Pre-market market trends
1. On October 25 (Tuesday) U.S. stock Before the market, the three major U.S. stock index futures fell. As of press time, Dow futures fell 0.47%, S&P 500 index futures fell 0.35%, and Nasdaq futures fell 0.13%.
2. As of press time, Germany DAX index fell 0.88%, the UK FTSE 100 index fell 0.63%, France CAC40 index rose 0.32%, and the European Stoke 50 index fell 0.26%.
3. As of press time, WTI crude oil fell 1.02% to US$83.72 per barrel. Brent crude oil fell 0.90% to $90.39 per barrel.
Market News
Yelen : The US Treasury Department may repurchase certain US Treasury bonds. US Treasury Secretary Yellen hinted that there is a possibility of repurchasing certain U.S. government bonds. Earlier, the U.S. Treasury Department asked market participants about the possibility of this move improving market liquidity. Yellen answered reporters on Monday: "This is something that 'other governments' do from time to time. I don't think it will be the main intervention tool we will use - but it's conceivable that we can do something in this regard." In addition, Yellen also acknowledged that the transaction volume of 20-year U.S. Treasury bonds is relatively insufficient. She said: "20-year Treasury bonds are a less liquid area, but we have not made any decisions on this." In recent years, the U.S. Treasury bond market has shown insufficient liquidity, which means it is more difficult to buy and sell certain securities, especially larger securities. She said that treasury transactions are still "strong", but past pressures highlight the "importance of strengthening resilience".
Economist: Fed 11 hikes interest rates again in November 375 basis points, and interest rate hikes were suspended when inflation was halved. economists predict that the Fed will raise interest rates for the fourth consecutive 75 basis points at its meeting on November 2, to 3.75%-4.00%. The Fed should not pause interest rate hikes until inflation falls around half of its current level. Furthermore, the most radical tightening cycle in decades presents greater recession risks. Economists predict that the median probability of the United States falling into a recession within a year is 65%, which is higher than the previous 45%. Most economists expect the Fed to raise interest rates by 50 basis points in December, and by the end of 2022, the federal funds rate will rise to 4.25%-4.50%. This is consistent with the Fed's median dot chart prediction. More than half of the economists surveyed expect federal funds rates to peak at 4.50%-4.75% or higher in the first quarter of 2023. The risk of the final interest rate is biased towards upward.
EU today discusses the price ceiling, and the meeting focuses on the price of natural gas used for power generation. Some EU countries are pushing to put price caps on natural gas used for power generation, while EU implementing agencies warn that any such measures need to avoid stimulating demand or providing electricity subsidies to foreign consumers. According to people familiar with the matter, the European Commission issued the above warning before the important energy ministerial meeting local time on Tuesday. The person familiar with the matter also said that the EU implementing agency is recommending that such price restrictions in EU member states must be extended to electricity importers such as the UK or Switzerland in order to work. Another option is that EU member states will have to export electricity at prices higher than domestic trade, which is prohibited by many international agreements with partners, people familiar with the matter said. The European Commission conveys the organization's views in a document summarizing the costs and benefits of such price caps.
Japan's ultra-long-term Treasury bond yield turned from a multi-year high, and Japanese officials said that loose policies and foreign exchange interventions are not contradictory. Japanese Finance Minister Shunichi Suzuki said on Tuesday that the Bank of Japan's monetary easing policy aims to achieve a sustained and stable rise in prices, including wage growth, while the Japanese Finance Ministry's monetary intervention policy is to deal with excessive fluctuations in the foreign exchange market. These policies have different goals and are therefore not contradictory. He added that the Bank of Japan's policy aims to achieve price stability, rather than targeting exchange rate . The Bank of Japan is expected to keep ultra-low interest rates unchanged at its policy meeting on Friday to support a fragile economy, even at the cost of accelerating the yen to a 32-year low. In response, some investors have been selling overdue bonds, betting that the Bank of Japan will change its ultra-loose policy.However, Japan's ultra-long-term Treasury yields turned down Tuesday after hitting multi-year highs as investors bought bonds after a sharp sell-off.
Sunak was elected the new Prime Minister of the United Kingdom. On October 25th local time, Rich Sunak, who had just been elected as the leader of the British Conservative Party, accepted the official appointment of King Charles III of the British at Buckingham Palace, and became the new British Prime Minister. After obtaining the authorization of King Charles III, Sunak will start the process of forming a new cabinet. New Prime Minister Sunak may be a safe choice for the British economy, and while the former Goldman Sachs banker is about to end the extreme market volatility of Tras during his brief term in Downing Street , Sunak's more cautious fiscal policy is unlikely to bring direct relief to stock declines focused on the UK domestic market. British Phnom Penh bonds rose on Monday after Sunak were elected as new prime minister, indicating that market confidence could be rebuilt under Sunak. But any policy action will be closely watched by markets that have lost confidence in the government and are highly sensitive to fiscal changes.
