Economy shows no change, hiring and prices up, Fed report says
The U.S. economy showed “little or no change” over the past six weeks, the Federal Reserve reported Wednesday in its Beige Book report.
Spending was described as “mixed” while prices increased “at a modest pace,” the report said. Companies said they expect inflation to continue rising, thought at a slower pace.
On employment, most areas saw “slight to moderate increases” as firms hired “less urgently.” More broadly, respondents expected economic growth ahead to be “stable or having slightly weaker growth.”
—Jeff Cox
Consumer staples and energy stocks buck S&P 500 downturn
Consumer staples and energy stocks were able to sidestep the S&P 500′s leg down on Wednesday.
Energy climbed 1% in the session, while consumer staples added 0.6%. The other nine sectors traded lower, dragging the broad index down 0.7%.
Valero Energy and Phillips 66 led the energy sector up with gains of more than 2% each. The consumer staples sector was aided by Procter & Gamble‘s advance of more than 2% on the back of earnings.
— Alex Harring
Stocks making the biggest movers midday: United Airlines, Nvidia and more
These are the stocks making the biggest moves during midday trading:
Read the full list of stocks moving here.
— Samantha Subin
Netflix and Tesla tumble as investors brace for earnings
Shares of Netflix and Tesla slid in Wednesday’s session as traders readied for earnings expected after the bell.
Streaming giant Tesla dropped nearly 2% in the session, while electric vehicle maker Tesla retreated by more than 3%.
— Alex Harring
Regional bank stocks slide
Regional bank stocks and ETFs extended their losses in late morning trading.
Rising yields were one of the factors that put pressure on regional bank stocks this spring, contributing to the collapse of Silicon Valley Bank.
— Jesse Pound
Key Treasury yields rise, pressuring equities
U.S. Treasury yields rose on Wednesday, with the 10-year hitting a fresh multiyear high. The move up pressured stocks.
The 10-year Treasury yield was up by nearly 7 basis points to 4.911%, putting it above 4.9% for the first time since 2007. Meanwhile, the 2-year Treasury yield was climbed almost 2 basis points to 5.231%, hovering around levels last seen in 2006.
Also of the note, the 5-year Treasury touched as high as 4.937%, its top level since 2007.
Yields and prices move in opposite directions and one basis point equals 0.01%.
— Alex Harring, Sophie Kiderlin
Thomas Peterffy says brokerage clients are ‘by far not fully invested’
Interactive Brokers CEO Thomas Peterffy told “Squawk Box” that his firm’s customers have been holding back from putting their money in the stock market.
“They are by far not fully invested, and many people are short,” Peterffy said.
The brokerage CEO also said that stock trading volumes have been going down for several quarters, but that has been offset by the rise in options trading, including zero-day options.
Shares of Interactive Brokers were down 4% in premarket trading despite strong headline numbers for the company’s third-quarter results. The brokerage reported $1.55 in adjusted earnings per share on $1.14 billion of adjusted revenue. Analysts surveyed by LSEG, formerly Refinitiv, were expected $1.51 per share and $1.11 billion of revenue.
— Jesse Pound
Chipmakers fall for a second session after U.S. curbs China exports
United Airlines, J.B. Hunt lead industrials’ losses
The industrials sector led the S&P 500’s losses Wednesday, with United Airlines and J.B. Hunt Transport Services leading the sector’s downturn.
Both companies fell on disappointing quarterly earnings results. United fell 8%, while J.B. Hunt declined 6.3%. American Airlines saw the third-largest losses in the sector, losing more than 5% ahead of its earnings announcement Thursday before the bell.
— Hakyung Kim
Gold prices rise 1% to highest level in nearly a month
Gold prices rose more than 1% on Wednesday to trade near their highest level since Sept. 20.
U.S. gold futures were last up 1.1% to trade at $1,957.5, while silver gained 1.4% to trade near its highest level since Sept. 29.
The move in gold prices came as recent events in the Middle East heightened fears of an escalation in the Israel-Hamas conflict.
— Samantha Subin
Morgan Stanley headed for worst day in more than three years
Stocks open lower
Stocks opened Tuesday’s session down.
