The stock market shows a positive start today, with the S&P 500 futures rising 24 points, Nasdaq 100 futures up 170 points, and Dow Jones Industrial Average futures increasing by 30 points.
Investors are optimistic following a wave of earnings reports. Taiwan Semiconductor Manufacturing (TSM, Financial) is seeing a significant pre-market rise due to impressive earnings and guidance. Other semiconductor stocks are also doing well in early trading. Travelers (TRV), a Dow component, is another strong performer with positive earnings results.
Today's schedule includes an ECB policy announcement at 8:15 ET and the release of September Retail Sales data for the US at 8:30 ET. Weekly jobless claims will also be available at 8:30 ET.
The 10-year Treasury yield has risen by one basis point to 4.03%, while the 2-year yield has also increased by one basis point to 3.95%.
Today's News
In September, U.S. retail sales exceeded expectations with a 0.4% month-over-month increase to $714.4 billion, surpassing the 0.3% consensus. Core retail sales, excluding motor vehicles and parts, rose 0.5% month-over-month, beating the 0.1% consensus. The most significant monthly gains were seen in miscellaneous store retailers with a 4.0% increase. Nonstore retailers' sales surged 7.1% year-over-year, while food and drinking places saw a 3.7% increase. This strong performance indicates robust consumer spending, which could positively impact retailers like Amazon (AMZN, Financial) and Walmart (WMT, Financial).
Taiwan Semiconductor (TSM, Financial) experienced an 8% jump in premarket trading after reporting third-quarter results that exceeded expectations, driven by high demand for AI chips. The company's net revenue grew 36% year-over-year to $23.50 billion, with high-performance computing representing 51% of net revenue. This positive performance also lifted other chipmakers like Nvidia (NVDA, Financial) and AMD (AMD, Financial) in premarket trading.
Mexico is in discussions with industrial giants such as General Motors (GM, Financial), Foxconn, and Intel (INTC, Financial) to boost local manufacturing, aiming to reduce imports from Asia. GM and Foxconn are expected to announce plans to shift production to Mexico, while Intel plans to manufacture 12% of its products locally. This move could significantly impact the automotive and tech manufacturing sectors within Mexico.
Initial jobless claims for the week ended October 12 fell by 19,000 to 241,000, aligning with consensus expectations. The four-week moving average of initial claims rose slightly to 236,250. Despite the increase in the moving average, the decline in weekly claims suggests a stable labor market, which could be favorable for companies like Truist Financial (TFC) with significant exposure to the U.S. economy.
The European Central Bank cut its policy rates by 25 basis points, marking its third rate cut of the year. The ECB aims to bring inflation back to its 2% medium-term target. The annual inflation rate in the Euro Area was revised to 1.7% in September. This monetary policy adjustment could impact European financial institutions and multinational companies operating in the region.
AbbVie (ABBV, Financial) received FDA approval for Vyalev, a new treatment for advanced Parkinson's disease. This approval marks the first subcutaneous 24-hour infusion of levodopa-based therapy, offering improved motor symptom control. The approval could boost AbbVie's neurological treatment portfolio and strengthen its market position in the healthcare sector.
Shares of Elevance Health (ELV, Financial) dropped 12% after the company lowered its full-year earnings forecast due to higher-than-expected medical expenses. The health insurer reported third-quarter revenue growth of 5.2% year-over-year, driven by higher premium yields, but faced challenges with its Medicaid business. This announcement follows UnitedHealth's (UNH) recent earnings beat, highlighting cost concerns in the insurance sector.
Lucid Group (LCID, Financial) announced a securities offering, aiming to raise approximately $1.67 billion through the sale of common stock and a private placement. Ayar Third Investment Company, Lucid's majority stockholder, plans to maintain its 58.8% ownership through the private placement. The capital raised will support Lucid's growth initiatives and operational expansion.
Meta Platforms (META, Financial) initiated layoffs across several divisions, including WhatsApp and Instagram, as part of broader cost-cutting measures. Although the layoffs are relatively small, they reflect Meta's ongoing efforts to align resources with strategic goals. This move follows significant workforce reductions at Meta since late 2022.
GuruFocus Stock Analysis
- Parnassus Mid Cap Growth Fund's 3rd-quarter Commentary: A Look Back by James Li
- Stock Market Update: Dow Climbs Over 250 Points Amid Mixed Earnings Reactions by Nauman Khan
- Mistral AI Introduces Edge AI Models Focused on Privacy, Powered by Microsoft by Muslim Farooque
- Trump Media Shares Plunge 10% Amid Volatile Trading and Temporary Halt on Nasdaq by Nauman Khan
- Vale Achieves Six-Year High in Iron Ore Output, Copper and Nickel Production Also Climb by Muslim Farooque
