- China’s Buyback Plans, GDP Fuel Asia Stock Gains: Markets Wrap
Asian equities rose as investors digested China’s better-than-expected economic data and stock buyback
program details from the country’s central bank. Gold hit a new record. Shares in China and Hong Kong
extended gains after the People’s Bank of China said it set up a relending mechanism with an initial 300
billion yuan ($42.1 billion) quota for bank loans used in share buybacks. Earlier, data also showed that the
nation’s latest gross domestic product, industrial production and retail sales figures beat estimates. - Dow closes at fresh record, Nasdaq ends higher as chipmakers rally
The Dow Jones Industrial Average rallied to a new record close after strong economic data eased lingering
fears of a potential recession. However, the S&P 500 failed to set a new benchmark, even though it had hit an
intraday record earlier in the session as the artificial intelligence trade mounted a revival. The blue-chip index
rose 161 points, or 0.37%, to 43,239.05, helped by a 9% gain for Travelers on the back of strong quarterly
results. The Nasdaq Composite inched higher on Thursday after getting a boost from semiconductor names,
and ultimately added 0.04% to 18,373.61. The S&P 500 closed down 0.02% to 5,841.47. - Oil edges up, but on track for biggest weekly loss in over a month
Crude oil futures inched higher on Friday, supported by a surprise drop in U.S. oil inventories and simmering
Middle East tensions, but prices were headed for their biggest weekly loss in more than a month on worries
of lower demand. Brent crude futures rose 16 cents, or 0.2%, to $74.61 a barrel by 0025 GMT while U.S. West
Texas Intermediate crude was at $70.84 a barrel, up 17 cents, or 0.2%. - Safe-haven gold breaks $2,700 per ounce level as uncertainty looms
Gold breached the $2,700-per-ounce level on Friday for the first time ever, as U.S. election jitters and
simmering Middle East tensions boosted safe-haven demand, while a looser monetary policy environment
also added fuel to the rally. Spot gold firmed 0.5% to $2,706.76 per ounce by 0220 GMT, adding nearly 2% so
far in the week. U.S. gold futures rose 0.5% to $2,722.00. - Japan’s Inflation Slows for First Time Since April Ahead of BOJ
Japan’s key inflation gauge slowed in September for the first time in five months, ahead of a central bank
meeting later this month where the board is widely expected to keep the interest rate unchanged.
Consumer prices excluding fresh food rose 2.4% from a year earlier, decelerating from 2.8% in August as
government utility subsidies softened the impact of ongoing inflation, according to the Ministry of Internal
Affairs Friday. The result came in slightly stronger than the consensus estimate of 2.3%. - Yen’s Slide to 150 Puts Japan on Alert for Further Weakening
Japan’s top currency official’s warning after the yen weakened beyond 150 per dollar underscored the
possibility of further slippages despite intervention risks. The yen rebounded as much as 0.2% to 149.86 per
dollar after the official, Atsushi Mimura, said there are currently slightly one-sided, sudden moves in the
foreign-exchange market. Yen watchers see the currency depreciating as far as 160 per dollar, largely due to
strong data from the US that’s leading traders to dial back bets on rate cuts from the Federal Reserve. - European Central Bank cuts rates, Lagarde flags downside risks to inflation outlook
The European Central Bank on Thursday cut its key interest rate to 3.25%, in its third quarter-percentage-
point reduction of the year. The move at the October meeting had been fully priced by markets after
policymakers flagged reduced inflation risks and a weakening growth outlook. In a statement following the
decision, the ECB’s Governing Council called the process of disinflation well on track in its most optimistic
statement in the current cycle. - China reports third-quarter GDP growth of 4.6%, slightly beating expectations
China’s National Bureau of Statistics on Friday reported third-quarter GDP growth of 4.6% year on year,
slightly exceeding the 4.5% expected by economists polled by Reuters. Other data also released on Friday,
such as retail sales and industrial production, had also beat expectations, a hopeful sign for the world’s
second largest economy. Beijing has faced public scrutiny over its ability to meet its own annual growth
target of around 5%. - ECB Officials See December Cut Very Likely With 2% Goal Nearer
European Central Bank officials reckon another interest-rate cut in December is highly likely, with inflation to
settle at 2% faster than envisaged, according to people familiar with the matter. - US Retail Sales Showcase Resilience of Economy’s Growth Engine
US retail sales strengthened in September by more than forecast in a broad advance, illustrating resilient
consumer spending that continues to power the economy. The value of retail purchases, unadjusted for
inflation, increased 0.4% after a 0.1% gain in August, Commerce Department data showed Thursday.