The Dow was down 0.1% shortly after 9:30 a.m. ET. The S&P 500 slid 0.4%, while the Nasdaq Composite shed 0.7%.
— Alex Harring
ASML is a top pick despite mixed third-quarter results, Bank of America says
Bank of America is confident in semiconductor equipment maker ASML Holding as a long-term play despite the company’s mixed earnings report, naming the stock a top pick and reiterating a buy rating.
The Dutch technology firm reported slightly weaker-than-expected net sales for third quarter and a net profit that was about in line with an LSEG consensus forecast. Still, ASML reaffirmed its guidance for net sales to increase 30% year on year for 2023.
Shares dipped 2.1% in early morning trading. CNBC Pro subscribers can read here for more on the upgrade.
— Pia Singh
Housing starts less than expected, permits top outlook
Housing starts accelerated in September, though at a slower than expected pace, while building permits fell, but by less than expected, the Commerce Department reported Wednesday.
Private owned starts totaled a seasonally adjusted 1.358 million for the month, up 7% from August but below the Dow Jones estimate for 1.37 million. Starts were down 7.2% from a year ago.
At the same time, permits totaled 1.473 million, 4.4% below the August level but ahead of the forecast for 1.45 million. Permits were off 7.2% from September 2022.
—Jeff Cox
See the stocks moving before the bell
These are some of the stocks making the biggest moves in premarket trading on Wednesday:
- Citizens Financial Group — The regional bank lost 3.7% after its third quarter results missed both top and bottom lines.
- United Airlines — The airline stock slid more than 5% after the company released soft guidance for its fourth-quarter earnings.
- Interactive Brokers — Shares of the trading platform fell 3.8% in premarket trading even though the company’s earnings report was stronger than was anticipated by analysts.
See the full list here.
— Alex Harring, Lisa Kailai Han
Gold miners ETF rises as metals notch October highs
The VanEck Gold Miners ETF (GDX) rose more than 1% in premarket trading as gold and silver hit new highs for the month.
With the advance, the ETF is on track for its fourth straight winning session. The leg up comes as prices for gold and silver hit levels not seen since September on Wednesday.
— Alex Harring, Gina Francolla
Morgan Stanley slides as investors analyze earnings report
Shares of Morgan Stanley fell about 3% before the bell as traders parsed the financial giant’s third-quarter earnings release.
Morgan Stanley beat the consensus forecasts of analysts polled by LSEG, formerly known as Refinitiv, on both lines. The bank reported $1.38 in earnings per share, topping the expectation of $1.28 per share. Revenue also topped estimates, coming in at $13.27 billion against a $13.23 billion forecast.
Morgan Stanley was the latest of several banks to report earnings in recent days.
— Alex Harring, Hugh Son
Procter & Gamble rises on expectation-beating earnings
Procter & Gamble advanced more than 1% in premarket trading after the consumer packaged goods company posted a better quarterly report than Wall Street expected.
The company reported $1.83 in earnings per share and $21.87 billion in revenue. Meanwhile, analysts polled by LSEG, formerly known as Refinitiv, had forecasted $1.72 earned per share and $21.58 billion in revenue.
— Alex Harring
Fed’s Harker says rates may stay at current levels
Philadelphia Federal Reserve President Patrick Harker, a voting member in the central bank’s policymaking committee for 2023, said rates are at a level where further increases may not be needed.
“This is a time where we just sit for a little bit. It may be for an extended period; it may not. But let’s see how things evolve over the next few months,” Harker told The Wall Street Journal. He added that while recent data points to economic strength, contact with individual businesses indicates “things seem to be slowing down.”
— Fred Imbert
Country Garden says it is unable to meet its offshore debt obligations: Reuters
Chinese property developer Country Garden Holdings has said it does not expect to be able to meet all of its offshore debt obligations, Reuters reported.
This comes as the grace period for a $15 million bond coupon payment expired on Wednesday, which meant that the company has likely defaulted on its offshore debt.
In a statement to Reuters, the company said that it hopes to seek a holistic solution to resolve its existing difficulties.
