The rise in global interest rates took increasing investor mindshare this week leading into the FOMC and election. The US 10-year yield rose above 4.25% amid underwhelming 2 and 5-year note auctions and a string of hotter than expected economic readings both in Europe and here. The UK budget statement illustrated rising anxiety about fiscal imbalances there sending GILT yields rocketing up, while uncertainty around the US fiscal path lingered ahead of Tuesday’s vote with polls still leaning towards former President Trump in a very tight race for President. Bets on ECB and BOE rate cuts were pared back while Friday’s noisy, but soft, October US employment report cemented expectations the Fed will cut by another 25 basis points next week. The Yen rose after the BOJ's Ueda left the door wide open for a December rate cut. Crude prices began the week under pressure as Israel’s response to Iran over the weekend was seen as proportionate. Prices rebounded later helped by reports Iran will respond, and OPCE+ producers are considering delaying the planned production cuts set to take effect next month.
An overwhelming barrage of quarterly earnings reports did little to change the narrative around the broader economy and a more discerning consumer heading into the Holidays. Tech took center stage but reports came in from a large cross section of the economy. A series of high profile misses garnered notable attention, seemingly overshadowing the companies that were rewarded by investors after they reported. Microsoft beat expectations but some analysts were concerned about its cloud growth, and management gave conservative guidance on the call. Apple also beat its numbers but investors fretted over weaker than expected China and Wearables & Accessories revenues. Meta bested expectations but also raised capex guidance as it continues to channel more R&D funds into its Llama models. Google exceeded quarterly estimates and highlighted its growing strength in the AI segment, and noted that over 25% of new code is now written by AI. Amazon blew out earnings expectations and guided higher, touting double digit growth in ad revenue and AWS sales as well as a double digit operating margin. Intel managed to beat its now perpetually low expectations, saying that its cost reduction plan is well underway and 15% workforce reduction largely completed. Pfizer beat quarterly expectations and raised estimates, but investors appeared to worry that the drugmaker is still lagging rivals in development of its GLP-1 products. Meanwhile Lilly missed expectations as sales of its Zepbound GLP-1 weight loss drug lost momentum. Exxon and Chevron reported strong results both noting demand remains at historic levels, but markets are still over supplied in the short term.
MON 10/28
(CN) China Commerce Ministry (MOFCOM): China hopes to reach breakthrough in EU EV tariffs; China, EU started new phase of negotiation [**Note: EU Commission to decide whether to apply final/definitive duties by Nov 2nd]
(JP) Japan PM Ishiba: Not considering broader coalition right now; LDP received a very difficult verdict from voters and must take this result to heart and be reborn
(US) NY Fed takes $251B (prior: $227B) in RRP program at 4.80%; 67 participating and accepted counterparties (tenth consecutive day <$300B)
(US) OCT DALLAS FED MANUFACTURING ACTIVITY INDEX: -3.0 V -9.2E
(US) TREASURY $70B 5-YEAR NOTE AUCTION DRAWS 4.138% V 3.519% PRIOR, BTC 2.39 V 2.38 PRIOR AND 2.39 OVER THE LAST 12