Excluding autos and gasoline stations, sales climbed 0.7%. - Hamas leader Yahya Sinwar has been killed, Israeli foreign minister says
Israeli Foreign Minister Israel Katz said that Hamas leader Yahya Sinwar was killed by Israel’s military forces.
Israel previously accused Sinwar of orchestrating the Oct. 7 terror attacks perpetrated by Hamas in the
Jewish state, which propelled the Israeli government of Benjamin Netanyahu to launch a retaliatory offensive
in the Gaza Strip. More than 42,000 Palestinian people have been killed in the Gaza Strip since Oct. 7,
according to the local Health Ministry, while 101 people abducted from Israel are believed to remain
hostages of Hamas. Previously leader of Hamas in the Gaza Strip, Sinwar assumed overall command of the
Iran-backed organization in August, following the assassination of former political chief Ismail Haniyeh. - US-listed shares of Taiwan Semiconductor Manufacturing Co. rose 9.8% on Thursday, after the
chipmaker gave a strong forecast and touted the sustainability of AI hardware demand
Margins were seen as a highlight, and the report helped to ease recent concerns about the chip space that
followed ASML’s results. THIRD QUARTER RESULTS: Net income NT$325.3 billion, +54% y/y, estimate
NT$299.3 billion. Gross margin 57.8% vs. 53.2% q/q, estimate 54.8%. Operating profit NT$360.77 billion,
+58% y/y, estimate NT$330.82 billion. Operating margin 47.5% vs. 42.5% q/q, estimate 44.6%. Sales
NT$759.69 billion, +39% y/y, estimate NT$751.06 billion. FOURTH QUARTER FORECAST: Sees sales $26.1
billion to $26.9 billion, estimate $24.94 billion. Sees gross margin 57% to 59%, estimate 54.7%. Sees
operating margin 46.5% to 48.5%, estimate 44.3%. - Blackstone rose 6.3% on Thursday after posting third quarter results, with analysts citing strong fund
performance and flows
THIRD QUARTER RESULTS: Distributable income/share $1.01 vs. 94c y/y, estimate 91c. Assets under
management $1.11 trillion, +10% y/y, estimate $1.1 trillion. Total segment revenue $2.43 billion, +4.8% y/y,
estimate $2.36 billion. Inflows $40.54 billion, estimate $35.8 billion. Outflows $11.32 billion. COMMENTARY:
Declared quarterly dividend of 86c per common share payable on Nov. 4, matching forecast. Evercore
(outperform): Blackstone’s underperformance over the past year or two has been tied to real estate; the
bottoming process appears to have happened, and lower rates and industry dynamics may start boosting
performance, says analyst Glenn Schorr. Schorr also notes that the credit and insurance business is growing
solidly at up 22% y/y, overall deployment picked up, performance is mostly very good, there’s broad-based
fundraising, and the monetization environment is looking better for 2025. Performance and flows were
mostly good and pretty broad, Schorr concludes. - ABB Ltd. rose 2.4% after it raised its margin outlook as massive investments in data centers fueled
demand for its power-grid business, helping offset weaker sales of factory automation products
The company said orders rose 2% in the third quarter to $8.2 billion, and it now sees its profit margin
exceeding the roughly 18% it had previously forecast. Soaring investments in data centers, driven by growth
in artificial intelligence, have been a bright point for ABB, which produces transformers that enable power
grids to feed the centers’ substantial energy needs. While revenue from the electrification business jumped
10% in the quarter, sales of its robotics and factory automation products continued to suffer, as customers
focused on reducing inventories after a period of supply-chain stress. Overall orders from China were down
about 2% in the quarter on a comparable basis, and fell 7% in the US. ABB now sees revenue growth for the
year coming in below its previous estimate of about 5%. - Elevance Health shares sank 10.6% after the insurer cut its outlook for the year, signaling wider problems in the sector
Adjusted profit for the year will be about $33 a share, down from the earlier forecast of at least $37.20 a
share. Elevance blamed unprecedented challenges in its Medicaid business for the results. States have
purged millions of people from the safety-net program since the end of the Covid-19 pandemic, and insurers
have said its payments are inadequate for the medical needs of the members who remain. Health insurers
recorded years of strong profits and robust growth through the Covid-19 pandemic. Membership in Medicaid
plans grew as states halted routine processes to verify that people qualified for the program. Meanwhile,
many patients curtailed their medical visits for fear of catching the virus. Both those trends began reversing
last year, as people returned for surgeries and other care. Medicaid eligibility verifications resumed too.
