- Yen Weakens on Japanese Vote Result, Oil Tumbles: Markets Wrap
The yen fell after Japan’s ruling coalition failed to win a majority in parliament, stoking speculation the political uncertainty would impact the central bank’s rate-hike policy. Crude slumps after Israeli strikes on Iran avoided oil facilities. The Japanese currency fell as much as 1% to 153.88 per dollar Monday, the weakest level in about three months, after a gamble by Prime Minister Shigeru Ishiba to call a snap election backfired. The weaker yen, which benefits the nation’s export-oriented economy, helped push the Topix index up by as much as 1.6%. - Nasdaq rises to hit new all-time high Friday as rest of market languishes
The Nasdaq Composite climbed to an all-time high on Friday, boosted by mega cap tech stocks. The tech-heavy index rose 0.56% to 18,518.61, while the S&P 500 inched 0.03% lower to end at 5,808.12. The Dow Jones Industrial Average shed 259.96 points, or 0.61%, to close at 42,114.40. Tech stocks boosted the market ahead of their upcoming earnings. Nvidia added 0.8%, and shares of Meta Platforms, Amazon and Microsoft were also higher. On the quarterly results front, HCA Healthcare lost nearly 9% after reporting hurricane disruptions hit its earnings and full-year guidance, while Colgate-Palmolive shares shed 4% after the company reduced the low end of its sales estimate for the year. - Gold slips as dollar firms; market eyes crucial U.S. data
Gold prices fell on Monday as the U.S. dollar held firm, while investors awaited U.S. economic data for fresh insights on the Federal Reserve’s monetary policy path. Spot gold fell 0.5% to $2,733.01 per ounce, as of 0232 GMT.U.S. gold futures declined 0.3% to $2,745.5. The dollar index gained 0.2%, on track for its best month since April 2022. - Boeing Plans Over $15 Billion Capital Hike as Soon as Monday
Boeing Plans Over $15 Billion Capital Raise as Soon as Monday. Boeing Co. is planning to launch a capital hike as early as Monday, according to people familiar with the matter, in an offering that would help the beleaguered airplane maker boost its liquidity. - BlackRock wants to talk about retirement. Climate, not so much
More than two years after BlackRock ran into a buzz saw of criticism from US conservatives over its advocacy for sustainable investing, the world’s largest money manager is attempting to change the subject. BlackRock has been advertising its work on retirement in high-profile American political and financial newsletters, including campaigns this month in Semafor and the Financial Times’ sister publication Ignites. The group has also been talking extensively about its plans for Global Infrastructure Partners, the alternative asset manager that it purchased for $12.5bn earlier this year. - These Analysts Missed Netflix’s $250 Billion Rally: Screentime
Non-baseball fans are likely tired of hearing me talk about the game. But a battle between the sport’s two most famous franchises, the Yankees and Dodgers, has become a proper pop culture moment. World Series tickets are selling for as much as $20,000. TV ratings are at their highest in seven years. The excitement validates the free spending approach of the teams, which have two of the largest payrolls in baseball. And Friday night… holy crap. On Monday’s episode of The Town, Matt Belloni and I talked about whether Netflix is overrated, underrated or properly rated by Wall Street investors. That’s also the subject of this week’s newsletter, in which I spoke with the few analysts who think Netflix is overvalued. - UFC CEO Dana White wants to fix the sport’s ranking system, and has asked Mark Zuckerberg for help.
UFC CEO Dana White wants to change the sport’s ranking system. White said he talked to Mark Zuckerberg about how artificial intelligence could help. Zuckerberg has shared his passion for MMA online. - France’s Absent Public Workers Face Benefits Cut In Savings Blitz
France’s government said Sunday that state workers behind a massive rise in absenteeism will be targeted as it desperately seeks billions of euros in budget savings. Facing European Union pressure to slash spending, but similar heat from domestic parties over the planned penny-pinching, the minority conservative government set out another five billion euros ($5.4 billion) in proposed cuts on Sunday. It has already warned that more than 3,000 public jobs will have to be lost and also indicated that those taking increasing sick leave will also have to feel the budget pain. - Sanofi profit rose on demand for seasonal vaccines and further growth in its blockbuster skin and asthma therapy Dupixent.