(US) TREASURY QUARTERLY FINANCING ESTIMATES: TO BORROW $546B IN OCT-DEC QUARTER V $760BE AND $565B PRIOR ESTIMATE; JAN-MAR TO BORROW $823B V $450BE
(US) Tier1 analysts following Week 3 of Q3 earnings season: 36% of earnings are in and reported EPS beat by 2% so far (+5% ex-BA); "Bottom" mentions +56% y/y often accompanied by an EPS inflection; Mentions of weak demand also fell to 2-year lows; AI monetization is in focus this week
F Reports Q3 $0.49 v $0.49e, Rev $46.2M v $41.2Be; Cuts EBIT guidance
FFIV Reports Q4 $3.67 v $3.45e, Rev $747M v $730Me; Promotes Werner to CFO
ON Reports Q3 $0.99 v $0.97e, Rev $1.76B v $1.75Be; Guides Q4 below est at mid-point
PHIA.NL Reports Q3 Adj EBITA €516M v €456M y/y, Rev €4.37B v €4.47B y/y; Cuts Comp Sales outlook noting significant "intensified" deterioration in China demand, which expected to continue
WCH.DE Reports Q3 Net €33.9M v €30.5Me, EBITDA €152M v €162Me, Rev €1.43B v €1.52B y/y
TUES 10/29
(CN) EU imposes import duties on Chinese EVs; BYD 17.0%; Geely 18.8%; SAIC 35.3%; Tesla 7.8% (update)
(CN) REPORTEDLY CHINA TOP LEGISLATIVE BODY NEXT WEEK TO APPROVE ISSUANCE OVER CNY10T ($1.40T) IN EXTRA DEBT DURING NEXT FEW YEARS AND CONSIDERING STRONGER FISCAL PACKAGE IF TRUMP WINS - PRESS [**Note: >CNY10T amount would be in the high-end of analysts expectations]
(US) Atlanta Fed GDPNow: Cuts Q3 GDP forecast from 3.3% to 2.8% (final Q3 estimate)
(US) SEPT JOLTS JOB OPENINGS: 7.44M V 8.00ME (lowest since Jan 2021)
(US) SEPT PRELIMINARY WHOLESALE INVENTORIES M/M: -0.1% V 0.1%E
(US) TREASURY $44B 7-YEAR NOTE AUCTION RESULTS: DRAWS 4.215% V 3.668% PRIOR, BID-TO-COVER RATIO: 2.74 V 2.63 PRIOR AND 2.56 OVER THE LAST 12
ADS.DE CEO: Expect growth in US for Q4 and Q1; Both Ye and Adidas said we don’t need to fight anymore and withdrew all the claims - post earnings comments
ADS.DE Reports final Q3 Net €469M v €343.1Me, Op €598M v €409M, Rev €6.44B v €6.44B prelim; Greater China +9% y/y (cc)
AMT Reports Q3 AFFO $2.52 v $2.54e, Rev $2.52B v $2.76Be
BA Confirms pricing of upsized 112.5M at $143/shr in concurrent offerings of common stock and depositary shares [total proceeds $20.7B v $18.9B prior]
BP.UK Reports Q3 Net $206M v $4.86B y/y, Rev $48.3B v $54.0B y/y; Maintains $1.75B share buyback pace during Q4
DHI Reports Q4 $3.92 v $4.20e, Rev $10.0B v $10.2Be; Guides FY25 weak; Raises Quarterly dividend 33.3% to $0.40 from $0.30 (indicated yield 0.89%)
FE Reports Q3 $0.85 v $0.91e, Rev $3.7B v $3.99Be; Raises FY capex outlook
GOOGL Reports Q3 $2.12 v $1.83e, Rev $88.3B v $86.5Be
LSTR Guides Q4 $1.25-1.45 v $1.59e, Rev $1.15-1.25B v $1.27Be - earnings slides
MCD Reports Q3 $3.23 v $3.18e, Rev $6.87B v $6.79Be; Global SSS miss est; Notes continued impact of the war in the Middle East and negative comparable sales in China
NOVN.CH Reports Q3 Core EPS $2.06 v $1.94e, Rev $12.8B v $12.6Be; Raises outlook
PAG Reports Q3 $3.39 v $3.48e, Rev $7.59B v $7.77Be; Raises Quarterly dividend 11.2% to $1.19 from $1.07 (indicated yield 3.06%)
PFE Reports Q3 $1.06 v $0.64e, Rev $17.7B v $15.2Be; Raises outlook
QRVO Reports Q2 $1.88 v $1.85e, Rev $1.05B v $1.03Be; Guides Q3 light
RCL Reports Q3 $5.20 v $5.04e, Rev $4.89B v $4.86Be; Raises FY24 outlook, but guides Q4 EPS below est; "Demand for 2025 is strong with booked load factors in line with prior years and at higher rates, allowing for further pricing and yield growth as 2025 bookings continue to ramp up"
