market wrap
stock:
European stocks were in the red on Wednesday as investors digested some key economic data and corporate earnings.
Germany and Spain posted better-than-expected growth, but concerns remain about the eurozone's outlook in key sectors such as manufacturing.
On the earnings front, Volkswagen's after-tax profit fell sharply in the third quarter, but UBS's profit exceeded expectations.
Traders on Wednesday will be looking forward to the return of the UK budget and US results.
US market:
Stock futures rose after Alphabet's earnings beat expectations and investors took note of reports from Microsoft and Metaplatform.
In addition, companies such as Caterpillar and Eli Lilly are scheduled to announce their financial results, and attention will also be focused on preliminary GDP figures for the third quarter.
Foreign exchange:
The euro rose to a one-week high against the dollar on better-than-expected inflation data from Spain and better-than-expected economic growth data from Spain and France.
ING said the dollar could strengthen if economic growth data for the third quarter is strong.
The data could indicate strong momentum in the economy ahead of the Fed's decision to cut interest rates by 50 basis points in September, it said, adding that Fed policymakers will be cautious about future rate cut plans. .
Economists surveyed by the Wall Street Journal expect the U.S. economy to grow at an annual rate of 3.1% in the third quarter.
The pound then fell as investors became cautious ahead of Britain's Labor government's first budget.
ING said the currency's negative risks are likely related to announcements regarding additional gold supplies in the 2024-2025 financial year.
The paper predicts that Chancellor of the Exchequer Rachel Reeves will likely “tread cautiously” and that the pound will move little on the Budget.
Bonds:
U.S. Treasury yields fell slightly, but Metzler said a “smashing Republican victory” in next week's elections could push bond yields up by 15 to 25 basis points.
“However, the market is currently anticipating most of the expected moves, so a volatile sideways move could occur if Trump actually wins the election.”
This means that the move will initially continue again before stronger profit-taking begins.
Commerzbank Research said the euro zone government bond market will focus on indicative economic data following the recent selloff.
Commerzbank added that while the recent decline in oil prices signals downside risks, market pricing in the European Central Bank's interest rate cuts has already been ahead of inflation in recent trading.
Energy:
Crude oil prices rose slightly, supported by reports that US crude oil inventories had unexpectedly fallen, but a decline in the geopolitical risk premium and weak fundamentals weighed on the market.
U.S. crude inventories fell by 0.57 million barrels last week, sending a positive signal about demand in the world's largest oil consumer, according to a report citing figures from the American Petroleum Institute ahead of official EIA data.
Oil benchmarks remain at a one-month low as concerns about supply disruptions in the Middle East recede and market focus shifts to a weaker demand outlook and the prospect of oversupply next year.
metal:
Gold futures rose after hitting a new high in early trading.
Commonwealth Bank of Australia said the new highs reflected demand for safe assets driven by uncertainty surrounding the presidential election, and was likely also influenced by the growing likelihood of a Donald Trump victory. Ta.
The CBA added that President Trump's plan increases the risk of policy disruption, geopolitical tensions and rising US debt, further increasing the appeal of gold as a safe-haven asset.
CBA expected gold prices to average $2,800 per ounce through the fourth quarter of 2024, rising to an average of $3,000 per ounce by the fourth quarter of 2025.
OCBC Global Markets Research said the rally in precious metals continues as markets continue to price in the presidential election risk premium.
OCBC added that in the betting market, the spread between Trump and Harris continues to widen in Trump's favor.
“It brings back concerns about tariffs, inflation and fiscal concerns.”
Defensive positions such as long gold “could still gain traction in the short term given the fluidity of electoral developments and geopolitical uncertainty.”
EMEA headlines
Puig stock soars after earnings beat expectations
Puig Brands shares soared after the Spanish beauty company reported better-than-expected sales in the third quarter, driven by strong performance in its key fragrance and fashion divisions and a recovery in cosmetics.
The company, which owns brands such as Jean Paul Gaultier and Nina Ricci, reported revenue of 1.26 billion euros ($1.36 billion) in the period, up about 11% from a year earlier on a reported basis. This figure exceeded Visible Alpha's consensus forecast of 1.17 billion euros.
Orsted sells stake in UK wind farm to Brookfield for approximately $2.3 billion
Denmark's Orsted has announced the sale of a minority stake in four UK offshore wind farms to Canadian asset manager Brookfield in a deal valued at £1.745 billion ($2.27 billion). The struggling wind energy giant is aiming to improve its financial position by selling assets. .
The renewable energy company announced on Wednesday that Brookfield, its institutional partner and publicly listed affiliate Brookfield Renewables, have announced that Brookfield, its institutional partner and publicly traded affiliate Brookfield Renewables, will invest in the Hornsea 1 and 2 wind farms in the North Sea and the Walney Extension and Varbo Bank Extension wind farms in the Irish Sea. announced that it would acquire a 12.45% stake. .
GSK increases profits from HIV and cancer treatments, but sales fall due to weak demand for vaccines in the US
GSK's new HIV and cancer drugs boosted profits in the third quarter, beating analysts' expectations, even as vaccine sales fell due to weak demand in the U.S.
The British pharmaceutical giant said on Wednesday third-quarter sales fell 2% to 8.01 billion pounds ($10.43 billion), in line with analysts' expectations of 8.0 billion pounds, according to a consensus compiled by the company. announced. On a constant currency basis, sales increased 2%.
Standard Chartered profits beat expectations, raises guidance
Standard Chartered posted a better-than-expected quarterly net profit, raised its full-year operating profit forecast and promised higher shareholder returns.
The London-based bank on Wednesday reported net profit of $931 million for the three months to September, higher than the $857.5 million expected in a Visible Alpha survey of analysts. Ta.
Glencore maintains guidance after continued increase in metals production
After reporting its strongest quarter of the year, Glencore reiterated its full-year production targets while keeping its marketing division's profit forecast unchanged at up to $3.5 billion.
The world's largest mining company by revenue said Wednesday that copper production in the third quarter was 242,600 tonnes, down 2% from the same period last year but up 8.8% from the second quarter.
BASF warns of hitting lower end of profit outlook after missing out on profits
BASF warned that full-year profit would remain at the lower end of its outlook after third-quarter profit fell short of expectations, but the decline in prices and slowing volume growth clouding the chemicals sector. , we expect this year's results to be hit. Final quarter.
The German chemical giant said on Wednesday that its earnings before interest, taxes, depreciation and special items (a key metric it recommends) were within the previous guidance range of 8.0 billion to 8.6 billion euros (equivalent to $8.66). ) announced that it is expected to be at the lower limit of $1 billion – $9.3 billion.
global news
AXA Investment expects capital to flow to European credit markets amid US uncertainty
TOKYO — As political uncertainty clouds the U.S. policy outlook ahead of the presidential election, more money will flow into European assets and out of U.S. assets, particularly into corporate bonds, says AXA Investment・Managers said:
Marion Le Morhedec, global head of fixed income for investment management at French insurer AXA, said the company had neutralized its risk exposure to the United States as the Nov. 5 presidential election approaches. Ta.
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(Ended) Dow Jones News
10-30-24 0702ET
