- Asian Stocks Waver on US Election Risks, Yen Rises: Markets Wrap
Asian equities retreated as concerns about China’s economy and a tight US presidential election dented
sentiment. The yen halted a three-day drop. Shares in China, Hong Kong and South Korea fell while US stock
futures advanced. Japan’s Finance Minister Katsunobu Kato said he sees one-sided, rapid moves in the
currency market after the yen slumped over 1% against the dollar on Wednesday. - Dow tumbles 400 points, suffering worst day since early September
Stocks fell sharply on Wednesday, with the Dow Jones Industrial Average posting its worst day in more than a
month, as higher Treasury yields weighed on market sentiment. The S&P 500 lost 0.92%, closing at 5,797.42.
The 30-stock Dow plunged 409.94 points, or 0.96%, ending the day’s session at 42,514.95. It was the worst
day since early September for the blue-chip index. The Nasdaq Composite lost 1.6%, ending at 18,276.65.
Both the Dow and S&P 500 notched their third straight losing session. At its session high, the benchmark 10
year Treasury yield topped 4.25%, reaching its highest level since July 26. - Oil prices edge higher, on track for 3% weekly gain
Oil prices edged higher on Thursday, recouping some of the more than 1% losses from the previous session
after U.S. crude inventories rose much more than estimated. Brent crude futures rose 44 cents, or 0.59% to
$75.40 at 0003 GMT, while U.S. West Texas Intermediate crude futures climbed 45 cents, or 0.64%, to $71.22
as an exchange of heavy fire between Israel and Hezbollah continued to worry markets about supply. Brent
was on track for a 3.2% gain in the week, while WTI was set to rise 2.9%. Last week oil fell more than 7% on
worries about Chinese demand and easing concerns about potential disruptions of Middle East oil supplies. - Gold’s record rally pauses due to stronger dollar, higher yields
Gold prices fell over 1% after hitting a record high on Wednesday, as a stronger dollar and a rise in U.S.
Treasury yields countered support from safe-haven demand linked to the Nov. 5 U.S. election and Middle
East war. Spot gold was down 1% to $2,721.12 per ounce as of 12:25 p.m. EDT (1410 GMT) after hitting a
record high of $2,758.37 earlier in the session. U.S. gold futures fell 0.9% to $2,734.60. Bullion, considered a
hedge against political and economic uncertainty, has climbed more than 31% this year, shattering multiple
record peaks as the Federal Reserve’s interest rate cut last month combined with safe-haven demand set up
a perfect storm for the precious metal. - European Central Bank policymakers split on the need for jumbo rate cuts as growth concerns take over
Policymakers at the European Central Bank are split on the need to consider a jumbo half-point interest rate
cut in December, even as downside risks dominate on both economic growth and inflation. The comments
come shortly after the ECB delivered back-to-back interest rate cuts for the first time in 13 years at its
October meeting. Certainly 50 basis points can be on the table because we continue to be data dependent
and the data we are getting points in that direction, Portuguese central bank chief Mario Centeno told CNBC
on Wednesday. - Bank of Canada Cuts 50 Basis Points to stick the landing
The Bank of Canada stepped up the pace of interest-rate cuts and signaled that the post-pandemic era of
high inflation is over. Policymakers led by Governor Tiff Macklem lowered the benchmark overnight rate to
3.75% on Wednesday, the biggest reduction in borrowing costs since March 2020 during the early days of the
pandemic. - Fed’s Beige Book Shows Little Growth Across Most of US
Economic activity was flat in most parts of the US since early September, the Federal Reserve said in its Beige
Book survey of regional business contacts. More than half of the US central bank’s 12 districts reported slight
or modest growth in employment, while most districts said prices rose at a slight or modest pace, according
to the report published Wednesday in Washington. Multiple districts also noted slowing wage growth. - U.S., China trade tariffs escalating would be costly for everybody, IMF deputy director says
An escalation of trade and tariffs tensions between the U.S. and China would have economic consequences
around the world, Gita Gopinath, deputy managing director of the International Monetary Fund said. Output
is going to be much lower than what we are projecting for all countries in the world, there’s going to be
pressure on inflation, so that’s not the direction in which we should be going, she told CNBC. China has also
announced higher temporary tariffs on some imports from the U.S. as the tit-for-tat measures continue. - China and Russia’s profound ties will not change despite turbulent geopolitical landscape, Xi tells Putin
China and Russia’s profound relationship will not change despite the turbulence in global geopolitics, Chinese
President Xi Jinping told his counterpart Vladimir Putin at the opening of the BRICS summit in Kazan on
Tuesday. The world today is facing momentous transformations unseen in a century, resulting in a fast
changing and turbulent international landscape, Xi said, according to the English readout of the meeting. Yet I
am confident that the profound and lasting friendship between China and Russia will not change. - Modi and Xi agree to resolve differences, boost India-China ties
Chinese President Xi Jinping and Indian Prime Minister Narendra Modi agreed on Wednesday to boost
communication and cooperation between their countries and resolve conflicts to help improve ties that were
damaged by a deadly military clash in 2020. The two leaders met on the sidelines of the BRICS summit in
Russia for their first formal talks in five years, signaling that ties between the Asian giants have begun to
recover from the diplomatic rift caused by the clash along their disputed Himalayan frontier.
