>>> US After Hours Summary: Busy earnings session, led by AAPL -3.4%; BILL -28%,

After Hours Summary: Busy earnings session, led by AAPL -3.4%; BILL -28%, FTNT -16.7%, FND -14.7%, FOXF -14.6%, TEAM -10.4%, BKNG -4.2%, OLED -4.2%, COIN -4% also lower on earnings; DOCN +18.4%, SQ +15.9%, TRUP +10%, PARA +4.9% higher on earnings

After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: DOCN +18.4%, SQ +15.9% (also authorizes new $1 bln share repurchase program; also employees warned of potential job cuts according to Business Insider), IAS +14.2%, FNKO +13.8%, UDMY +13.6%, DH +12%, SPT +11.6%, PODD +10.2%, TRUP +10%, FIGS +9.8%, EVH +8.3%, ALHC +8.2%, EXPE +7.5% (also authorizes new $5 bln share repurchase program), DKNG +7.1%, BL +6.1%, DVAX +5.9%, ACAD +5.4%, HASI +5.3%, FIVN +4.9%, PARA +4.9%, YELP +4.6%, CLDX +4.1%, MNST +3.5%, TSLX +3.1%, PRDO +2.8%, LYV +2.7%, QLYS +2.7%, RMAX +2.7%, FRT +2.4%, VTLE +2.4%, HURN +2.1%, BAND +2%, CHUY +2%, SM +2% (also increases dividend), GDYN +1.8%, MSI +1.7%, RDFN +1.6%, ALTR +1.5%, EOG +1.4% (also increases dividend by 10%, declare special dividend of $1.50/sh), CVNA +1.4%, CRUS +0.9%, MCW +0.9%, PLYA +0.8%, LNT +0.7%, VIR +0.7%, DBX +0.6%, REG +0.6%, EXPI +0.5%, VTR +0.3%, COLD +0.2%, AMN +0.1%, KWR +0.1%, MC +0.1%, CPK +0.1%

Companies trading higher in after hours in reaction to news: BURL +6.5% (to join S&P MidCap 400), PLL +3.7% (North American lithium drill results show potential for mineral resource upgrade), ENV +3.7% (moving to S&P SmallCap 600 from S&P MidCap 400), CELH +3.3% (approves 3-for-1 stock split), APO +2.8% (acquires majority stake in Modern Aviation), TERN +1.9% (first participant dosed in Phase 1 trial of TERN-601), BOX +1.9% (names new COO), MBLY +1.6% (Director Claire McCaskill trust bought 27819 shares at $35.95 worth $1 mln), BCO +0.5% (increases share repurchase authorization by $500 mln), SNA +0.1% (increases dividend), X +0.1% (decision regarding sale could be on horizon according to Bloomberg)

After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: BILL -28%, FTNT -16.7% (also says it's sharpening its focus to prioritize high-growth markets), BOOM -15.1%, FND -14.7%, FOXF -14.6% (also authorizes new $300 mln share repurchase program), AGL -12.9%, ABCL -11.3%, PCTY -10.9%, TEAM -10.4%, OPEN -9.1%, OUT -9.1%, WW -8.9%, HLIO -8.4%, TXG -6.9%, ACCO -6.3%, BOOT -6.2%, PEN -5.7%, SWKS -5.6%, BAP -4.8%, NET -4.8%, STEM -4.8% (also enters into alliance with SB Energy), BECN -4.5%, BKNG -4.2%, OLED -4.2%, APPN -4.1%, COIN -4%, SYK -3.7%, AAPL -3.4%, VIAV -2.9%, SG -2.5%, MCHP -2.2% (also increases dividend), RKT -2.2%, SPXC -2.1%, HCAT -2% (also acquires Electronic Registry Systems; also announces partnership with Accountable Health Partners), MP -2%, SEM -1.9%, IRTC -1.8%, OHI -1.7%, ICFI -1.5%, MERC -1.5%, KTOS -1.4%, CYTK -1.1%, SXI -1.1%, LOCO -0.7% (also CEO to step down; also $20 mln buyback auth), GDDY -0.3%, OTEX -0.3%, CODI -0.1% (also announces sale of Marucci Sports for $572 mln), HTGC -0.1%, PXD -0.1% (also increases dividend), RPT -0.1%, TMST -0.1%