Last week, the developer warned that it expects it will not be able to make all of its offshore repayments, including those issued in U.S. dollar notes.
Asia chip stocks mostly inch down after new U.S. restrictions on AI chip exports to China
Asian chipmaker and related stocks were mostly down on Wednesday, after the U.S. announced new restrictions on exports of artificial intelligence chips to China.
Shares of chip manufacturing giant Taiwan Semiconductor Manufacturing Corp slipped as much as 1.27%, while counterpart Hon Hai Precision Industry — also known as Foxconn — inched down 0.47%.
On the other hand, shares of domestic Chinese chipmaker SMIC spiked by as much as 4.62%, although it later pared gains to trade 2.43% higher. Counterpart Hua Hong Semiconductor lost 0.41%.
— Lim Hui Jie
China September retail sales rise, urban unemployment at near two-year low
China’s retail sales rose in September, while the urban unemployment rate cooled to a near two-year low according to data from the Chinese government.
Retail sales rose 5.5% last month, against an estimated 4.9% rise according to economists polled by Reuters.
Urban unemployment stood at 5% in September, its lowest level since November 2021, down from a prior reading of 5.2% in August.
Overall, China’s third-quarter economic growth was stronger than expected, boosting hopes that the world’s second-largest economy will meet Beijing’s annual target this year.
— Shreyashi Sanyal
China economy grows 4.9% in third quarter, beating expectations
China’s economy grew 4.9% year-on-year in the third quarter, higher than the 4.4% expansion that was expected from economists polled by Reuters.
However, this figure was lower than the 6.3% year-on-year expansion seen in the second quarter.
Read the full story here.
— Lim Hui Jie
Alan Schwartz says, with balance sheets strong and PE pushed away, corporates are ready to return to M&A
Large corporations have strong balance sheets and are ready to return to the merger and acquisition market now that private equity investors have been pushed aside as interest costs have risen, Guggenheim Partners executive chairman Alan Schwartz said Tuesday on CNBC’s “Squawk Box.”
“Now they’re seeing the chance to come back in, right, because they kept their balance sheets strong,” the former Bear Stearns CEO said. “At the same time, the macro environment, especially geopolitical and all these other things, you know, creates concerns in the boardroom as to whether now’s the time, or wait on some of these things.”
Guggenheim advises lots of C-suite executives, and “what we’re saying is we saw a big drop in M&A activity, right, when the capital markets tied up for a lot of the private deals, but now you’re seeing a lot of, let’s say, discussions and activity beginning clearly picking up from the corporate side that are seeing their opportunity to come in. But you know, how many of those will get across the line?”
— Scott Schnipper
Interactive Brokers, J.B. Hunt among stocks moving the most after the bell
These are some of the companies making the most significant moves in extended trading:
- Interactive Brokers Group — Shares of the electronic broker dropped more than 4% in after-hours trading. Interactive Brokers posted third-quarter adjusted earnings of $1.55 per share on adjusted revenue of $1.14 billion.
- J.B. Hunt Transport Services — The transportation and logistics stock lost 3.6% after reporting third-quarter results that fell short of Wall Street’s expectations.
- Omnicom Group — The marketing company’s shares slipped 1.4%, even as the company narrowly beat analysts’ expectations in the latest quarterly report.
Read the full list of companies moving here.
— Samantha Subin
United Airlines falls on soft guidance
Shares of United Airlines dropped nearly 5% in extended trading after it warned that warning that elevated fuel costs and a halt in Tel Aviv flights amid the Israel-Hamas war would hit current-quarter profits.
The company said it expects adjusted earnings to range between $1.50 and $1.80 per share, versus the $2.06 per share expected by analysts polled by LSEG, formerly known as Refinitiv.
Despite the after-hour moves, United Airlines topped Wall Street’s expectations for the recent quarter. The airline reported adjusted earnings of $3.65 per share on $14.48 billion in revenue. That topped the EPS of $3.35 and $14.44 billion anticipated by analysts.
United Airlines falls on weak guidance
— Samantha Subin, Leslie Josephs