India and China, two of the world’s biggest economies, have maintained strong trade ties despite the
military and diplomatic tensions. The rapprochement is expected to boost Chinese investment in India.
India said the two leaders have directed their officials to take further steps to stabilize all aspects of bilateral
ties. - Boeing machinists reject new labor contract, extending more than 5-week strike
Boeing machinists walked off the job on Sept. 13 after overwhelmingly rejecting an earlier proposal. The
union voted 64% against the latest labor proposal, which included 35% raises, a $7,000 ratification bonus,
increased 401(k) contributions and other changes. Getting to a deal and ending the strike is new CEO Kelly
Ortberg’s priority, as Boeing will continue to burn cash through 2025. - Southwest and Elliott near settlement which would end proxy fight, source says
Southwest Airlines and Elliott Management are near a settlement which will stave off a proxy fight at the
carrier, a person familiar with the matter said. The deal will give Elliott a sizable representation on the
company’s board but would fall short of a majority. As recently as last week, Elliott and Southwest had shown
little indication they were doing anything but preparing for a fight. - Nvidia supplier SK Hynix posts record quarterly profit as AI boom drives demand
Operating profit for the third-quarter hit a record 7.03 trillion won ($5.08 billion), beating LSEG’s forecast of
6.8 trillion won and rebounding from a loss of 1.8 trillion won during the same period last year. The South
Korean chip giant has benefitted from a boom in artificial intelligence servers. - IBM shares are down 2.5% afterhours after the company reported underwhelming revenue in the third
quarter, hurt by a slowdown in consulting demand
Sales increased 1% to $15 billion in the period, slightly missing the average estimate. Results were weighed
down by a flat consulting business, which contributed $5.15 billion in revenue. Clients in that segment aren’t
expanding budgets, and some generative AI projects are coming at the expense of traditional consulting,
Chief Financial Officer Jim Kavanaugh said. They’re opting to spend cautiously due to ongoing uncertainty
about economic factors like interest rates and geopolitical tensions, he added. Everybody knows consulting is
an area which is under pressure right now, said Anurag Rana, an analyst at Bloomberg Intelligence. In recent
years, IBM has worked to transform itself from a conventional computer company into one focused on high
growth software and services. IBM has used acquisitions to expand its offerings, including a proposed
takeover of Hashicorp Inc. announced in April and last year’s purchase of Apptio for $4.6 billion. Bookings for
AI consulting and software have exceeded $3 billion since mid-2023, the company said. That is up from the
$2 billion IBM disclosed during its last quarterly earnings report in July. About 80% of the bookings come
from consulting, with the rest from software, the company said. - L’Oreal shares fell 2.5% after it posted disappointing sales last quarter as the beauty company suffered
from worsening consumer demand in China
Like-for-like sales in North Asia, which includes China, fell 6.5% in the third quarter, L’Oreal said. Analysts
had expected a gain. The decline marks the fifth straight quarter of falling sales in the region. In mainland
China, the beauty market, already negative in the second quarter, continued to deteriorate, impacted by low
consumer confidence, L’Oreal said. Hainan, a duty free destination for Chinese consumers, in particular
remained under pressure, L’Oreal said. In a call with analysts, Chief Executive Officer Nicolas Hieronimus said
he hopes the government stimulus will help boost local demand. L’Oreal’s dermatological beauty division
also grew well below estimates in the period. Hieronimus blamed the bad weather which hurt demand for
suncare products in general as well as a lack of product launches at its CeraVe label. - Deutsche Bank AG said it will have to set aside more money than expected for souring debt, the second
time this year it had to adjust its guidance
Germany’s largest lender reported a 42% increase in third-quarter profit, helped by gains at the investment
bank and in asset management. But lower revenue in the main lending units and a doubling of credit
provisions from a year ago weighed on the results. Deutsche Bank said it now expects provisions for credit
losses of about €1.8 billion for the full year, or roughly 38 basis points of its loan book. Earlier this year, it had
already raised its guidance to slightly above 30 basis points. Deutsche Bank shares fell 1.4%. Chief Executive
Officer Christian Sewing said the increase in souring loans was only temporary, and that provision for