Companies trading lower in after hours in reaction to news: MCY -4.3% (announces deal with US Navy), PANW -3.3% (in sympathy with weak FTNT results), HSIC -2.6% (to delay its 10-Q), BBIO -2% (stock offering by selling shareholders), CRWD -2% (in sympathy with weak FTNT results), VRNS -1.9% (in sympathy with weak FTNT results), RY -1% (charged by SEC with internal accounting controls violations; to pay a $6 mln penalty), AUPH -0.6% (presents data on LUPKYNIS), MU -0.3% (files mixed shelf securities offering), CERS -0.1% (files $150 mln mixed shelf securities offering)

WSJ : Russia’s Wagner Group May Provide Air Defense Weapon to Hezbollah, U.S. In

Russia’s Wagner Group May Provide Air Defense Weapon to Hezbollah, U.S. Intel Says
The Lebanese militant group could threaten a second front against Israel

The U.S. has intelligence that the Wagner Group, the Russian paramilitary group, may provide an air defense system to Hezbollah, the Lebanese militia, U.S. officials say.

The system in question is the SA-22, which uses antiaircraft missiles and air defense guns, to intercept aircraft.

One U.S. official said that Washington hasn’t confirmed that the system has been sent. But it is monitoring discussions involving Wagner and Hezbollah and that the potential delivery is a major concern.

The U.S. has positioned an aircraft carrier in the Eastern Mediterranean to try to deter Hezbollah, an Iranian-backed militias, from opening up a northern front.

Wagner has personnel in Syria, where Hezbollah fighters have also been present.

WSJ : U.S. Seeks Help From Arab States to Plan Gaza Governance After War

U.S. Seeks Help From Arab States to Plan Gaza Governance After War
While some see a role for Qatar, Washington and its partners are struggling to enlist volunteers

Secretary of State Antony Blinken and his deputies are speaking with their counterparts in Arab states about plans for governing Gaza after Israel finishes its main military operations there, according to people familiar with the early stage conversations.

Officials involved in the brainstorming sessions say it is too early to discuss specifics, and outside analysts don’t see a precise blueprint for administering Gaza as feasible at the moment, but the issue is expected to come up during Blinken’s coming visit to the region.

Blinken will be visiting Israel on Friday for meetings with members of the Israeli government and is expected to make a stop in Jordan. The assistant U.S. secretary of state for Near Eastern affairs, Barbara Leaf, has been in the region ahead of Blinken’s visit, discussing future plans for Gaza, among other issues.

Officials aware of the early discussions stress that there isn’t yet a plan backed by Washington. One option is a period where Gaza is led by a multinational force from the region.

“The major stakeholders are engaged in these discussions,” said Sen. Ben Cardin (D., Md.), chair of the Senate Foreign Relations Committee. “You have to have a credible administrator that can come into Gaza to provide the opportunities for Palestinians.”

Some form of backing from Arab nations is important, officials and analysts say, but coming up with a governance plan in the middle of a ground operation is “like asking about cleaning up after a Category 5 hurricane right as it’s happening,” said Brian Katulis, vice president of policy at the Middle East Institute in Washington.

The attempt at postwar planning comes as the high civilian death toll from Israel’s air and ground operations in Gaza has deepened the rift between the Jewish state and its Arab neighbors. Arab governments are reluctant to get involved in Gaza if the Israel Defense Forces are still conducting sporadic or continuous operations against Hamas.

The aftermath of the Hamas attack on Israel that killed some 1,400 Israelis—mostly civilians—in October has delayed, if not halted, a multiyear effort to bridge divides between Israel and Arab states. On Wednesday, Jordan recalled its ambassador from Israel in protest of the war in Gaza.

Some Israelis have backed occupying Gaza in the longer term—an option President Biden has rejected—or pushing Gazans to the Sinai region of neighboring Egypt, an idea Egyptian leaders oppose.

Israeli Defense Minister Yoav Gallant said the goal is to destroy Hamas’s military capabilities and its ability to govern, but added that his country has no interest in permanently reoccupying Gaza.

Yet as Israel’s ground forces move deeper into Gaza, Israeli and U.S. leaders are faced with the question of who will govern the densely populated enclave once Hamas is removed. What that governing authority might look like is unclear.