IEA Executive Director: The world is in the first real global energy crisis. Fatih Birol, executive director of the International Energy Agency (IEA), said that the tightening of the global liquefied natural gas (LNG) market and the reduction of supply from major oil producers have put the world in "the first real global energy crisis." Birol said the increase in European LNG imports during the Ukrainian crisis and the possible rebound in demand for fuel in China will put the market tight as only 20 billion cubic meters of new LNG capacity will enter the market next year. Meanwhile, OPEC+ recently decided to cut production by 2 million barrels a day, a "risk" decision, as the IEA expects global oil demand to grow by nearly 2 million barrels this year. Birol also said that the current energy crisis may be a turning point in energy history, as this crisis may accelerate the use of clean energy and form a sustainable and secure energy system.
stocks news
UBS (UBS.US) Q3 net profit exceeded expectations of US$1.733 billion, and investment bank pre-tax operating profit fell by 47% year-on-year. UBS's total revenue in the third quarter was US$8.236 billion, compared with US$9.115 billion in the same period last year, a year-on-year decrease of 10%; pre-tax operating profit was US$2.323 billion, compared with US$2.865 billion in the same period last year, a year-on-year decrease of 19%; net profit attributable to shareholders was US$1.733 billion, better than the market expectations of US$1.57 billion, compared with US$2.279 billion in the same period last year, a year-on-year decrease of 24%; diluted earnings per share was US$0.52, compared with US$0.63 in the same period last year. UBS expects that the amount of stock repurchase in the whole year of 2022 will reach US$5.5 billion.
SAP(SAP.US)Q3 total revenue increased by 5% year-on-year, and the revenue of cloud business exceeded market expectations. SAP's total revenue in the third quarter was 7.841 billion url , a year-on-year increase of 5% (the following year-on-year growth or decline is fixed exchange rate), analysts' estimates of Bloomberg statistics are 7.6 billion euros; basic and diluted earnings per share are 0.57 euros, compared with 1.19 euros in the same period last year; operating profit was 1.239 billion euros, a year-on-year decrease of 1%; after-tax profit in the third quarter was 547 million euros, compared with 1.418 billion euros in the same period last year. Looking ahead, SAP's forecast range for the full-year non-IFRS operating profit is 7.6 billion euros to 7.9 billion euros, and in July, the forecast range was reduced to 7.8 billion euros to 8.25 billion euros. SAP reiterates its revenue outlook for cloud business in 2022, with a forecast range of 11.55 billion euros to 11.85 billion euros. SAP lowered its forecast for free cash flow this year from above 4.5 billion euros to 4.5 billion euros.
Novartis Pharmaceuticals (NVS.US) Q3 revenue decreased by 4% year-on-year, while Biogen (BIIB.US) Q3 revenue was US$2.51 billion. Novartis Pharmaceuticals' Q3 revenue fell 4% year-on-year, and net profit fell 43% year-on-year; sales were US$12.543 billion, down 4% year-on-year, and increased by 4% at a fixed exchange rate, lower than the market's expectations of US$12.9 billion; net profit was US$1.575 billion, down 43% year-on-year, and decreased by 33% at a fixed exchange rate; earnings per share was US$0.73, compared with US$1.23 in the same period last year. Biogen's Q3 revenue was US$2.51 billion, compared with US$2.779 billion in the same period last year, with market expectations of US$2.469 billion; net profit was US$1.135 billion, with market expectations of US$495 million; earnings per share were US$7.84, with market expectations of US$3.57.Looking ahead, Biotech expects annual revenue of US$10 billion to US$10.15 billion, with market expectations of US$10.01 billion; it expects full-year adjusted earnings per share of US$16.5 to US$17.15, compared with previous expectations of US$15.25 to US$16.75.
Logichi (LOGI.US) Q2 sales were US$1.15 billion, and net profit fell 41% year-on-year. Logitech Q2 sales were US$1.15 billion, a year-on-year decrease of 12%; net profit was US$82.091 million, a year-on-year decrease of 41%; diluted earnings per share was US$0.50, a year-on-year decrease of US$0.81; gross profit was US$439 million, a year-on-year decrease of 19%. GAAP's operating profit was US$127 million, down 29% year-on-year. Non-GAAP's operating profit was US$156 million, down 26% year-on-year. Logitech reiterated its fiscal year 2023 outlook, with sales expected to fall by 4%-8%, and Non-GAAP operating profits ranged from $650 million to $750 million at constant exchange rates.
