Thursday, October 25, 2018
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What to watch today
With Wednesday’s losses, the Russell 2000 is now down about 5% this year while the Dow and S&P 500 both turned negative for the year while the Nasdaq is holding onto slight gains. What had been a solid year for investors for a long time has, in the space of just the last few weeks, turned into a middling year for equity investors at best. European markets are also trading lower.
On Thursday, the heavy earnings flow continues with Alphabet (GOOGL) , Amazon (AMZN) , Gilead (GILD), Chipotle (CMG), Merck (MRK), Twitter (TWTR), Altria (MO), Discover Financial (DFS), and Comcast (CMCSA) all reporting on Thursday. And on the economic data side, the September readings on durable goods orders and pending home sales, along with the weekly report on initial jobless claims, are expected to be released.
Tesla reports surprise profit, stock surges: Tesla reported its third-ever profit in its eight years as a public company. The electric car-maker blew past expectations for revenue and earnings, reporting adjusted EPS of $2.90 per share on revenue of $6.82 billion. This exceeded average analyst expectations of losses of 15 cents per share on revenue of $6.32 billion. Shares of Tesla jumped about 9.7% to $316.5 each as of 7:45 p.m. ET. [Yahoo Finance]
Bill Ackman’s Pershing Square buys Hilton stake: Activist investor William Ackman’s Pershing Square Capital Management has acquired a 3.7% stake in hotel operator Hilton Worldwide Holdings, the fund said on Thursday. Hilton shares hit a more than one year low on Thursday on concerns over a slowdown in the hotel industry. [Reuters]
Ad giant WPP stock plunges: Shares in WPP (WPP.L) crashed by as much as 21% on Thursday morning after the company cut its sales and profit forecasts. The drop wiped about $3.6 billion off WPP’s market capitalization, taking the stock to a six-year low. [Yahoo Finance UK]
Microsoft earnings beat expectations, stock jumps: Microsoft (MSFT) announced its Q1 2019 earnings on Wednesday, beating analysts’ projections. Its stock was up nearly 4% in after-hours trading. The tech giant reported earnings of $1.14 per share on $29.1 billion in revenue. Analysts predicted earnings of $0.96 per share on $27.9 billion in revenue. [Yahoo Finance]
AMD shares plummet after the chip giant gives weak guidance: Advanced Micro Devices (AMD) reported better-than-expected third quarter earnings, but the company released weak guidance. “For the fourth quarter of 2018, AMD expects revenue to be appropriately $1.45 billion, plus or minus $50 million, an increase of approximately 8 percent year-over-year,” the company said. [Yahoo Finance]
SEC won’t release promised ‘speed bump’ study: The Securities and Exchange Commission won’t release a study of the impact of brief delays in stock trading on market quality and pricing that investors have been expecting for two years. A spokesman for the SEC declined to share any of the study’s findings and said the agency has no “immediate plans to release it to the public” because it deems the report internal. [The Wall Street Journal]
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The Morning Brief provides a quick rundown on what to watch in the markets, top news stories, and the best of Yahoo Finance Originals.