“At some point, what would make the most sense would be for an effective and revitalized Palestinian Authority to have governance and ultimately security responsibility for Gaza,” Blinken said.

Under current leader Mahmoud Abbas, 87, the Palestinian Authority, which governs the parts of the West Bank not controlled by Israeli forces or settlers, is seen as too weak to administer Gaza in the near term, officials say.

Some analysts say a coalition of Arab-nation or Palestinian officials or Palestinian leaders could oversee Gaza on a temporary basis until the territory is in a better place to elect its own leadership. Involving Arab nations comes with its own hurdles.

“I think the U.S. would need to accept that Qatar, Turkey, Egypt and Jordan have to play a key role,” said Tuqa Nusairat, strategy director at the Atlantic Council’s Middle East program.

Another possibility would be to persuade Arab states who have signed peace deals or normalization pacts with Israel to provide or oversee a security force for Gaza. But that would require some country or organization to take administrative responsibility and oversee security—essentially an international peacekeeping force.

In general, Arab neighbors are reluctant to take a governing role, fearing it could undermine their long-term goal of an independent Palestinian state. Cairo has also long resisted calls to govern Gaza over concerns it is an excuse to push the territory’s two million inhabitants into Egypt. And Jordan would likely have little interest in participating in a plan that appears at odds with a “two-state solution” to the Israel-Palestinian problem.

“We don’t have answers to what is next in Gaza because none of us know what Gaza is going to look like,” Ayman Safadi, Jordan’s foreign minister, said last week at the Center for Strategic and International Studies, a Washington-based think tank.

Blinken brought up the future of Gaza on Monday in a conversation with Qatar’s prime minister, Sheikh Mohammed bin Abdulrahman al-Thani, according to a person familiar with the call.

Qatar is a natural choice to play a role in Gaza’s future, given its role as a diplomatic intermediary and in brokering talks with Hamas on issues like hostage release. The oil-rich nation has for years hosted a Hamas political office.

“The Israelis have tried to think of other people than Qatar after Hamas,” said Simon Henderson of the Washington Institute for Near East Peace.

Yet it isn’t clear that Israeli troops will immediately leave or entirely cease operations, after Hamas is removed from power. Remnants of Hamas, or Palestine Islamic Jihad, another militant group, will likely remain, or others could come in. So whoever steps in to help in Gaza in the immediate future will likely have to coordinate on security with Israel, analysts say, which might be a nonstarter.

The idea of Arab nations providing security forces to stabilize Gaza at the same time Israel is looking to destroy remnants of Hamas is “fantasyland,” said Katulis, who expects the U.S. to back security and political leadership from among more moderate Palestinian groups, potentially the Palestinian Authority. “The early thinking is that it’s some form of an indigenous force,” he said, referring to elements of the Palestinian leadership in Gaza from before Hamas came to power in 2007.

One organization that might struggle to take the lead in Gaza governance is the United Nations, although its agencies are heavily involved in humanitarian efforts.

The U.N. Security Council has been deadlocked over the Gaza issue, one of many divides between the U.S. and Russia, which each have veto power, and Israeli officials have criticized Secretary-General António Guterres and threatened to withhold visas from U.N. workers.

The Information : What it Takes to Make Open-Source AI Cheaper Than OpenAI; Micr

What it Takes to Make Open-Source AI Cheaper Than OpenAI; Microsoft Goes Multimodal


When Meta Platforms’ released its open-source Llama models earlier this year, the tech giant was praised for giving developers a free alternative to the expensive, bleeding-edge large-language models offered by proprietary LLM developers such as OpenAI.

Turns out it’s not so simple.

In many cases, using open-source LLMs can actually be more costly than proprietary AI software from OpenAI and its ilk, as I discovered while researching this piece I published this morning.

That’s because OpenAI and Meta are providing essentially different services. When companies use OpenAI’s model, it takes care of all the pesky behind-the-scenes work of building and running a model. All users have to do is tap into their nicely-packaged application programming interface. In contrast, anyone relying on an open-source model like Llama starts with a bare-bones model. They then have to figure out the complexities of actually getting that model up and running, which can end up being expensive.