General Motors (GM.US) Q3 revenue increased by 56.4% year-on-year, reaffirming its annual performance guidance. GM Q3 revenue reached a record US$41.889 billion, a year-on-year increase of 56.4% compared with US$26.779 billion in the same period last year, and the market expects to be US$41.898 billion; net profit attributable to shareholders was US$3.305 billion, a year-on-year increase of 36.6%, and the market expects to be US$2.56 billion; diluted earnings per share was US$2.25, compared with US$1.62 in the same period last year, and the market expects to be US$1.78. Adjusted EBIT was US$4.287 billion, compared with US$2.922 billion in the same period last year; adjusted EBIT profit margin was 10.2%, compared with 10.9% in the same period last year. Looking ahead, the company expects full-year net profit of $9.6 billion to $11.2 billion; adjusted EBIT of $13 billion to $15 billion; and diluted EPS of $5.76 to $6.76.
Coca-Cola (KO.US), and General Electric (GE.US) Q3 revenue exceeded market expectations. Coca-Cola Q3 revenue was US$11.1 billion, compared with US$10 billion in the same period last year, and the market expected to be US$10.532 billion; net profit was US$2.825 billion, compared with US$2.471 billion in the same period last year, and the market expected to be US$2.614 billion; earnings per share was US$0.65, compared with US$0.57 in the same period last year, and the market expected to be US$0.61. Looking ahead, Coca-Cola expects adjusted organic revenue to grow by 14% to 15% year-on-year, while the market expects to increase by 13.4%. General Electric's Q3 revenue was US$19.1 billion, with an expected US$18.67 billion; a net loss of US$238 million, with an expected net profit of US$494 million; an adjusted earnings per share of US$0.35, with an expected US$0.47. Looking ahead, the full-year adjusted earnings per share is expected to narrow to the previous low end of $2.8-3.5. The adjusted free cash flow for the whole year is expected to be US$4.5 billion, and the market expects US$4.3 billion.
copyright cost has risen, and Apple (AAPL.US) has raised the music and TV+ subscription price for the first time. Apple raised subscription prices for its music and TV+ services for the first time, citing rising copyright costs, a move that could give competitors an edge in the highly competitive streaming industry. Apple raised the monthly subscription fee for Apple Music from $9.99 to $10.99, effective immediately, making it more expensive than the services of Spotify Technology (SPOT.US) and Amazon (AMZN.US). The price of Apple TV+ will climb from $4.99 to $6.99, while the price of the standard Apple One bundle will rise by $2 to $16.95. Apple's TV+ will continue to offer prices below Netflix (NFLX.US) and Warner Bros. Discovery Channel (WBD.US), but the platform has not been able to build a large user base like its competitors.
Meta (META.US) shareholders call for a cut of at least 20% wage costs and limit metacosmic spending. Altimeter Capital, a long-term shareholder of Meta, called on the company to cut wage costs by at least 20% and limit annual spending on the metaverse to less than $5 billion. And just a year ago, Facebook was renamed to Meta Platforms to highlight its focus on the meta-universe. Altimeter Capital CEO Brad Gerstner said Meta has lost its center of gravity and its stock performance is behind its peers. Data shows that Altimeter Capital holds 2.5 million shares of Meta, accounting for 0.11% of the issued shares. Meta has fallen 61% this year, while Nasdaq 100 has fallen 30%. The name change indicates that Meta plans to bet the future on the meta-universe. But as revenue growth slows, Meta has had to cut costs and freeze hiring to deal with fierce competition for user attention.
Important economic data and event predictions
Beijing time 22:00: US October Consulting Chamber of Commerce Consumer Confidence Index, US October Richmond Fed Manufacturing Index .
The next day at 01:55 am Beijing time: Federal Reserve Director Waller discusses the Federal Reserve's timely payment service FedNow.
The next day at 04:30 am Beijing time: The changes in API crude oil inventories in the United States for the week ending October 21 (10,000 barrels).
Try to determine: The EU holds a meeting of energy ministers.
Performance Forecast
Wednesday morning: Microsoft (MSFT.US), Google (GOOGL.US), Texas Instruments (TXN.US), Visa (V.US)
Before Wednesday trading: UMC (UMC.US), Squibb (BMY.US), New Oriental (EDU.US), Kraft Heinz (KHC.US), Boeing (BA.US)
