Gapping down
In reaction to earnings/guidance:
- KFY -6.4%, SPWH -6%, GEF -5.9%, GTE -4.8%, VRNT -2.4% (also authorizes new $200 mln share repurchase program)
Other news:
- RLMD -37.5% (announces top-line results from Phase 3 RELIANCE I Trial for REL-1017)
- DSGN -25.5% (reports data from trial of DT-216)
- CUTR -13.4% (pricing of $100 mln aggregate principal amount of 4.00% convertible senior notes due 2029)
- CHEF -6.9% ($250 mln convertible notes offering)
- NEP -5.2% ($500 mln convertible notes offering)
- UNIT -3% (RVMD to regain global rights to RMC-4630 following SNY's termination of collaboration)
- SNY -2.6% (RVMD to regain global rights to RMC-4630 following SNY's termination of collaboration)
- TIL -2.5% (announced a reprioritization of its clinical programs to focus on development of its CoStAR-TIL product candidates; Reducing U.S. headcount by approximately 60%)
- CABA -2% (offering of 6,213,776 shares at a price of $5.52/share for aggregate proceeds of $35 mln)
- BVS -1.8% (announces restructuring)
Analyst comments:
- APP -0.9% (downgraded to Neutral from Buy at BTIG Research)
Gapping up
In reaction to earnings/guidance:
- MOMO +12.4%, HCP +6.7%, GMS +5.4%, BZFD +4.8%, OXM +4.2%, NAPA +3.6% (also CFO to retire), KMI +0.5%
Other news:
- RXDX +12.2% ($250 mln stock offering)
- RAPT +4.8% (presents update from its phase 1/2 clinical trial for FLX475 as monotherapy and in combination with pembrolizumab in patients with advanced cancer)
- CARG +4.4% (announces $250 mln repurchase program)
- AKRO +4.3% (announces that efruxifermin has received a Breakthrough Therapy Designation from the FDA for the treatment of nonalcoholic steatohepatitis)
- MT +3.2% (inaugurates flagship carbon capture and utilisation project at its steel plant in Ghent Belgium)
- SFM +3.2% (announced that Alisa Gmelich has joined as Senior Vice President Chief Marketing Officer effective December 5)
- PBYI +2.4% (Presents Updated Findings from the TBCRC-022 Trial at the 2022 San Antonio Breast Cancer Symposium)
- HHC +1.6% (Pershing Square disclosed the purchase of ~657K shares)
- XOM +1.5% (provides corporate plan update; expects to double earnings and cash flow potential by 2027)
- PDCE +1.3% (declares special dividend of $0.65/sh)
- GTHX +1.3% (reports Initial Results from Phase 2 Mechanism of Action Trial in Early-Stage Triple Negative Breast Cancer Show that a Single Dose of Trilaciclib Favorably Alters the Tumor Microenvironment)
- CRTO +1.3% (announces the extension of its share repurchase authorization from $280-480 mln)
- JWN +1.2% (names interim CFO)
- CVX +1.2% (announces 2023 CapEx budgets)
Analyst comments:
- AIRC +2.1% (upgraded to Buy from Sell at Goldman)
- BA +0.7% (assumed with a Buy at Citigroup)
Green Hydrogen Gets a Boost in the U.S. With $4 Billion Plant
The planned factory, a joint venture by Air Products and AES, will be the biggest facility powered by wind and solar in the U.S.
Industrial-gas manufacturer Air Products APD 1.12% and Chemicals Inc. and power company AES Corp. AES -0.53% are planning to build a $4 billion renewable-powered hydrogen factory in North Texas, the latest large investment in green energy since Congress passed significant tax credits for such projects.
The factory, which is slated to start operations in 2027 and will be built on the site of a retired coal plant, will use solar and wind power to manufacture the hydrogen, the companies said Thursday. It will be able to produce more than 73,000 metric tons of hydrogen a year, making it the largest such facility in the U.S. and among the top 10 worldwide, according to data from the Paris-based International Energy Agency.
The investment reflects increasing interest in hydrogen as a climate-friendly alternative to fossil fuels—particularly green hydrogen, so-called because it is produced from water using electricity from renewables, in a process that doesn’t emit carbon dioxide. But green hydrogen has been prohibitively expensive to make, and most plants so far have been small, pilot projects, with a handful of larger factories in Europe and Saudi Arabia.
