- Dollar Weakens as US Polls Signal No Clear Leader: Markets Wrap
The dollar fell as investors walked back bets on Donald Trump winning the US presidential election after the
latest raft of polling data indicated no clear advantage for him. Oil rose after OPEC+ delayed a hike in output.
An index of the greenback dropped the most in over two months, with the US currency down against major
peers such as the yen, the euro and the Australian dollar. Treasury futures rose. - Dow closes nearly 300 points higher to begin November as investors shake off weak jobs report
Stocks rallied Friday to kick off November as Amazon led big technology stocks into the green and traders
looked past a disappointing jobs report. The Dow Jones Industrial Average gained 288.73 points, or 0.69%,
ending at 42,052.19. The S&P 500 advanced 0.41% to close at 5,728.80, and the Nasdaq Composite rose 0.8%
to 18,239.92. The major averages are wrapping up a choppy week. The S&P 500 lost 1.4% in the period, while
the Nasdaq slid 1.5%. Postearnings slumps in Microsoft and Meta Platforms weighed on the indexes. The 30
stock Dow inched down 0.2% week to date. The strong start to November comes after a difficult October for
the market. The 30-stock Dow pulled back 1.3% in October. The broad market index fell 1% in that time,
while the Nasdaq dropped 0.5%. - Oil prices rise by over $1 on OPEC+ output hike delay
Oil prices rose by more than $1 in early trading on Monday after OPEC+ said on Sunday it would delay a
planned December output hike by one month. Brent futures rose by $1.14 per barrel, or 1.56%, to $74.24 a
barrel. U.S. West Texas Intermediate crude also rose by $1.14 a barrel, or 1.64%, to $70.63. OPEC+, which
includes the Organization of the Petroleum Exporting Countries plus Russia and other allies, was due to
increase output by 180,000 barrels per day in December. - Gold edges lower as U.S. dollar, yields rise
Gold prices edged down on Friday, pressured by a stronger U.S. dollar and Treasury yields, but a weak job
growth data from the world’s biggest economy prompted analysts to increase bets for a rate cut from the
Federal Reserve, limiting some losses. Spot gold fell 0.2% to $2,736.28 per ounce. Prices fell 1.5% on
Thursday as some traders took profit after bullion hit a record high of $2,790.15. U.S. gold futures settled
largely steady at 2,749.2. Nonfarm payrolls increased by 12,000 jobs last month, the smallest gain since
December 2020, affected by disruptions from hurricanes and strikes by aerospace factory workers. - China’s Next Stimulus Package Is Unlikely to Put Market Fully at Ease
Chinese lawmakers are gathering in the shadow of the US election to sign off on a fiscal package that’s set to
run into the trillions of yuan yet is unlikely to put the market fully at ease. The stakes have grown for this
week’s conclave of the Standing Committee of the National People’s Congress, the executive body of the
nation’s top legislature, as it’s expected to round out China’s largest effort to lift growth since the pandemic.
The session in Beijing on Nov. 4-8 will probably unlock additional resources meant to take the pressure off
local governments and recapitalize major state lenders, according to banks such as Goldman Sachs Group Inc.
and HSBC Holdings Plc. - Fed and Peers Will Go Ahead With Rate Cuts After This Week’s US Election
The Federal Reserve and many rich-world peers are widely expected to lower interest rates again in the
coming week, right after a US presidential election that may not be decided yet. Central banks responsible for
more than a third of the global economy will set borrowing costs in the wake of the vote, clinging to
whatever certainties they can discern on the likely path of American policy for the next four years. - U.S. economy added just 12,000 jobs in October, impacted by hurricanes, Boeing strike
Job creation in October slowed to its weakest pace since late 2020 as the impacts of storms in the Southeast
and a significant labor impasse dented the employment picture. Nonfarm payrolls increased by 12,000 for
the month, down sharply from September and below the Dow Jones estimate for 100,000, the Bureau of
Labor Statistics reported Friday. In what had already been expected to be a downbeat report, October posted
the smallest gain since December 2020. The unemployment rate, however, held at 4.1%, in line with
expectations. A broader measure of unemployment that includes discouraged workers and those holding
part-time jobs for economic reasons also was unchanged at 7.7%. In the report narrative, the BLS noted that
the Boeing strike likely subtracted 44,000 jobs in the manufacturing sector, which lost 46,000 positions
overall. - China urges France to get EU to arrive at palatable EV trade solution
China has urged France to take on an active role to push the European Commission towards
a solution acceptable to both the European and Chinese electric vehicle industries, Beijing’s commerce