Luckily, there are a few things startups can do to use open-source AI models without breaking the bank.

First, not every task requires a state-of-the-art model. As I discussed in my piece, smaller models can handle simpler tasks like summarizing and translating text, while reasoning-heavy applications like code generation are best-suited for the latest LLMs like GPT-4. (And there’s even more wiggle room within that. For instance, research has shown that open-source code generation models like Meta’s Code Llama can be greatly improved by training them on model-generated coding examples—crazy, I know!)

Some of these smaller models, like the 7 billion parameter version of Llama 2, can run on older-generation AI chips, such as Nvidia’s V100, that are cheaper and more widely available than the chipmaker’s in-demand H100s, said Vikram Sreekanti, cofounder and CEO of model deployment startup RunLLM. (In case you’ve forgotten, “parameters'' refers to the “settings” of a model.) Even better, these smaller models are faster to run, making them optimal for the generative AI features that customers use the most.

These models can also be optimized further through a couple different approaches. One is called “quantization,” a technique that simplifies the parameters of a model. In most cases, it can significantly reduce compute needs with only a slight hit to model quality.

Another is “batching,” in which model queries are bundled together and processed simultaneously rather than one at a time, which uses the AI hardware more efficiently. Unfortunately, most companies can only really take advantage of that hack once they reach a certain scale, as it requires a consistently high volume of model requests (something that OpenAI and its peers benefit from).

An additional way developers can improve their model’s performance without having to spend too much is by training them on their own data, otherwise known as “finetuning.”

But Stephanie, you might say, OpenAI offers finetuning for GPT-3.5 Turbo too! Sure, you’re not wrong there. However, OpenAI’s finetuning uses a technique called low-rank adaptation of large language models, or LoRA, according to a person with direct knowledge of the product. LoRA is cheaper but slightly less effective at improving a model’s performance because it tweaks just a subset of a model’s parameters versus full-parameter finetuning. So if you’re a startup that wants more control over model quality, perhaps opt for full-parameter finetuning on an open-source LLM instead.

The Takeaway: If you’re a startup that’s just getting up and running, it may make sense to start out by experimenting with OpenAI’s proprietary models, especially since they handle the hassle of optimization and batching for you. However, once you’re able to grow your customer base, open-source models could provide a cheaper and more customizable alternative. (Plus, there are plenty of companies out there, like OctoML and Mosaic, that can help you with model optimization.) And if you’re lucky, the combination of optimization and batching could land you an open-source model that runs at less than 1% the cost of a finetuned version of GPT-3.5 Turbo, according to one startup I spoke with.

Here’s what else is going on…

Microsoft Dips Its Toes In Multimodal
A few weeks ago, we told you that Microsoft’s research division had a new priority: building AI models that are smaller and cheaper than OpenAI’s GPT-4 and that could still mimic the larger model’s quality. As we reported, one of Microsoft’s priorities was to make those smaller models “multimodal,” meaning they could understand images in addition to text.

On Wednesday, Microsoft researchers confirmed that they’ve upgraded one of their in-house AI models, dubbed Phi, to be multimodal. That breakthrough has big implications for developers who want to build AI into their apps but don’t want to pay a premium for state-of-the-art models like GPT-4. Microsoft Research has said that it eventually plans to release Phi as an open-source model, meaning anyone would be able to use it. And Phi is just a fraction of the size of OpenAI’s models, with 1.5 billion parameters compared to GPT-4’s several trillion parameters.

The proliferation of smaller models like Phi could chip away at OpenAI’s dominance. Microsoft product teams have already been switching out GPT-4 for open-source models to carry out more rudimentary tasks in products like Bing, The Information first reported. And companies who initially paid top dollar for OpenAI’s models have recently been eyeing a rising tide of cheaper competitors, including open-source models.—Aaron Holmes

FT : Ferrari hybrid sales overtake traditional models

Ferrari hybrid sales overtake traditional models
Supercar maker raises profit expectations again after surge in orders for custom features

Sales of Ferraris with hybrid engines have overtaken those of traditional models for the first time, a seminal moment for a brand inextricably linked with supercars driven by noisy, powerful engines. 

Some 51 per cent of Ferrari’s cars sold between July and September were hybrid, compared with 43 per cent in the previous three months and just 19 per cent a year ago. 