The passage of U.S. legislation in August that offers tax incentives for clean-power projects is changing those economics and starting to make low-carbon hydrogen commercially viable, the companies said.
“This puts the U.S. on the green-hydrogen map,” said Andrés Gluski, chief executive of Virginia-based AES, which will operate the solar and wind farms for the project.
Most hydrogen today is used in fossil-fuel refining and as a main ingredient in fertilizer, with total demand estimated at roughly 94 million metric tons a year. But it has long been viewed as a green fuel because it produces water vapor when burned and can be used instead of oil and gas in a variety of industries—from shipping to steel—where there are few other low-carbon alternatives.
If the world is to hit its climate targets, production of hydrogen could more than double by 2030 and quintuple by 2050, the IEA forecasts.
The problem is that hydrogen is seldom found on its own and must be separated out of compounds such as water or natural gas. That process is expensive, takes a lot of energy and can emit large amounts of carbon dioxide, particularly when the hydrogen is made from natural gas, as most is today.
Even hydrogen made in the cheapest and dirtiest ways costs a little more than $1 a kilogram, according to estimates from a February Goldman Sachs report—around double the price of natural gas in the U.S. Making it a cleaner way, by removing and storing some of the carbon dioxide emitted, adds significantly to the cost. Producing green hydrogen with renewables could cost as much as $5 a kilogram, estimated Anne-Sophie Corbeau, a global research scholar at Columbia University’s School of International and Public Affairs.
When other costs such as storage and transportation are included, hydrogen becomes too expensive to sub in for many fossil-fuel uses, Ms. Corbeau said.
The new U.S. tax credits do a lot to close the price gap, especially for projects that use wind and solar to produce hydrogen, said Air Products Chairman and Chief Executive Seifi Ghasemi. The company expects to receive credits of about $5 a kilogram, which would allow Air Products to sell at a price that would still represent a premium for buyers but not a significant one, he said.
Air Products is already the world’s biggest producer of hydrogen, making around 3.5 million metric tons a year, Mr. Ghasemi said. The company plans to sell the green hydrogen from the Texas plant to some of its climate-conscious industrial customers as well as users such as trucking companies looking for sources of fuel that don’t emit greenhouse gas, he said.
The price of low-carbon hydrogen should come down as well, as factories scale up and costs decline for technologies such as carbon capture or electrolyzers, used for separating the gas from water, industry experts say.
Air Products is investing in other hydrogen plants using clean-energy technologies as well as planning to retrofit current factories so they are greener, Mr. Ghasemi said. By 2035, the company aims to have all of its facilities producing low-carbon hydrogen, he said.
New Dengue Vaccine Approved in Europe
Vaccine from Japanese drugmaker Takeda will provide an alternative to a Sanofi vaccine that has been dogged by safety issues
European health regulators cleared a new dengue vaccine from Takeda Pharmaceutical Co., a decision that could pave the way for its use around the world against the devastating mosquito-borne virus.
The European Commission approved the two-dose shot in people ages 4 years and older, Takeda said Thursday.
The approval of the vaccine, called Qdenga, is likely to speed its review in many countries outside Europe, such as Mexico, Argentina and Thailand, where dengue is endemic. Indonesia approved the Takeda shot’s use last summer in people 6 to 45 years.
The new vaccine would provide an alternative to the other licensed vaccine, Dengvaxia from Sanofi SA, which has been dogged by safety issues.
Countries outside Europe must approve the vaccine themselves. Some participated in the commission’s review, however, and will likely accelerate their own processes to make the shot available, said Gary Dubin, president of Takeda’s global vaccine business unit.
“We know dengue has a very significant impact on all these people and all these countries so we think it’s a very significant milestone,” Takeda Chief Executive Christophe Weber said in an interview.
Qdenga could generate peak annual sales of at least $700 million, Tokyo-based Takeda said.
Approximately four billion people in tropical regions of the world are at risk of infection with the virus, which is carried by an aggressive mosquito that teems in populated areas.
An estimated 390 million people a year are infected with dengue, about 100 million actually become ill, and 40,000 die of severe disease, according to the World Health Organization and U.S. Centers for Disease Control and Prevention.
Most dengue cases don’t produce symptoms or are mild, but some people can develop flulike illness such as a high fever and muscle pain and in rare instances die.
Sanofi said in 2017 that Dengvaxia could in some cases worsen, rather than prevent, symptoms of dengue. Children who were immunized in the Philippines fell ill, with some hospitalizations and deaths.