ministry said on Monday, citing its minister. Wang Wentao, in a meeting with French junior trade minister
Sophie Primas in Shanghai on Sunday, reiterated the European Union’s investigation into China’s EVs is a
major concern and has “seriously hindered” China-EU auto industry cooperation. The EU launched an anti
subsidy investigation into imports of Chinese-made battery EVs last year and in October voted for tariffs on
those vehicles. China in the past year has launched its own investigations into European pork and dairy, and
imposed temporary anti-dumping measures on imports of brandy from the EU early this month. - India central bank well-equipped for post-U.S. election volatility, Reuters reports
India’s central bank is well-equipped to deal with a potential sudden outflow of foreign funds and any steep
fall in the rupee if Republican candidate Donald Trump wins next week’s U.S. presidential election,
two sources familiar with the bank’s thinking said. The Reserve Bank of India would be able to tap its large
foreign exchange reserves to defend the domestic currency in the event of global market volatility and an
outflow of foreign funds, the sources said. They spoke on condition of anonymity because of the sensitivity of
the matter. - China’s Premier Li Qiang to speak at import expo in Shanghai
China’s Premier Li Qiang will deliver remarks at the opening ceremony of this week’s China International
Import Expo, the Chinese commerce ministry said on Sunday, as Beijing seeks to show the faltering economy
is open for business. Leaders from Malaysia, Uzbekistan, Slovakia, Kazakhstan, Mongolia and Serbia are
among those expected for the opening ceremony and other events at the seventh import expo, which runs
from Tuesday to Saturday in Shanghai, the foreign ministry said. Launched by President Xi Jinping in 2018, the
expo this year is an opportunity to showcase China’s opening up and reform agenda, as the world’s second
largest economy faces growing global trade barriers and domestic challenges. - Iran Vows a strong and complex Attack on Israel, WSJ Says
Iran is planning a counterattack on Israel involving more powerful warheads and other weapons, the Wall
Street Journal reported, citing Iranian and Arab officials briefed on the plans. Iran isn’t planning to limit its
response to missiles and drones, the Journal said Sunday, citing the officials. The newspaper noted it remains
to be seen whether the threats are real. - Exxon Mobil Corp. and Chevron Corp. beat analysts’ profit, output and sales estimates as rising oil
production from the Permian Basin helped offset weaker crude prices
Exxon’s third-quarter adjusted earnings exceeded expectations by a nickel on Friday, while Chevron
surpassed estimates by 11 cents. The strong results underpinned the companies’ commitments to continue
rewarding investors with hefty buybacks and payouts. Exxon shares initially rose, but ended 1.6% lower
whilst Chevron finished up 2.9%. Exxon increased dividends for the 42nd consecutive year to 99 cents a
share, higher than the 97-cent Bloomberg Dividend Projection. Exxon was able to fully fund dividend payouts
and share repurchases with cash flow without resorting to debt, Chief Financial Officer Kathy Mikells said.
The company also has a $27 billion cash pile and a net-debt-to-capital ratio of just 5%, leaving it in a strong
position ahead of any oil-market downturn, she said. Exxon’s fast-growing oil developments in Guyana and
the Permian Basin are producing crude for less than $35 a barrel at a time when a barrel fetches more than
$70, and Exxon is working on several gas-export projects in Texas, Papua New Guinea and Mozambique. It’s
now the biggest producer in the Permian region after its $60 billion acquisition of Pioneer Natural Resources
Co. earlier this year. - Boeing’s shares rose 3.5% after union leaders endorsed the latest offer to boost wages, spurring
optimism that the company could finally be close to ending a lengthy strike that’s crippling its jetliner
manufacturing
The planemaker’s fourth proposal for a four-year contract would raise pay by 38%, give hourly workers a
$12,000 signing bonus upon ratification and boost contributions to retirement savings plans. It would not
restore pensions, a point of contention for some veteran employees. Leaders of the International Association
of Machinists and Aerospace Workers urged 33,000 striking members to approve the pact, which will be put
to a vote on Nov. 4. And they offered a blunt warning: Holding out for more would risk losing gains made
through weeks of collective bargaining. In every negotiation and strike, there is a point where we have
extracted everything that we can in bargaining and by withholding our labor, the union said . We are at that
point now and risk a regressive or lesser offer in the future. The terms should be enough to win a majority of
votes needed to ratify the new contract, RBC Capital Markets analyst Ken Herbert said, citing conversations
he had with IAM members staffing Seattle-area picket lines earlier this week. The strike is also squeezing
