPS of €0.21 (±€0.03), operating margin of 8.5% (±1%); FY20 Non-IFRS EPS of €0.25 (±€0.05), operating margin of 9.5%. The company will not distribute third and fourth installments of the dividend for FY18 to increase investments in 5G and strengthen cash position.
PG&E (NYSE:PCG) launched a second round of intentional blackouts in California, this time cutting off power to 179,000 customers across 17 counties, amid more warnings of critical wildfire conditions. But this round was milder than an earlier set, which affected 750,000 homes and businesses, and power could be restored as soon as Thursday to some. Meanwhile, blackouts may come in the southern part of the state as well, with Southern California Edison considering shut-offs for 163,000 customers.
Microsoft (MSFT) -3% AH on Q3 earnings beat, Azure growth.
Tesla (TSLA) +17.2% PM on surprise profit.
Ford Motor (F) -2.6% AH after disappointing guidance.
PayPal (NASDAQ:PYPL) +7.1% PM on Q3 earnings beat, upside guidance.
eBay (NASDAQ:EBAY) -6.3% PM after mixed Q3.
Lam Research (NASDAQ:LRCX) +6% PM on upside guidance.
Las Vegas Sands (NYSE:LVS) flat AH as Macau revenues drop.
Xilinx (NASDAQ:XLNX) -1% PM on 2H headwinds warning.
ServiceNow (NYSE:NOW) +6.7% PM after Q3 beat.
Washington Prime Group (NYSE:WPG) +4.5% AH on Q3 beat, reaffirmed FY guidance.
Align Technology (NASDAQ:ALGN) +6.8% PM on Q3 beat, strong Q4 guidance.
Range Resources (NYSE:RRC) +1.8% AH despite Q3 loss, revenue drop.
Edwards Lifesciences (NYSE:EW) +5.9% AH on guidance raise, strong Q3.
BioMarin Pharmaceutical (NASDAQ:BMRN) +3.5% AH on Q3 beat, FY guidance.
F5 Networks (NASDAQ:FFIV) +6.3% PM on strong software services revenue, partnership with AWS.
Canadian Pacific Railway (NYSE:CP) flat despite on Q3 beat, low operating ratio.
O'Reilly Automotive (NASDAQ:ORLY) +3.4% AH on strong Q3 profit.
Spirit Airlines (NYSE:SAVE) +5.8% AH after posting Q3 beat, big Airbus order.
In Asia, Japan +0.55%. Hong Kong +0.87%. China -0.02%. India -0.21%.
In Europe, at midday, London +0.74%. Paris +0.50%. Frankfurt +0.46%.
Futures at 5:40, Dow +0.07%. S&P +0.07%. Nasdaq +0.35%. Crude -0.61% to $55.63. Gold -0.26% to $1,491.80. Bitcoin -6.45% to $7,498.
Ten-year Treasury Yield +0.4 bps to 1.763%.
Today's Economic Calendar
8:30 Durable Goods
8:30 Initial Jobless Claims
9:45 PMI Composite Flash
10:00 New Home Sales
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
1:00 PM Results of $32B, 7-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
7:00 PM Fed's Williams Speech