Since Sanofi disclosed the safety issues, public health experts and governments around the world have been looking forward to the potential availability of a new vaccine.
The WHO recommends against giving Dengvaxia to people who haven’t been previously infected with dengue.
A Sanofi spokesman said that U.S. and European authorization of its vaccine in endemic areas supports the “public health value of the vaccine in dengue prevention.” He said some countries rely on Dengvaxia to protect against dengue and that the company is committed to helping prevent the disease and will work to make Dengvaxia available where it is registered.
Qdenga doesn’t require people to be tested for previous dengue infection, unlike Sanofi’s vaccine, Takeda executives said.
“The fact that our vaccine can be used regardless of prior exposure is a massive difference” between the Takeda and Sanofi vaccines, Mr. Weber said.
Researchers studied Qdenga in a large Phase 3 trial of more than 20,000 healthy children ages 4 to 16 years.
The researchers found the vaccine reduced the risk of dengue illnesses in children by about 80% some 12 months after they got the second dose, Takeda reported in the New England Journal of Medicine in 2019.
Researchers continued to monitor study subjects for a total of 4½ years. The researchers found the vaccine was about 84% effective against hospitalized dengue and 61% against symptomatic dengue, according to data Takeda presented at a medical conference earlier this year.
Researchers said they haven’t found any major safety concerns during the testing.
Takeda has also filed for regulatory approval in the U.S.
The Biotech Takeout Menu Gets Pricier
Biotech investments are typically risky, but companies regarded as natural takeover targets for big pharma are outperforming
Biotech stocks don’t behave like havens in a volatile market. Many have been trading below the value of their cash reserves over the past year.
But a subset of the sector, those best positioned to help fill big pharma’s looming sales holes, are outperforming their peers. Large-cap biopharma companies are facing a $200 billion patent cliff, with sales of key drugs losing patent protection in the next few years.
Some deals this year include Pfizer ‘s acquisition of Biohaven Pharmaceuticals for $11.6 billion, Johnson & Johnson ‘s agreement to acquire the heart-device maker Abiomed for $16.6 billion and Bristol Myers Squibb ‘s purchase of Turning Point Therapeutics for $4.1 billion. In all, global pharmaceutical deals totaled $65.8 billion so far in 2022, according to the data company Refinitiv.
Biotech investors are well aware that executives are on the prowl and that there is a limited pool of companies that could move the needle financially this decade. A basket of 13 companies seen as takeout targets in a survey conducted by Jefferies healthcare strategist Will Sevush is up 62% on average in the past six months. That compares with a 17% gain for a leading biotech exchange-traded fund, the SPDR S&P Biotech ETF.
The latest to entertain offers from big pharma is Horizon Therapeutics. The company late last month said it was fielding takeover interest from Amgen Inc., Sanofi SA and Johnson & Johnson’s drug arm. (J&J has since pulled out of the talks.) The stock is up over 20% since The Wall Street Journal first broke the story, lifting its market capitalization to about $22 billion. Analysts at Jefferies see a takeout deal valuing it at somewhere between $25 billion and $30 billion.
Mr. Sevush’s list of companies, which includes Horizon as well as other possible takeover targets such as Alnylam Pharmaceuticals, Sarepta Therapeutics, Mirati Therapeutics and Akero Therapeutics, generally consists of two buckets, he explains. In the pricier bucket are the more mature biotechs with valuable pipelines on top of approved medications that could scale to multibillion-dollar products during the second half of the decade. Companies such as Horizon or Seagen Inc., which earlier this year held talks with Merck & Co., would fit into that group.
The other bucket contains smaller companies with late-stage pipeline products that could help big pharma compete with rivals in highly profitable medical areas. These companies typically have no sales, but impressive late-stage data means their pipelines are relatively less risky. That doesn’t mean investors shouldn’t expect a bumpy ride. Mirati’s stock had been soaring as of late because of reports of a potential takeover. Yet, while the company might very well receive U.S. Food and Drug Administration approval for its treatment as a stand-alone for patients with a form of lung cancer who have already received one therapy, data presented on its drug in combination with Merck’s Keytruda disappointed investors and the stock plunged.
Not all of these companies are going to be sold, or at least not immediately. Investors who bid up Seagen during the summer as talks with Merck seemed serious got burned when the discussions broke down. The stock has lost about a third of its value since topping out in early July.