Earnings per share excluding some items reached €2.86 in the third quarter, Sanofi said Friday. That exceeded analysts’ estimates, helped by its influenza and respiratory syncytial virus shots, which saw earlier-than-anticipated sales. The drugmaker this week raised its annual profit forecast whilst announcing exclusive negotiations with US buyout firm Clayton Dubilier & Rice for the sale of its consumer health unit.
Sanofi shares rose 2.5%. - Mercedes shares fell 1.4% after the German carmaker reported what RBC called “severely depressed” third-quarter results due to China weakness. Still, analysts say the beat on free cash flow is supportive of capital returns.
THIRD QUARTER RESULTS: Sales EU34.53 billion, -6.7% y/y, estimate EU36.25 billion. Ebit EU2.52 billion, -48% y/y, estimate EU2.56 billion. Net income EU1.72 billion, -54% y/y, estimate EU2.5 billion. Industrial free cash flow EU2.39 billion, +1.8% y/y. COMMENTARY AND CONTEXT: Group outlook on EBIT and Free Cash Flow remains in line with Sept. 19 update. “The 3Q results do not meet our ambitions. Nonetheless Mercedes-Benz continues to generate solid cash flows even in challenging times. - HCA Healthcare shares slumped 8.9% after the hospital owner reported earnings per share for the third quarter that fell short of expectations. The company also said it expects its full-year results to likely be in the lower half of the ranges provided due to two major hurricanes.
THIRD QUARTER RESULTS: EPS $4.88 vs. $3.91 y/y, estimate $5.01. Net income $1.27 billion. Revenue $17.49 billion, +7.9% y/y, estimate $17.53 billion. Adjusted Ebitda $3.27 billion, +13% y/y, estimate $3.27 billion. Number of hospitals 187, +2.2% y/y, estimate 188.11. Licensed beds 49,890, +1.2% y/y, estimate 49,818. YEAR FORECAST: Sees capital expenditure $5 billion, saw $5.1 billion to $5.3 billion. Still sees EPS $21.60 to $22.80. Still sees revenue $69.75 billion to $71.75 billion. Still sees adjusted Ebitda $13.75 billion to $14.25 billion. - Colgate-Palmolive shares fell 4.1% as an unexpected decline in North America organic sales overshadowed sales strength in other areas. Analysts are more positive on the consumer products maker’s volume growth, which they say is stronger than most peers’ results.
THIRD QUARTER RESULTS: Adjusted EPS 91c vs. 86c y/y, estimate 88c. Net sales $5.03 billion, +2.4% y/y, estimate $5.01 billion. Organic sales +6.8%, estimate +6.35%. Pricing +3.1%, estimate +3.28%. Adjusted gross margin 61.3% vs. 58.6% y/y, estimate 60.7%. YEAR FORECAST: Sees organic sales +7% to +8%, estimate +7.82%. Sees net sales +3% to +5%. - Digital Realty shares rose 9.6% after the data center REIT delivered third-quarter results that topped expectations and provided narrowed funds from operations guidance for the full year that beat the average analyst estimate.
THIRD QUARTER RESULTS: Core FFO per share $1.67 vs. $1.62 y/y, estimate $1.66. Operating revenue $1.43 billion, +2.1% y/y, estimate $1.43 billion. Adjusted Ebitda $758.3 million, +11% y/y, estimate $710.8 million. Net operating income $757.4 million, +6.6% y/y, estimate $757.9 million.
YEAR FORECAST: Sees Core FFO per share $6.65 to $6.75, saw $6.60 to $6.75, estimate $6.63. Sees total revenue $5.55 billion to $5.60 billion, saw $5.55 billion to $5.65 billion, estimate $5.58 billion. Sees adjusted Ebitda $2.93 billion to $2.98 billion, saw $2.80 billion to $2.90 billion, estimate $2.86 billion. - L3Harris Technologies shares climbed 3.5% after the defense company boosted the low ends of its revenue and profit forecasts for the full year.
