Fri, 25 Oct 04:09 PM EST/09:09 PM GMT
Trading commenced this week amid continued uncertainty around Brexit and anxiety surrounding the onslaught of corporate earnings reports. Ultimately though, it was reports of steady progress on the US China trade front that pushed indices back towards all-time highs. Last Saturday the UK parliament backed a move that was intended to delay any Brexit deal approval. The supporters of the bill got their wish when on Tuesday MPs rejected PM Johnson’s accelerated timetable, forcing the government to call for a general election. Cable drifted lower throughout the week as the possibility of a ‘no deal’ Brexit at the end of the month continues to loom. A third of the S&P 500 reported Q3 results and many firms offered up cautious outlooks, citing well known macro factors, but investors in many cases seemed willing to look past the current environment, at least for the time being. Many of those same participants were rewarded on Friday when the White House reported continued headway during a scheduled call between the trade principles Lighthizer, Mnuchin and Vice Premier Liu. Notably, the reports of a constructive tone came in the wake of another hawkish speech from VP Pence on Thursday. For the week, the S&P gained 1.2%, coming within a point of all-time highs, while the DJIA added 0.7% and the Nasdaq rose 1.9%.
A raft of earnings took center stage on the corporate news front this week. Amazon’s earnings fell for the first time in over two years as one-day shipping costs exceeded expectations. Intel shares lifted after posting a beat on its top and bottom line and raising guidance. Boeing remained under pressure amid downgrades and an even uglier quarter than expected. Caterpillar missed analyst expectations and cut its outlook, citing flat demand and rising inventories. Biogen surged after it resubmitted a long-thought-dead Alzheimer’s drug, claiming that new analysis showed that aducanumab reduced decline in patients with early onset of the disease. In the sportswear space, both Under Armor and Nike announced CEO transitions. Texas Instruments’ revenue miss and underwhelming guidance hit its stock and the overall chip sector. Chipotle beat but tweaked its new restaurant openings lower as it launches drive-thru offerings at some locations. Tesla shorts got burned by a surprise quarterly profit and quicker than anticipated progression at its Shanghai factory. New California wildfires weighed on PG&E and EIX as the spotlight of blame remains on electric transmission equipment.
MON 10/21
SAP.DE Reports Q3 EPS €1.30 v €1.14 y/y; Op €2.09B v €1.74B y/y; Rev €6.81B v €6.03B y/y
941.HK Reports 9M (CNY) Net 81.8B v 92.1B y/y; EBITDA 225.5B v 214.1B y/y; Rev 566.7B v 567.7B y/y
TEVA Confirms settlement of Track 1 opioid cases in Ohio, and confirms agreement on global framework to settle remaining litigation under which it would pay up to $250M in cash over 10 years and donate up to $23B of treatments for opioid addiction
TUES 10/22
UBSG.CH Reports Q3 Net $1.05B v $1.0Be, Rev $7.13B v $7.37B y/y
BIIB New data show aducanumab reduced clinical decline in patients with early Alzheimer’s disease; Plans to submit BLA with Eisai in early 2020
PG Reports Q1 $1.36 v $1.24e, Rev $17.8B v $17.5Be
UPS Reports Q3 $2.07 v $2.06e, Rev $18.3B v $18.3Be
*(US) OCT RICHMOND FED MANUFACTURING INDEX: +8 V -7E
*(UK) PARLIAMENT REJECTS 'PROGRAMME MOTION' FOR ACCELERATED BREXIT BILL VOTING BY 308-322 MARGIN
TXN Reports Q3 $1.49 v $1.41e, Rev $3.77B v $3.81Be
SNAP Reports Q3 -$0.04 v -$0.05e, Rev $446.2M v $438Me
WHR Reports Q3 $3.97 v $3.96e, Rev $5.10B v $5.15Be
(CN) Chinese govt reportedly considering plans to replace Hong Kong Leader Lam with interim Chief Executive - FT
(HK) Hong Kong Leaders office declines to comment on report that Chief Exec Carrie Lam would be replaced
WEDS 10/23
HEIA.NL Reports prelim 9M Net €1.67B v €1.60B y/y; Q3 Organic Beer volume +2.3% v +2.3%e
CAT Reports Q3 $2.66 v $2.83e, Rev $12.8B v $13.4Be
BA Reports Q3 $1.45 v $2.04e, Rev $20.0B v $19.3Be; cuts monthly 787 production rate to 12 for ~2 yrs beginning in late 2020 (prior 14/month)