Boeing’s suppliers, risking Boeing’s eventual recovery the longer it goes on, he said. - Atlassian shares soared 19% after the enterprise software developer forecast revenue for its fiscal
second quarter ahead of expectations and also beat first-quarter adjusted earnings consensus
FIRST QUARTER RESULTS: Adjusted EPS 77c vs. 65c y/y, estimate 65c. Revenue $1.19 billion, +21% y/y,
estimate $1.15 billion. Subscription revenue $1.13 billion, +33% y/y, estimate $1.1 billion. Cloud revenue
$792.3 million, +31% y/y, estimate $769.2 million. Adjusted gross margin 84%, estimate 83.5%. Adjusted
operating margin 23%, estimate 19.1%. SECOND QUARTER FORECAST: Sees revenue $1.23 billion to $1.24
billion, estimate $1.23 billion. Sees adjusted operating margin 21%, estimate 21.3%. Sees adjusted gross
margin 84%, estimate 83.6%. 2025 YEAR FORECAST: Sees revenue +16.5% to +17%. Sees adjusted gross
margin 83.5%, estimate 83.5%. Sees adjusted operating margin 22% to 22.5%, estimate 21.7%. KeyBanc
Capital Markets (upgrades to overweight from sector weight): We feel better that guidance is appropriately
set to facilitate a more consistent beat/raise cadence, analyst Jason Celino writes. The cloud beat was
impressive, Celino adds, noting it was mostly driven by better-than-expected paid seat expansions as well as
migration activity. Celino sees several catalysts to accelerating growth beyond FY25, including higher-than
typical cloud pricing increases. Establishes PT of $260. - Cardinal Health shares rose 7% after the health-care distributor boosted its adjusted earnings per share
guidance for the full year and its first-quarter results topped estimates
FIRST QUARTER RESULTS: Adjusted EPS $1.88 vs. $1.73 y/y, estimate $1.62. Adjusted operating income $625
million, +9.5% y/y, estimate $552.7 million. Revenue $52.28 billion, -4.5% y/y, estimate $50.89 billion.
Pharmaceutical and Healthcare Products Revenue $47.99 billion, estimate $46.7 billion. Global Medical
Products and Distribution revenue $3.12 billion, estimate $3.68 billion. 2025 YEAR FORECAST: Sees adjusted
EPS $7.75 to $7.90, saw $7.55 to $7.70, estimate $7.63. COMMENTARY AND CONTEXT: 2025 guidance
includes an update to the company’s Pharmaceutical and Specialty Solutions segment profit outlook to 4% to
6% growth, from 1% to 3% growth. TD Cowen, Charles Rhyee (hold, PT $116): We’re encouraged by the solid
beat and by CAH’s FY25 Pharma segment profit guidance raise. Notes strong Pharma growth drove the EPS
beat. We view this performance as a positive read-through for MCK & COR. - Charter Communications Inc. shares rallied 11.9% after the cable and internet giant reported losing
fewer broadband subscribers than analysts expected in the third quarter despite the end of a federal
internet subsidy program
The company reported 113,000 fewer home broadband internet customers in the three months ending Sept.
30, beating estimates for a loss of 248,000. Charter had been the most vulnerable to the end of the
government’s Affordable Connectivity Program, which offered subsidized internet access during the
pandemic. The company had about 5 million such subscribers, according to Bloomberg Intelligence. The
program ended in April. Charter is fighting competition from Verizon Communications Inc. and T-Mobile US
Inc., which are siphoning off home internet subscribers, and an industry-wide shift among consumers from
pay-TV to streaming. The traditional cable and telecom businesses are both moving toward a convergence
model, where they can offer internet, mobile phone and content packages to subscribers. Broadband losses
for cable providers like Charter and Comcast Corp. are likely to begin leveling off next year alongside slowing
growth for fixed wireless service offered by the telecom giants. At the same time, Charter and Comcast have
found success in selling their own mobile plans to customers. Charter added 545,000 new mobile lines in the
quarter and Comcast reported 319,000 new wireless customers on Thursday. - A.P. Moller-Maersk A/S expects disruptions to global trade from the Red Sea conflict to last well into
next year, according to its chief executive officer
The reopening of the Suez Canal is one of the big unknowns, Maersk CEO Vincent Clerc said, after the
company published its third-quarter earnings report. Maersk, a bellwether for global trade, controls roughly
one-sixth of all the goods carried in containers at sea. The company has raised its 2024 profit outlook four
times in the last six months, due to stronger demand and better-than-expected freight rates. Those are
caused by the Red Sea conflict as ships take the longer route around Africa, reducing excess capacity. Still, the
CEO said it’s too soon to reintroduce share buybacks suspended in February when vessel overcapacity
threatened to undermine freight rates. He did pledge that Maersk would pay out significant dividend on
these earnings next year. Maersk shares rose 4%.
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