UBER Announced arrival of a new initiative to expand access to more nutritious food for millions of Americans; Available now, Uber Eats is accepting SNAP (Supplemental Nutrition Assistance Program) EBT (Electronic Benefits Transfer) payments, starting with the regional grocery banners Albertsons, Safeway, Jewel-Osco and Vons as well as Walgreens locations nationwide and Duane Reade stores exclusively in New York
V Expands Push-to-Wallet for Virtual Cards Across Commercial Solutions Ecosystem
V Recent Oct 1-21st U.S. Payments Volume Growth was around +7% y/y v +4% y/y during Sept - earnings supplement
V TTN Summary Q4 Earnings Call: It was true that in July we started a little slower, and then Q4 ended up being stable and we think it's true now as we see a strong start to October
WEDS 10/30
(CN) CHINA OCT MANUFACTURING PMI (GOVT OFFICIAL): 50.1 V 49.9E (1st expansion in 6 months)
(DE) Germany ruling coalition said to be on the verge of breaking up; speculation of early elections in spring - financial press [**Note: Germany's next elections currently scheduled before end of September 2025]
(DE) GERMANY OCT PRELIMINARY CPI M/M: 0.4% V 0.2%E; Y/Y: 2.0% V 1.8%E
(DE) GERMANY OCT CPI NORTH RHINE WESTPHALIA M/M: 0.3% V 0.0% PRIOR; Y/Y: 2.0% V 1.5% PRIOR
(DE) GERMANY Q3 PRELIMINARY GDP Q/Q: +0.2% V -0.1%E; Y/Y: -0.2% V -0.3%E
(DE) GERMANY OCT UNEMPLOYMENT CHANGE: +27.0K V +15.0KE; UNEMPLOYMENT CLAIMS RATE: % V 6.1%E
(EU) ECB's Schnabel (Germany): Neutral rate subject to high uncertainty; No need to go below neutral - speech text
(EU) EURO ZONE Q3 ADVANCE GDP Q/Q: 0.4% V 0.2%E; Y/Y: 0.9% V 0.8%E
(JP) BANK OF JAPAN (BOJ) LEAVES TARGET RATE UNCHANGED AT 0.25%; AS EXPECTED
(UK) DMO FY24/25 GILT REMIT: £296.9B VS. £298.0BE
(UR) Reportedly Ukraine and Russia in "very early talks" about halting strikes on energy plants; Russia Pres Putin said to be unlikely to agree to a deal as long as Ukrainian forces remain on Russian territory in the Kursk region - FT
(US) NY Fed takes $228.9B (prior: $244.8B) in RRP program at 4.80%; 54 participating and accepted counterparties (twelfth consecutive day <$300B)
(US) Q3 ADVANCE GDP PRICE INDEX: 1.8% V 1.9%E; CORE PCE PRICE INDEX Q/Q: 2.2% V 2.1%E
(US) Q3 ADVANCE GDP ANNUALIZED Q/Q: 2.8% V 2.9%E; PERSONAL CONSUMPTION: 3.7% V 3.3%
(US) SEPT PENDING HOME SALES M/M: 7.4% V 1.9%E; Y/Y: +2.2% V -1.1%E
(US) TREASURY QUARTERLY REFUNDING ANNOUNCEMENT: TO SELL $58B IN 3-YEAR NOTES; $42B IN 10-YEAR NOTES AND $25B IN 30-YEAR BONDS
OPEC+ COULD REPORTEDLY DELAY PLANNED PRODUCTION INCREASE FROM DEC 2024 BY ONE MONTH OR MORE - PRESS
1211.HK Reports Q3 (CNY) Net 11.6B v 10.4B y/y, Rev 201.1B +24% y/y v 204.9Be
7211.JP Reports H1 Net ¥34.0B v ¥67.5B y/y, Op ¥90.7B v ¥104.2B y/y, Rev ¥1.31B v ¥1.16T y/y
ABBV Reports Q3 $3.00 v $2.92e, Rev $14.5B v $14.3Be; Raises Quarterly dividend 5.8% to $1.64 from $1.55 (indicated yield 3.46%)
ADP Reports Q1 $2.33 adj v $2.20e, Rev $4.83B v $4.76Be, Cuts profit outlook, but raises Rev
AIR.FR Reports Q3 €1.24 v €1.02 y/y, Adj EBIT €1.41B v €1.0B y/y, Rev €15.69B v €14.9B y/y; Affirms guidance
ALL Reports Q3 $3.91 v $2.20e, Rev $16.6B v $16.2Be
BABA AliExpress invites U.S-based retailers to sell on the platform with 0% commission and $0 onboarding costs
BAS.DE Reports Q3 Net +€287M v -€249M y/y, EBITDA €1.3B v €1.4B y/y, Rev €15.7B v €15.7B y/y; Expects to reach the low end of adj EBITDA forecast range
CAT Guides Q4 Rev slightly lower y/y [implies <$16.6B v $16.7Be], adj Op margin modestly higher y/y; Cuts FY24 Rev ' to be slightly lower than our expectations at our last earnings call' y/y (prior 'slightly lower' y/y [implied <$67.1B) - earnings slides