But the hunger for replenished pipelines and maturing products means many of the companies on big pharma’s shopping list could continue to outperform. Betting on a basket of probable targets as deal making heats up still makes a lot of sense.
Early premarket gappers
- Gapping up:
- MOMO +21%, RXDX +7.9%, HCP +6.2%, GMS +5%, BZFD +4.8%, OXM +4.2%, NAPA +3.6%, SFM +3.2%, GTHX +3.1%, KMI +2.8%, PBYI +2.4%, MT +2%, PBF +0.9%, GME +0.9%, ORCL +0.8%, GPC +0.8%, AMZN +0.6%, LSTR +0.6%, KRON +0.6%
- Gapping down:
- RLMD -39.9%, DSGN -27%, CUTR -10%, CHEF -7.4%, SPWH -6%, GEF -5.4%, GTE -4.8%, REPL -3.6%, NEP -3.4%, UNIT -3%, VRNT -2.4%, SNY -2.2%, BVS -1.8%, AI -0.8%, RVMD -0.6%
>>> Up
* BBVA Raised to Buy at AlphaValue/Baader
* Essity Raised to Buy at HSBC; PT 300 kronor
* GSK Raised to Buy at AlphaValue/Baader
* Just Group Raised to Overweight at JPMorgan; PT 95 pence
>>> Down
* Anglo American Cut to Underweight at Morgan Stanley
* Gecina Cut to Reduce at AlphaValue/Baader
* Generali Cut to Underweight at JPMorgan; PT 16.50 euros
* ICADE Cut to Reduce at AlphaValue/Baader
* Nestle Cut to Hold at HSBC; PT 123 Swiss francs
* Nexity Cut to Reduce at AlphaValue/Baader
* Poste Italiane Cut to Neutral at JPMorgan; PT 10.80 euros
* Travis Perkins Cut to Underweight at JPMorgan; PT 800 pence
>>> Initiation
* Alfa Laval Reinstated Hold at Deutsche Bank; PT 280 kronor
* Ergomed Rated New Hold at Shore Capital
* Pandora Rated New Sell at SocGen; PT 394 kroner
* Wartsila Reinstated Buy at Deutsche Bank; PT 11 euros
>>> Call
* Citi Expects European Tech Stocks to Outperform in 2023
* Citi’s Buckland Says US Stocks Stop Pricing Earnings Contraction
* MS Says Miners Pricing in a Lot of Optimism, Anglo American Cut
* Travis Perkins Cut, Be Selective in Building Materials: JPMorgan
Stocks in Asia fluctuated following signs China would further relax its Covid restrictions, while Treasuries flashed warning signs of recession. The dollar strengthened in an indication of demand for havens. Equities in Japan, Australia and South Korea dropped, along with futures for US and European benchmarks. Stocks in Hong Kong rose after media reports that mask-wearing requirements would be scrapped. Shares in mainland China seesawed. The dollar resumed gains after a small decline Wednesday. The offshore yuan held below the 7 level to the greenback as investors continued to balance China easing Covid restrictions and a dimming outlook for the global economy. The Australian dollar fell against the greenback and 10-year Treasury yields rose after a sharp decline in the prior session. Chinese regulators asked the nation’s biggest insurers to buy bonds being offloaded as retail customers pull their cash from fixed-income investments, according to people familiar with the matter. Oil rose after a four-day drop as investors weighed the impact of China’s moves to ease virus curbs against a looming US slowdown. Gold was little changed after rising 0.9% in the previous session on weakness in Treasury yields, with traders looking to Friday’s US producer price report to gauge the Federal Reserve’s next monetary policy moves. US After Hours HCP +8.5%, OXM +4.4%, GME +1.2% higher on earnings; SPWH -5.6%, GEF -4.8%, VRNT -3.8% lower on earnings; DSGN -34.1% falls on clinical data
Nikkei -0.51% Hang Seng +2.68% CSI -0.03% Shanghai -0.08% Shenzen -0.23%
Eur$ 1.0499 CNH 6.9709 CNY 6.9759 JPY 136.99 GBP 1.2187 CHF 0.9419 RUB 62.9848 TRY 18.6411 WTI$ 72.68 +0.93% Gold 1,783 -0.18% BTC 16,818 -0.07% ETH 1,228-0.33%
S&P -0.11% Nasdaq -0.19% EuroStoxx -0.23% FTSE -0.19% Dax -0.16% SMI
Macro :
- Equities May Get a Boost With Congress Eyeing Taxes
- JPMorgan Takes $70 Million Hit on Europe High-Yield Trading Desk
- Citi’s Buckland Says US Stocks Stop Pricing Earnings Contraction
Keep an eye on :
- 888 LN : Banks Tap All Buyers for 888 Junk Debt as They Seek to Shed Risk
- AIR FP : Airbus Aims to Sell More Military Aircraft to Vietnam: VnExpress