Four of the 13 models offered by Ferrari in the quarter were hybrids. Ferrari’s three-month sales were driven by the 296 GTB and GTS supercars, which are hybrids that also use a V6 engine, as well as the top-end SF90 hybrid hypercar. 

A steady increase in production of its non-hybrid Purosangue, a V12 engine powered high-riding vehicle, means that the hybrid sales may drop back below engine-only models in a future quarter. The supercar brand does not expect to launch its first fully-electric model until 2025.

The company has promised that 40 per cent of its line-up will be battery-only cars by the end of the decade, but has refused to put an end date on production of engine-only models.

An increase in the number of Ferrari customers paying extra for custom features such as highly coloured brake callipers led the brand to upgrade its annual profit expectations again on Thursday. 

The business made €332mn in net profit between July and September, 46 per cent higher than the same period a year earlier. While car deliveries only rose 9 per cent to 3,459, revenues climbed 24 per cent to €1.5bn, with higher margins from an increase in “personalisations”.

It now expects adjusted earnings for the year to be €1.57bn, up from previous guidance of €1.51bn-€1.54bn. Bernstein auto analyst Daniel Roeska said the company’s raising of profit expectations was “Groundhog Day”.

Ferrari said its cars were now sold out until 2026 and “[the] order book remains at highest levels reflecting strong demand across all geographies”.

Sales in Europe, the Middle East and Africa — its largest region — rose 8 per cent to 1,398 cars, while sales in the Americas rose by a fifth to 1,096 cars. 

FT : Rise in German unemployment points to cracks in eurozone labour market

Rise in German unemployment points to cracks in eurozone labour market
More companies cut jobs as Europe’s largest economy stagnates and borrowing costs rise

The number of unemployed people in Germany rose by the biggest amount in more than a year as vacancies fell in October, adding to signs of cracks in Europe’s labour market.

The region’s workforce has remained resilient despite a sharp slowdown in growth. But economists and policymakers believe the labour market is weakening as the stagnating economy and higher borrowing costs drive more companies to cut jobs. The German unemployment rate climbed from 5.7 per cent in September to 5.8 per cent last month — the highest level in the EU’s largest economy since June 2021. 

“The lay-off rate in Germany has started to increase a bit, but from the lowest level we have ever seen,” said Enzo Weber, head of research at the Institute for Employment Research in Nuremberg. “We are starting to see the delayed effects of last year’s energy price shock.”

Several German companies have outlined plans to cut jobs in recent weeks, including the country’s biggest lender Deutsche Bank and chemicals producers BASF and Lanxess.

Weber said his institute’s European unemployment barometer had fallen to its lowest level since the middle of 2020 when lockdowns during the coronavirus pandemic brought the economy to a standstill.

Luis de Guindos, vice-president of the European Central Bank, said there were signs that the labour market was struggling to remain “a bright spot” for the eurozone economy. “Fewer new jobs are being created, including in services, which suggests that the cooling of the economy is gradually feeding through to employment,” he said in a speech in Madrid this week.


Germany’s federal employment agency reported a seasonally adjusted increase of 30,000 unemployed people from a month earlier, taking the jobless total in Europe’s largest economy to 2.61mn, up 165,000 from a year earlier.

Germany’s unemployment rate has risen from 5 per cent in March 2022, shortly after Russia launched a full-scale invasion of its neighbour. The agency said the arrival of more than 1mn Ukrainian refugees to Germany had added 0.4 percentage points to its jobless rate.

Many German companies are still suffering from labour shortages, which were reported by 43 per cent of companies surveyed by Munich’s Ifo Institute in July. Economy minister Robert Habeck last month blamed “desperate” labour shortages for the expected 0.4 per cent contraction of the German economy this year, as he called for an increase in skilled immigrants to bolster its ageing workforce.

But the agency said job vacancies posted by companies had fallen to 749,000 in October, down 12,000 from the previous month and 98,000 from a year earlier. 

“You cannot defy gravity forever and you have what looks like a recession now in Germany,” said Ludovic Subran, chief economist at German insurer Allianz.