More than 14 million people exited the program since its peak in March 2023, according to tallies by health
research group KFF, about a 15% drop. - Travelers Cos.’s shares rose 9% after the insurer reported net income that exceeded analyst estimates
in the third quarter
The firm reported profit that tripled to $1.3 billion from a year ago, surpassing the highest estimate. The
performance was driven by a record underlying underwriting income, as well as an 18% net investment
income gain amid higher fixed-income yields and returns from private equity returns partnerships. We are
very confident in our outlook for our business into 2025 and beyond, Chairman and Chief Executive
Officer Alan Schnitzer said. The firm also posted $939 million in catastrophe losses in the three months
through September, above the $745 million anticipated by analysts. The losses were driven by Hurricane
Helene, which made landfall in Florida’s Big Bend region in late September before wreaking devastation. In
spite of that hit, the firm’s consolidated combined ratio improved to 93.2% from 101% in the same period a
year earlier, below estimates, meaning that the insurer spent 93.2 cents for expenses and claims on every
dollar it received from clients. - Shares of Expedia and Uber moved in opposite directions following a Financial Times report, which
cited people familiar with the process, that Uber explored a potential takeover bid for Expedia
The paper said Uber’s interest in the online travel company was at a very early stage. Following the report,
Expedia rose 4.8%, while Uber fell 2.4%. Analysts at Bernstein said they were surprised by the report, adding
that they hoped any expansion into travel by Uber would be less aggressive: Dara Khosrowshahi’s (Uber’s
current chief executive and former CEO of Expedia) desire to build a multi-vertical platform has always left
the door open to a bigger push into travel. Nonetheless, we have been hoping that any such forays into travel
would come via partnership (i.e., an extension of the UK strategy) and not outright M&A – particularly a
potential deal of this size. - Netflix Inc. added more than 5 million customers in the third quarter and eclipsed Wall Street’s
expectations on every major financial metric despite a new program slate constrained by last year’s strikes in Hollywood
Sales for the period grew 15% to $9.83 billion while earnings increased to $5.40 a share. Analysts were predicting Netflix would add 4.52 million subscribers. Shares of Netflix rose 5% in after-hours trading. We’re feeling really good about the business, Co-Chief Executive Officer Ted Sarandos said. We had a plan to re-accelerate growth and we delivered on that plan. The company predicted sales next year will increase between 11% to 13%, to as much as $44 billion, through a mix of new members and price increases. Netflix will increase prices in Spain and Italy on Friday, and said it will phase out one of its cheaper-priced plans in Brazil later this quarter. Two regions — Europe, the Middle East and Africa, and the Asia-Pacific — accounted for almost all of the company’s new customers. Netflix lost customers in Latin America for the first time since early 2023. New subscribers in the current, fourth quarter will exceed the third-quarter total, the company also said. The company finished the quarter with 282.7 million subscribers. - Intel seeks billions for minority stake in Altera business, sources say
Intel is looking for an investor that would acquire at least a minority stake worth billions of dollars for its
Altera subsidiary, according to sources with knowledge of the matter. Any deal would look to value Altera at
a minimum of $16.7 billion, which is what Intel paid in 2015. It’s possible that Intel would look to find a
majority acquirer for the business.
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