- ASML NA : US-Led Curbs on China Tech to Tighten as Dutch Plan New Controls
- BARN SW : Barry Callebaut to Invest $100m in Chatham, Ontario Factory
- CABK SM : €500 Billion Spanish Mortgage Turtle Run vs. EU Has Its Charm
- ALCAR FP : Carmat Offers EU30 million Shares at EU10.50/Share: Terms
- CMBN SW : Cembra Chairman Felix Weber Won’t Be Standing for Re-Election
- ACA FP : Credit Agricole Regional Bank Fined €1.5M by French Regulator
- DBG FP : Derichebourg FY Revenue Beats Estimates
- FGR FP : Eiffage Wins Contract Share Amounting to More Than EU156m
- EPR NO : Europris Keeps Ambition of Like-for-Like Growth Above Market
- IBAB BB : IBA Wins €217M Contract for 10 Proton Therapy Systems in Spain
- MTRO LN : Metro Bank Expects FCA Proceedings to Conclude Shortly
- NUMND NO : Nordic Unmanned Offering of 11.7m Shares Prices at NOK6/Share
- NOVN SW : Novartis Iptacopan Phase III Study Met Primary Endpoint
- PGHN SW : Partners Group to Buy Indian Renewable Energy Platform Sunsure
- RLF SW : Relief Therapeutics Names Weinstein as CEO, Meinen as CFO
- RENE PL : REN Says Government Approves EU475m Network Investment Plan
- RNO FP : Renault-Nissan Talks Seen Lasting Longer on EV Plan Hurdle
- RNO FP : RCI Banque SA Names Patrick Claude as Acting Chairman of Board
- RNO FP : Renault Deputy CEO Clotilde Delbos to Step Down Later This Year
- ROG SW : Roche Alzheimer’s Cerebrospinal Fluid Assays Get FDA Clearance
- SHEL LN : Shell to Shut One Train at Australia’s QCLNG Facility in Dec.
- SIE GY : Siemens Pledges €650 Million to Bolster Its CO2-Cutting Efforts
- UNIT SS : Uniti Group Prices $300m Convertible Notes Offering
- VK FP : Vallourec Holder Nippon Steel Offers 7.85m Shares: Terms
- VICO SS : Vicore Pharma Offering of Shares Prices at SEK20/Share
- WDI GY : Wirecard CEO Braun Gets Day in Court After Two Years Behind Bars
After Hours Summary: HCP +8.5%, OXM +4.4%, GME +1.2% higher on earnings; SPWH -5.6%, GEF -4.8%, VRNT -3.8% lower on earnings; DSGN -34.1% falls on clinical dataAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: HCP +8.5%, BZFD +4.8%, OXM +4.4%, NAPA +3.6% (also CFO to retire), GME +1.2%, DSGX +0.6%, KMI +0.1%
Companies trading higher in after hours in reaction to news: RXDX +2.1% ($250 mln stock offering), LSTR +0.6% (increases stock repurchase auth to 3 mln shares; also special dividend of $2.00/sh), KRON +0.6% (announces selection of recommended Phase 2 dose for KB-0742), PBF +0.3% (names interim CFO), CTOS +0.1% (names new CEO), GOOG +0.1% (GOOG, ORCL, AMZN and MSFT awarded Pentagon cloud computing contract worth up to $9 bln), ORCL +0.1% (GOOG, ORCL, AMZN and MSFT awarded Pentagon cloud computing contract worth up to $9 bln), AMZN +0.1% (GOOG, ORCL, AMZN and MSFT awarded Pentagon cloud computing contract worth up to $9 bln), CVX +0.1% (announces 2023 CapEx budgets)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: SPWH -5.6%, GEF -4.8%, VRNT -3.8% (also authorizes new $200 mln share repurchase program), GTE -1.4%, AI -0.1%
Companies trading lower in after hours in reaction to news: RLMD -37.3% (announces top-line results from Phase 3 RELIANCE I Trial for REL-1017), DSGN -34.1% (reports data from trial of DT-216), CUTR -14.6% ($100 mln convertible notes offering), CHEF -7.6% ($250 mln convertible notes offering), NEP -4.6% ($500 mln convertible notes offering), SNY -3.9% (RVMD to regain global rights to RMC-4630 following SNY's termination of collaboration), REPL -2.5% ($125 mln stock offering), BVS -1.8% (announces restructuring), PDCE -0.2% (declares special dividend of $0.65/sh), JWN -0.1% (names interim CFO)
Closing Stock Market SummaryThe stock market showed some resilience today after a big retreat in the last two sessions. Overall, though, buyers remained a reluctant bunch amid lingering angst about global growth prospects. The major indices were little changed in today's session, yet the Nasdaq Composite continued to underperform.