(US) Pres Trump: Turkey has said it is stopping combat and will make Syria ceasefire permanent; US will remove sanctions on Turkey
(US) New York Fed: overnight repo operations will increase to at least $120B (prior $75B) starting Thursday, October 24, 2019; term repo operations to increase to at least $45B (prior $35B)
MSFT Reports Q1 $1.38 v $1.25e, Rev $33.1B v $32.2Be
CP Reports Q3 C$4.61 v C$4.46e, Rev C$1.98B v C$1.96Be
TSLA Reports Q3 +$1.86 v -$0.15e, Rev $6.30B v $6.52Be
*(KR) SOUTH KOREA Q3 PRELIMINARY GDP Q/Q: 0.4% V 0.5%E; Y/Y: 2.0% V 2.0%E
THURS 10/24
NOKIA.FI Reports Q3 non-IFRS Net €0.05 v €0.05e, Rev €5.69B v €5.67Be; Cuts FY19 and FY20 guidance on margin pressure and additional 5G investments and additional digitalization investments
AZN.UK Reports Q3 Core EPS $0.99 v $0.71, Rev $6.41B v $6.20Be
*(FR) FRANCE OCT PRELIMINARY MANUFACTURING PMI: 50.5 V 50.2E (3rd consecutive month of expansion)
*(EU) EURO ZONE OCT PRELIMINARY MANUFACTURING PMI: 45.7 V 46.0E (9th straight contraction)
MMM Reports Q3 $2.58 v $2.47e, Rev $7.99B v $8.10Be
(EU) White House Adviser Navarro: Phase 1 of US-China trade agreement adopts "virtually entire chapter" from May agreement on intellectual property - financial press
*(US) SEPT PRELIMINARY DURABLE GOODS ORDERS: -1.1% V -0.7%E; DURABLES (EX-TRANSPORTATION): -0.3% V -0.2%E
*(EU) ECB LEAVES MAIN 7-DAY REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED; maintains forward guidance outlook
(EU) ECB's Draghi: Incoming data indicates more protracted weakness and prominent downside risk; inflation pressures remain muted - Prepared Remarks
(EU) ECB's Draghi: Assessment of negative rate environment has been positive but monitoring potential side effects- Q&A
*(US) OCT PRELIMINARY MARKIT MANUFACTURING PMI: 51.5 V 50.9E (6-month high)
*(UK) UK GOVT TO TABLE MOTION FOR GENERAL ELECTION ON DEC 12TH - SKY NEWS
*(US) SEPT NEW HOME SALES: 701K V 702KE
(US) VP Pence: if China ends unfair trade, US is ready for a new future; US is not seeking to contain China's development
AMZN Reports Q3 $4.23 v $4.46e, Rev $70.0B v $68.4Be
V Reports Q4 $1.47 v $1.43e, Rev $6.10B v $6.08Be; raises dividend by 20% to $0.30 from $0.25 (indicated yield 0.68%)
(JP) Japan Investors Net Buying of Foreign Bonds: +¥536.1B v +¥1.06T prior week; Foreign Net Buying of Japan Stocks: +¥522.3B v +¥508.1B prior week
FRI 10/25
ABI.BE Reports Q3 adj $0.94 v $1.06e, adj EBITDA $5.29B v $5.52Be, Rev $13.2B v $12.92B y/y
*(DE) GERMANY OCT IFO BUSINESS CLIMATE: 94.6 V 94.5E; CURRENT ASSESSMENT: 97.8 V 98.0E
3328.HK Reports Q3 (CNY) Net 17.4B v 16.5B y/y, NII 36.3B v 34.5B y/y
*(US) OCT FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 95.5 V 96.0E
(US) Weekly Baker Hughes Rig Count 830 v 851 w/w (-2.5% w/w)
GM Automotive News projects tentative UAW-GM agreement will be ratified
A raft of earnings took center stage on the corporate news front this week. Amazon’s earnings fell for the first time in over two years as one-day shipping costs exceeded expectations. Intel shares lifted after posting a beat on its top and bottom line and raising guidance. Boeing remained under pressure amid downgrades and an even uglier quarter than expected. Caterpillar missed analyst expectations and cut its outlook, citing flat demand and rising inventories. Biogen surged after it resubmitted a long-thought-dead Alzheimer’s drug, claiming that new analysis showed that aducanumab reduced decline in patients with early onset of the disease. In the sportswear space, both Under Armor and Nike announced CEO transitions. Texas Instruments’ revenue miss and underwhelming guidance hit its stock and the overall chip sector. Chipotle beat but tweaked its new restaurant openings lower as it launches drive-thru offerings at some locations. Tesla shorts got burned by a surprise quarterly profit and quicker than anticipated progression at its Shanghai factory. New California wildfires weighed on PG&E and EIX as the spotlight of blame remains on electric transmission equipment.
