Welcome to the weekly market review. This section is dedicated to providing Moomoo CAB members with this week's key investment highlights and insights, as well as a preview of the major events that will have an impact on the market in the coming week.
Macro trends
Powell: A strong economy may need more restraints, but the bond market is helping
Federal Reserve Chairman Powell said on Thursday that due to the strength of the US economy and the tight labor market, stricter borrowing conditions may be needed to control inflation. However, he also acknowledged that rising market interest rates may reduce the need for the central bank to act on its own.
US retail sales grew stronger than expected in September
According to data released by the US Department of Commerce on Tuesday, the increase in retail sales in the US in September was higher than expected. This widespread growth shows that household demand for durable products remains strong as the third quarter comes to an end. Unadjusted retail purchases increased 0.7% in September. If gasoline is excluded, sales volume still increased by 0.7% in September.
Second-hand housing sales in the US fell 2.0% month-on-month in September
In September 2023, second-hand housing sales in the US fell 2% month-on-month to seasonally adjusted annualized 3.96 million units, the lowest since October 2010. However, this result was still slightly higher than market expectations of 3.89 million units. This decline is consistent with other economic data published during the same period, as soaring mortgage interest rates not only continued to discourage first-time buyers, but also prevented homeowners from selling properties locked in at lower mortgage rates.
China's GDP growth in the third quarter shows that economic recovery is gaining momentum
China's economy grew faster than expected in the third quarter, and consumption and industrial activity unexpectedly rose in September, indicating that a series of recent policies and measures are helping to support the initial recovery.
Funding trends
Soaring bond yields are currently the biggest problem in the stock market
US Treasury yields continued to rise, with 10-year US Treasury yields reaching 5% for the first time since 2007, and the stock market declined as a result. Although judging from market history, the stock market should rebound before the end of the year, the continued sell-off in the bond market may damage the strong performance of the stock market so far this year.
Company news
Netflix subscribers rose to a record 247 million
According to FactSet data, in the three months ending September 30, Netflix's revenue was 8.54 billion US dollars and earnings per share were 3.73 billion US dollars, higher than what analysts generally predicted by analysts of 8.54 billion US dollars and 3.49 US dollars. The company reported a net increase of 9 million paying subscribers, exceeding expectations of 6.08 million, bringing its global paying user base to 247.2 million.
Tesla stock falls, profit falls short of expectations
Tesla announced that adjusted profit for the quarter was 2.3 billion US dollars, or 66 cents per share, down 37% from the same period last year, the lowest profit in two years. Analysts at Refinitiv (Refinitiv) had previously expected the company's earnings to slow, but they still expect its earnings per share to reach 73 cents. The company's third-quarter revenue was $23.4 billion, up 9% from the same period last year, but fell short of analysts' expectations of $24.1 billion. In the face of increasingly fierce competition for electric vehicles from established car manufacturers, Tesla has been lowering car prices several times to boost sales demand.
Profit and sales exceeded expectations after P&G raised prices
Despite increasing pressure on consumer budgets, P&G has been able to successfully drive up prices and continues to double its bets on new product innovations. The company achieved effective sales growth across all product categories, and its healthcare business grew 10%, driven by demand for Crest toothpaste and brighteners.
Johnson & Johnson Announces Earnings Report and Raises Expectations
Johnson & Johnson (Johnson & Johnson) announced on Tuesday that adjusted earnings and revenue exceeded Wall Street expectations and raised full-year expectations due to a sharp increase in sales in the company's pharmaceutical and medical device businesses.
Bank of America's profit exceeded expectations, and interest income hit a ten-year high
Bank of America (Bank of America)'s third-quarter profit exceeded Wall Street expectations. The bank's loan interest payments are lucrative, while also benefiting from better-than-expected performance in the investment banking and trading business.
Lucid's third-quarter electric vehicle deliveries fell short of expectations
Luxury electric vehicle manufacturer Lucid Group said on Tuesday it delivered 1,457 Air sedans to customers in the third quarter. Analysts surveyed by FactSet had anticipated Lucid would deliver around 2,000 vehicles in the third quarter. By the end of the second quarter, Lucid had $6.25 billion in available working capital, including $5.5 billion in cash and remaining available credit lines, which Chief Financial Officer Sherry House said at the time was sufficient to fund the company through 2025.
Goldman Sachs profits fell 33% in the third quarter, and trading and investment banking remained stagnant
The bank said profit fell 33% from the same period last year to $2,058 million, or $5.47 per share. Revenue also fell 1% to $11.82 billion, although it was about $600 million higher than expected. Among its larger banking peers, Goldman Sachs is the bank that is most dependent on investment banks and transaction revenue. The company faced resistance this year as mergers and acquisitions, IPOs, and bond issues were curtailed as the Federal Reserve raised interest rates to slow economic growth.
oneWeekly Key Economic Data