There was likely also an element of trepidation in play today with market participants eyeing the November Producer Price Index on Friday, the November Consumer Price Index next Tuesday, and the FOMC decision next Wednesday, all of which have the potential to spark outsized reactions.
Bond market buyers, however, did not exhibit the same lack of conviction as stock market participants today. The 2-yr note yield fell 11 basis points to 4.24% and the 10-yr note yield fell 11 basis points to 3.41%.
These moves followed the revised Q3 Productivity Report, which showed a softer 2.4% increase in unit labor costs than the preliminary estimate of 3.5%. That report followed on the heels of trade data from China released overnight that showed a larger-than-expected decline in exports (-8.7% yr/yr) and imports (-10.6% yr/yr) in November.
The softer unit labor cost data helped drive the rally in the Treasury market, yet, despite the sharp drop in market rates, stocks traded in a more reserved fashion, cognizant that the driver of weaker inflation will be weaker growth that does not bode well for 2023 earnings prospects.
In addition, rate hikes by the Reserve Bank of India (+35 bps to 6.25%) and the Bank of Canada (+50 bps to 4.25%) served as reminders of the tighter monetary policy taking root around the globe to curtail inflation by using higher rates to weaken demand.
S&P 500 sector performance reflected the sluggish nature of today's trade. There wasn't a single sector that finished the day up or down more than 0.9%. Health care (+0.9%) and consumer staples (+0.4%) led the outperformers while communication services (-0.9%), information technology (-0.5%), and consumer discretionary (-0.5%) brought up the rear, weighed down by their lagging mega cap components.
The Vanguard Mega Cap Growth ETF (MGK) closed down 0.5% versus a 0.2% loss in the S&P 500 and Invesco S&P 500 Equal Weight ETF (RSP).
- Dow Jones Industrial Average: -7.5% YTD
- S&P Midcap 400: -12.8% YTD
- Russell 2000: -19.5% YTD
- S&P 500: -17.5% YTD
- Nasdaq Composite: -30.0% YTD
Reviewing today's economic data:
- Weekly MBA Mortgage Application Index fell 1.9% versus a 0.8% decline last week
- Nonfarm business sector labor productivity increased 0.8% in the third quarter ( consensus +0.3%) versus the preliminary estimate of 0.3%. Unit labor costs, meanwhile, were up 2.4% versus the preliminary estimate of 3.5%.
- The key takeaway from the report was the softer unit labor cost reading, which was deemed to be a supportive development for the peak inflation view. However, it bears pointing out that productivity is still weak in general, evidenced by the understanding that nonfarm business sector labor productivity decreased 1.3% from the same quarter a year ago.
- Weekly EIA Crude Oil Inventories showed a draw of 5.19 million barrels following last week's draw of 12.58 million barrels
- Consumer credit increased by $27.0 bln in October (consensus $26.5 billion) following an upwardly revised $25.9 billion (from $25.0 billion) in September.
- The key takeaway from the report is that consumer credit continued to expand at a robust pace in October, demonstrating that the demand for credit did not vanish in a rising interest rate environment. That point notwithstanding, a slowdown in the pace of expansion is expected as the persistence of high(er) interest rates, tighter underwriting standards, and some weakening in the labor market reduces loan demand/lending activity.
Looking ahead to Thursday, market participants will receive the following economic data:
- 8:30 ET: Weekly Initial Claims (prior 225,000) and Continuing Claims (prior 1.608 mln)
- 10:30 ET: Weekly natural gas inventories (prior -81 bcf)