MON 10/21
SAP.DE Reports Q3 EPS €1.30 v €1.14 y/y; Op €2.09B v €1.74B y/y; Rev €6.81B v €6.03B y/y
941.HK Reports 9M (CNY) Net 81.8B v 92.1B y/y; EBITDA 225.5B v 214.1B y/y; Rev 566.7B v 567.7B y/y
TEVA Confirms settlement of Track 1 opioid cases in Ohio, and confirms agreement on global framework to settle remaining litigation under which it would pay up to $250M in cash over 10 years and donate up to $23B of treatments for opioid addiction
TUES 10/22
UBSG.CH Reports Q3 Net $1.05B v $1.0Be, Rev $7.13B v $7.37B y/y
BIIB New data show aducanumab reduced clinical decline in patients with early Alzheimer’s disease; Plans to submit BLA with Eisai in early 2020
PG Reports Q1 $1.36 v $1.24e, Rev $17.8B v $17.5Be
UPS Reports Q3 $2.07 v $2.06e, Rev $18.3B v $18.3Be
*(US) OCT RICHMOND FED MANUFACTURING INDEX: +8 V -7E
*(UK) PARLIAMENT REJECTS 'PROGRAMME MOTION' FOR ACCELERATED BREXIT BILL VOTING BY 308-322 MARGIN
TXN Reports Q3 $1.49 v $1.41e, Rev $3.77B v $3.81Be
SNAP Reports Q3 -$0.04 v -$0.05e, Rev $446.2M v $438Me
WHR Reports Q3 $3.97 v $3.96e, Rev $5.10B v $5.15Be
(CN) Chinese govt reportedly considering plans to replace Hong Kong Leader Lam with interim Chief Executive - FT
(HK) Hong Kong Leaders office declines to comment on report that Chief Exec Carrie Lam would be replaced
WEDS 10/23
HEIA.NL Reports prelim 9M Net €1.67B v €1.60B y/y; Q3 Organic Beer volume +2.3% v +2.3%e
CAT Reports Q3 $2.66 v $2.83e, Rev $12.8B v $13.4Be
BA Reports Q3 $1.45 v $2.04e, Rev $20.0B v $19.3Be; cuts monthly 787 production rate to 12 for ~2 yrs beginning in late 2020 (prior 14/month)
(US) Pres Trump: Turkey has said it is stopping combat and will make Syria ceasefire permanent; US will remove sanctions on Turkey
(US) New York Fed: overnight repo operations will increase to at least $120B (prior $75B) starting Thursday, October 24, 2019; term repo operations to increase to at least $45B (prior $35B)
MSFT Reports Q1 $1.38 v $1.25e, Rev $33.1B v $32.2Be
CP Reports Q3 C$4.61 v C$4.46e, Rev C$1.98B v C$1.96Be
TSLA Reports Q3 +$1.86 v -$0.15e, Rev $6.30B v $6.52Be
*(KR) SOUTH KOREA Q3 PRELIMINARY GDP Q/Q: 0.4% V 0.5%E; Y/Y: 2.0% V 2.0%E
THURS 10/24
NOKIA.FI Reports Q3 non-IFRS Net €0.05 v €0.05e, Rev €5.69B v €5.67Be; Cuts FY19 and FY20 guidance on margin pressure and additional 5G investments and additional digitalization investments
AZN.UK Reports Q3 Core EPS $0.99 v $0.71, Rev $6.41B v $6.20Be
*(FR) FRANCE OCT PRELIMINARY MANUFACTURING PMI: 50.5 V 50.2E (3rd consecutive month of expansion)
*(EU) EURO ZONE OCT PRELIMINARY MANUFACTURING PMI: 45.7 V 46.0E (9th straight contraction)
MMM Reports Q3 $2.58 v $2.47e, Rev $7.99B v $8.10Be
(EU) White House Adviser Navarro: Phase 1 of US-China trade agreement adopts "virtually entire chapter" from May agreement on intellectual property - financial press
*(US) SEPT PRELIMINARY DURABLE GOODS ORDERS: -1.1% V -0.7%E; DURABLES (EX-TRANSPORTATION): -0.3% V -0.2%E
*(EU) ECB LEAVES MAIN 7-DAY REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED; maintains forward guidance outlook
(EU) ECB's Draghi: Incoming data indicates more protracted weakness and prominent downside risk; inflation pressures remain muted - Prepared Remarks
(EU) ECB's Draghi: Assessment of negative rate environment has been positive but monitoring potential side effects- Q&A
*(US) OCT PRELIMINARY MARKIT MANUFACTURING PMI: 51.5 V 50.9E (6-month high)
*(UK) UK GOVT TO TABLE MOTION FOR GENERAL ELECTION ON DEC 12TH - SKY NEWS
*(US) SEPT NEW HOME SALES: 701K V 702KE
(US) VP Pence: if China ends unfair trade, US is ready for a new future; US is not seeking to contain China's development
AMZN Reports Q3 $4.23 v $4.46e, Rev $70.0B v $68.4Be
V Reports Q4 $1.47 v $1.43e, Rev $6.10B v $6.08Be; raises dividend by 20% to $0.30 from $0.25 (indicated yield 0.68%)
(JP) Japan Investors Net Buying of Foreign Bonds: +¥536.1B v +¥1.06T prior week; Foreign Net Buying of Japan Stocks: +¥522.3B v +¥508.1B prior week
FRI 10/25
ABI.BE Reports Q3 adj $0.94 v $1.06e, adj EBITDA $5.29B v $5.52Be, Rev $13.2B v $12.92B y/y
*(DE) GERMANY OCT IFO BUSINESS CLIMATE: 94.6 V 94.5E; CURRENT ASSESSMENT: 97.8 V 98.0E
3328.HK Reports Q3 (CNY) Net 17.4B v 16.5B y/y, NII 36.3B v 34.5B y/y
*(US) OCT FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 95.5 V 96.0E
(US) Weekly Baker Hughes Rig Count 830 v 851 w/w (-2.5% w/w)
GM Automotive News projects tentative UAW-GM agreement will be ratified