commercial real estate were already coming down again. Sewing has vowed to improve profitability and
return more than €8 billion to shareholders over the medium term, building out fee businesses as the
tailwind from higher interest rates fades. - Apple shares fell 2.2% on Wednesday after a closely followed analyst said iPhone 16 orders were cut by
about 10 million units from the fourth quarter through the first half of 2025, citing an industry survey
Most of the cuts affected non-Pro models, Ming-Chi Kuo wrote in a Medium post. Some market participants
are optimistic that Apple Intelligence could dramatically boost iPhone shipments soon, the TF International
Securities analyst said. However, Apple’s recent order cuts suggest this optimistic expectation may not
materialize in the short term. - Coca-Cola Co. shares dropped 2.1% as investors weighed how much longer the soft-drink purveyor
could raise prices without getting customers to buy less of its beverages
While other food and beverage retailers have started to lower prices, Coca-Cola has continued to charge
more for its products. The company’s price mix, or the prices it charges across a range of products, increased
10% in the quarter. That buoyed revenues above analyst expectations, but consumers are increasingly
reticent to pay up, particularly for juices, waters and sports drinks. Sales volumes were down or flat across
most regions. The performance was an outlier for Coca-Cola, which usually counts on strong sales during
warm summer months. The war in the Middle East and bad weather in Mexico and India also contributed to
declining volumes, the company said. The company reported adjusted earnings per share of 77 cents during
the period, above the average estimate of 74 cents per share. - Qualcomm declined 3.8% after Bloomberg reported that chip designer Arm planned to cancel its license
agreement with the company. Shares of Arm were 6.7% lower
Arm has given Qualcomm a mandated 60-day notice of the cancellation of their so-called architectural license
agreement, according to a document seen by Bloomberg. The contract allows Qualcomm to create its own
chips based on standards owned by Arm. The showdown threatens to roil the smartphone and personal
computer markets, as well as disrupt the finances and operations of two of the most influential companies in
the semiconductor industry. Qualcomm sells hundreds of millions of processors annually, technology used in
the majority of Android smartphones. If the cancellation takes effect, the company might have to stop selling
products that account for much of its roughly $39 billion in revenue, or face claims for massive damages. The
move ratchets up a legal fight that began when Arm sued Qualcomm, one of its biggest customers, for breach
of contract and trademark infringement in 2022. With the cancellation notice, Arm is giving the US company
an eight-week period to remedy the dispute. The two are headed to a trial to resolve the breach-of-contract
claim by Arm and a countersuit by Qualcomm. The disagreement centers on Qualcomm’s 2021 acquisition of
another Arm licensee and a failure, according to Arm, to renegotiate contract terms. Qualcomm argues that
its existing agreement covers the activities of the company that it purchased, the chip-design startup Nuvia. - Tesla shares rose 12.1% afterhours on a blowout quarter for the EV maker, which notched its most
profitable results in more than a year
Third-quarter earnings were buoyed by sales of the Cybertruck, which turned a profit for the first time, its
energy-storage business and a spike in regulatory tax credits that other automakers pay to meet emissions
rules. But the stock was also bid up by hopes for the future: An ebullient Musk spent a long portion of
Wednesday’s call on a monologue that promised to make Tesla the most valuable company in the world,
starting with 20% to 30% delivery growth next year. The automaker projected slight growth in vehicle
deliveries for the full year. That will require a record-breaking fourth quarter to overcome the slump Tesla
saw in the first half of the year. Tesla said the Cybertruck, which it first delivered late last year, has been
boosted by increases in production. The company has not said how many trucks it has sold, but recalls show
the company has delivered at least 27,000 in the US. For the third quarter, Tesla reported adjusted earnings
of 72 cents per share, beating the average analyst estimate and snapping four consecutive quarters in which
the measure missed expectations. The company’s third-quarter automotive gross margin, excluding
regulatory credits, was 17.1%, beating analysts’ estimates and up from the previous quarter, when it was
14.6%.
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