CAT Reports Q3 dealer statistics: Total machines -6% v -3% prior (3rd consecutive drop)
CAT Reports Q3 $5.17 v $5.33e, Rev $16.1B v $16.4Be; Notes decrease in sales volume was mainly driven by lower sales of equipment to end users; Also changes in dealer inventories had an unfavorable impact
CDW Reports Q3 $2.63 v $2.85e, Rev $5.52B v $5.73Be; Notes elongated customer decision making and delays in projects
CF Reports Q3 $1.55 v $1.05e, Rev $1.37B v $1.21Be
CLX Reports Q1 $1.86 v $1.36e, Rev $1.76B v $1.63Be
CVNA Reports Q3 GAAP $0.69 v $0.23e, Rev $3.66B v $3.47Be; Raises FY guidance
EXTR Reports Q1 $0.17 v $0.35 y/y, Rev $269M v $353.1M y/y
GSK.UK Reports Q3 Adj £0.50 v £0.44e, Rev £8.01B v £8.06Be; Cuts vaccine sales outlook
HOOD Reports Q3 $0.17 v $0.18e, Rev $637M v $661Me; Affirms guidance
HUM We want to make it clear that we expect 2025 Adjusted EPS to be at least in line with final 2024 results (implies >=$16.00 v $19.69e), assuming 2025 individual MA membership growth is in line with current expectations; We believe our competitive positioning is in line with previous expectations and continue to anticipate our individual MA membership will decline a few hundred thousand in 2025, primarily due to plan and county exits. We look forward to sharing more in the coming months - prepared remarks
HUM Reports Q3 $4.16 v $3.49e, Rev $29.4B v $28.7Be
KHC On 2025, while it is too early to give guidance, we do not expect to reach long-term on-algorithm pace during the year; Notes confidence for what is coming as we head into 2025 - prepared remarks
LLY Reports Q3 $1.18 v $1.53e, Rev $11.4B v $12.0Be; Zepbound sales miss est; Trims Rev outlook, noting investing heavily in increasing the supply of tirzepatid
META Reports Q3 $6.03 v $5.19e, Rev $40.6B v $40.2Be; Raises midpoint of Capex guidance; Continue to expect significant Capex growth in 2025
MSFT *Guides Q2 Rev $68.1-69.1B (calculated) v $69.7Be; Consumption growth in Azure will be stable from Q1 to Q2; Q2 Azure revenue growth expected to be 31-32% (cc) v 33% q/q - earnings call
MSFT Reports Q1 $3.30 v $3.08e, Rev $65.6B v $64.4Be
SBUX Reports Q4 $0.80 v $0.80e, Rev $9.07B v $9.10Be
SHAK Sales trends continued to see momentum in Oct with SSS +4.5% (v 4.4% in Q3) and ~flat traffic; Guides Q4 Rev $322.6-327.0M v $324Me - shareholder letter
UBSG.CH Reports Q3 +$0.43 v -$0.24 y/y, Rev $12.3B v $11.7B y/y; Notes upcoming US elections are creating uncertainties that are likely to affect investor behavior
VOW3.DE TTN Summary Earnings Call: Do not expect same dividend as last year; Confident we can reach agreements with unions, but can't rule out strikes; Notes US transition to electric mobility is not as fast as originally assumed; Dividend policy of 30% payout is still valid, but reasonable to assume that 2024 dividend will be lower
THRS 10/31
(IS) Iran is reportedly planning to conduct a "major" retaliatory strike against Israel from Iraqi territory - press
(EU) EURO ZONE OCT ADVANCE CPI ESTIMATE Y/Y: 2.0% V 1.9%E; CORE CPI Y/Y: 2.7% V 2.6%E
(IT) ITALY SEPT UNEMPLOYMENT RATE: 6.1% V 6.2%E
(IT) ITALY OCT PRELIMINARY CPI M/M: 0.0% V -0.1%E; Y/Y: 0.9% V 0.8%E
(UR) Ukraine Office Chief Yermak: Ukraine to weigh China-Brazil-South Africa peace proposals [**Note: proposals included ceasefire and no escalation]
(US) BOFA INSTITUTE: WEEK-TO-OCT 26TH TOTAL CARD SPENDING +2.6% Y/Y V +1.9% PRIOR WEEK V -0.9% AVERAGE IN SEPT; Within the sectors we report, entertainment, online electronics and airlines showed the biggest y/y rise since last week.