THIRD QUARTER RESULTS: Adjusted EPS $3.34, estimate $3.25. Revenue $5.29 billion, estimate $5.28 billion. Adjusted Ebit $833 million, estimate $810.5 million. Adjusted Ebit margin 15.7%, estimate 16.7%. Adjusted free cash flow $728 million. YEAR FORECAST: Sees adjusted EPS $12.95 to $13.15, saw $12.85 to $13.15, estimate $13.03. Sees revenue $21.1 billion to $21.3 billion, saw $21.0 billion to $21.3 billion, estimate $21.25 billion. Still sees adjusted free cash flow about $2.2 billion, estimate $2.16 billion. - Booz Allen Hamilton climbed 9.2% after the defense contractor boosted its year profit and revenue forecast.
Fiscal second-quarter revenue and profit also beat estimates. The quarter’s Ebitda margin amounted to 11.6%, better than the consensus number of 10.9%. SECOND QUARTER RESULTS: Revenue $3.15 billion, +18% y/y, estimate $2.96 billion. Adjusted EPS $1.81 vs. $1.29 y/y, estimate $1.47. Backlog $41.25 billion, +18% y/y. Adjusted Ebitda $364.0 million, +25% y/y, estimate $321.3 million. Adjusted Ebitda margin 11.6% vs. 10.9% y/y, estimate 10.9%.2025 YEAR FORECAST: Sees adjusted EPS $6.10 to $6.30, saw $5.80 to $6.05, estimate $5.99. Sees revenue +11% to +13%, saw +8% to +11%. Sees adjusted Ebitda $1.30 billion to $1.33 billion, saw $1.26 billion to $1.30 billion, estimate $1.29 billion. - Oil slumps 5% as Israel limits Iran strike to military targets
Oil tumbled more than 5% in early Asian trading after Israeli strikes on Iran over the weekend avoided the Opec member’s crude facilities. Brent slumped below US$73 a barrel and West Texas Intermediate sunk near US$68. Israeli fighter planes struck military targets across Iran on Saturday, delivering on a vow to retaliate for a missile barrage at the start of the month, though the attack was more restrained than many had expected. - Britain’s Labor government to deliver debut Budget this week, settling weeks of uncertainty
U.K. Finance Minister Rachel Reeves will deliver the government’s hotly awaited debut budget on Wednesday, putting to bed weeks of uncertainty over potential tax hikes and spending cuts. Labour has repeatedly ruled out increases to income tax, National Insurance social security payments, value-added tax (a sales levy) and corporation tax. Changes to employer taxes, inheritance tax, capital gains tax, and a freeze on personal income tax thresholds remain on the table. - An Indian Pharma Firm Is Sending Nvidia Chips to Russia at War
Occupying the top three floors of an unremarkable office building in northern Mumbai, there’s little to distinguish Shreya Life Sciences from the many other commercial businesses that keep the Andheri neighborhood of India’s largest metropolis humming throughout the day. But this inconspicuous pharmaceutical company is part of a lucrative trade in leading-edge technology to Russia that has the US and its European allies worried at India’s burgeoning role as an intermediary in the sales. - Olympus shares drop over 5% after CEO resigns over drug allegation
Shares of Japanese camera giant Olympus Corp fell on Monday after the company announced the resignation of its chief executive officer over a drug allegation. In a notice, Olympus said that it received an allegation that the German national, Stefan Kaufmann, had purchased illegal drugs. “Olympus, in consultation with outside legal counsel, immediately investigated the facts, made a report to the investigative authorities, and cooperated fully with their investigation,” the company said. - Japan’s Shigeru Ishiba suggests he intends to stay on as PM after ruling coalition loses majority
It is the first time since 2009 that the Liberal Democratic Party has lost its parliamentary majority.
Japanese Prime Minister Shigeru Ishiba on Monday signaled that he intends to continue running the government after suffering loses in the snap election.
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