While eurozone unemployment is expected to stay at a record low of 6.4 per cent when data for October is released on Friday, Subran forecast both the German and eurozone unemployment rates would rise by half a percentage point next year as key sectors lay off workers.

“The construction sector is in decline and that is a very labour-intensive industry,” he said.

Germany’s economy shrank 0.1 per cent in the three months to September from the previous quarter, according to data published this week, confirming its status as one of the world’s weakest major economies.

Higher interest rates have hit the construction sector, causing a sharp decline in housebuilding. Construction activity fell 2 per cent in Germany and 1.3 per cent in the eurozone in the three months to September compared with the previous quarter.

Andrea Nahles, head of Germany’s employment agency, said the country’s long period of stagnation stretching back to last winter “cannot remain without visible consequences for the labour market”. But she added: “In view of the economic data, it is holding up comparatively well.”

Yet last month’s S&P Global survey of purchasing managers at eurozone businesses found falling orders had “prompted firms to reduce employment for the first time since January 2021”. Manufacturers shed jobs at the fastest rate for three years, it found, while “hiring came close to stalling in the services sector”.

>>> Europe : Brokers Upgrades & Downgrades - 2nd of November 2023 V2(+)

>>> Up
* Ashmore Raised to Hold at Canaccord; PT 150 pence (+)
* Babcock Raised to Buy at Shore Capital; PT 465 pence
* Cemex ADRs Raised to Buy at Citi; PT $8.20
* Cicor Tech Raised to Buy at Baader Helvea; PT 58.50 Swiss francs
* Clorox Raised to Buy at Citi; PT $150
* Loihde Raised to Accumulate at Inderes; PT 13.50 euros (+)
* Multiconsult Raised to Buy at ABG; PT 160 kroner
* Orsted Raised to Buy at DNB Markets; PT 325 kroner
* Orsted Raised to Outperform at Oddo BHF; PT 350 kroner (+)
* Qiagen Raised to Buy at Invest Securities SA; PT 43 euros (+)
* YIT Raised to Reduce at Inderes; PT 1.65 euros

>>> Down
* AB InBev price target lowered to EUR 67 from EUR 68 at Barclays
* AFRY AB Cut to Sell at DNB Markets; PT 105 kronor
* Beasley Broadcast Cut to Neutral at Guggenheim; PT 75 cents
* Boliden Cut to Sell at Berenberg
* doValue Cut to Neutral at Mediobanca SpA; PT 5.20 euros
* EFG International Cut to Sell at Citi; PT 9.80 Swiss francs
* Estee Lauder Cut to Sector Perform at RBC; PT $115
* Jupiter Cut to Hold at Canaccord; PT 70 pence (+)
* Wartsila Cut to Hold at SEB Equities; PT 12 euros

>>> Initiation
* Amazon Rated New Buy at HSBC; PT $160
* Avacta Group Reinstated Sell at Numis; PT 70 pence
* C&C Rated New Neutral at Redburn (+)

>>> Call
* Boliden Cut to Sell at Berenberg as Operational Turnaround Drags

>>> Stoxx 600 Pre-Market Indications

  • Lufthansa (LHA TH) +6.2%
    • Lufthansa Upbeat on Outlook as Travel Boom Seen Continuing (1)
  • Imperial Brands (ITB TH) +2.4%
  • Rio Tinto (RIO1 TH) +2.1%
  • Hugo Boss (BOSS TH) +2%
    • Hugo Boss 3Q Sales at Constant Exchange Rates Beats Estimates
  • Air France-KLM (AFR0 TH) +1.9%
    • Amsterdam Airport Set for Flight Cancellations Due to Ciarán (1)
  • Novo Nordisk (NOV TH) +1.9%
    • *NOVO NORDISK 3Q WEGOVY SALES DKK9.65B, EST. DKK8.07B
  • Delivery Hero (DHER TH) +1.6%
  • Glencore (8GC TH) +1.5%
  • Bawag (0B2 TH) +1.4%
  • ASML (ASME TH) +1.4%
  • L’Oreal (LOR TH) -0.6%
  • Prosus (1TY TH) -1%
  • Hochtief (HOT TH) -1.4%
  • Zalando (ZAL TH) -2.5%
    • Zalando Gross Margin Misses, Full-Year Guidance Cut: Street Wrap