(US) INITIAL JOBLESS CLAIMS: 216K V 230KE (lowest since mid-May); CONTINUING CLAIMS: 1.862M V 1.88ME
(US) Q3 EMPLOYMENT COST INDEX (ECI): 0.8% V 0.9%E
(US) Redfin: Pending sales have remained resilient despite mortgage rates rise; Pending U.S. home sales rose 4.5% year over year during the four weeks ending October 27, the biggest increase in more than three years
(US) SEPT PCE DEFLATOR INDEX M/M: 0.2% V 0.2%E; Y/Y: 2.1% V 2.1%E
(US) SEPT PERSONAL INCOME: 0.3% V 0.3%E; PERSONAL SPENDING: 0.5% V 0.4%E
(US) WEEKLY EIA NATURAL GAS INVENTORIES: +78 BCF VS. +81 BCF TO +83 BCF INDICATED RANGE
(US) Atlanta Fed GDPNow: Forecasts initial Q4 US GDP at 2.7%
(CN) CHINA OCT CAIXIN PMI MANUFACTURING: 50.3 V 49.7E (moves back into expansion)
ABI.BE Reports Q3 $0.98 v $0.90e, EBITDA $5.42B v $5.43B y/y, Rev $15.6B v $15.6Be
EME Reports Q3 $5.80 v $3.61 y/y, Rev $3.70B v $3.21B y/y; Raises guidance; Organic Rev +12.6% y/y
ETN In 2025, expect overall market growth of ~6-8%; Affirms FY24 FCF $3.4-3.6B (prior: $3.4-3.6B) - earnings slides
FNMA Reports Q3 Net $4.04B v $4.70B y/y, Rev $7.34B v $7.30B y/y
MA Guides Q4 Rev Low-teens growth, Operating Expenses High-end of low-double-digits; Oct MTD Switched transaction volume 12% y/y v 11% q/q, Cross-border volume 18% y/y v 17% q/q - slides
MAERSKB.DK CEO: Expect to pay significant dividends in 2025; Our expectation that we will not be able to sail through the Red Sea well into 2025 - post earnings comments
MAERSKB.DK Reports final Q3 Underlying Net $3.10B v $2.50Be, EBITDA $4.80B v $4.00Be, Rev $15.8B v $15.8B prelim; Notes exports out of China and Southeast Asia make a very large portion of growth
TTE.FR Reports Q3 Adj $1.74 v $1.84e, adj EBITDA $10.1B v $10.4Be, Rev $52.0B v $57.0Be; To execute $2B share buybacks in Q4
UBER CEO: See broad strength in trip volumes, but especially outside the US - CNBC
AAPL Reports Q4 $1.64 v $1.49e, Rev $94.9B v $94.4Be; Records $10.2B European one-time income tax charge
AMZN Reports Q3 $1.43 adj v $1.14e, Rev $158.9B v $157.1Be; Guides Q4 above consensus
INTC Reports Q3 +$0.12 v -$0.03e, Rev $13.3B v $13.0Be; Takes $2.8B Q3 restructuring charge
CAR Reports Q3 $6.65 v $8.55e, Rev $3.48B v $3.56Be
FRI 11/01
(IR) Iran Supreme Leader Advisor Kharrazi: Iran will certainly respond to the Israeli aggression at the appropriate time; Changing its nuclear doctrine is still on table if Iran faces an existential threat
(US) OCT CHANGE IN NONFARM PAYROLLS: +12K V +100KE (below all estimates and lowest since Dec 2020)
(US) OCT UNEMPLOYMENT RATE: 4.1% V 4.1%E
(US) OCT AVERAGE HOURLY EARNINGS M/M: 0.4% V 0.3%E; Y/Y: 4.0% V 4.0%E
(US) OCT ISM MANUFACTURING: 46.5 V 47.6E (Lowest since June 2023)
(US) OCT FINAL S&P MANUFACTURING PMI: 48.5 V 47.8E
(CH) SWISS OCT CPI M/M: -0.1% V 0.0%E; Y/Y: 0.6% V 0.8%E (lowest since June 2021)
(US) Tier1 week-to-Oct 31st US Truckload Demand Indicator at 56.0 v 54.0 prior (now above 54 avg freight recession level); Follows recent tightness after 2Hurricanes (Milton and Helene) and a 3-day East Coast port strike
(US) NY Fed takes $155.5B (prior: $201.3B) in RRP program at 4.80%; 41 participating and accepted counterparties
W Reports Q3 $0.22 v $0.14e, Rev $2.88B v $2.88Be
CHD Reports Q3 $0.79 v $0.68e, Rev $1.51B v $1.49Be; "While US consumption in our categories improved slightly in September and October, we remain cautious regarding the US consumer and category growth rates for Q4"
CAH Reports Q1 $1.88 v $1.64e, Rev $52.3B v $51.3Be; Raises outlook
XOM Reports Q3 $1.92 v $1.95e, Rev $90.0B v $93.5Be; Raises Quarterly dividend 4.2% to $0.99 from $0.95 (indicated yield 3.39%)
XOM Affirms FY24 Capex $28B v $26.3B y/y (prior: capex $28B); 2024 is a high planned maintenance year which is reflected in base volumes and expenses - earnings slides
CVX Reports Q3 $2.51 v $2.47e, Rev $48.9B v $49.9Be; Notes cost reduction efforts are underway, targeting $2-3B of structural cost reductions from 2024 by end-2026
CVX Anticipate significant volume growth in the years ahead; In Q4, Upstream will have downtime which is expected to be split between U.S. and international operations - earnings slides