Welcome to Read Sunday, your essential source for a concise and impactful weekly Business & Finance recap. Dive into the pivotal market highlights from the week, distilled for your convenience, and stay tuned for the thought-provoking editor's piece that rounds off your Sunday with insightful perspectives.

Market Recap

This Week’s Headlines

Public Markets

• Pharmaceutical companies are expanding their efforts to gain approval for weight-loss injections in increasingly younger patients.

  Eli Lilly & Co. is reportedly preparing to conduct trials of its diabetes medication Mounjaro in patients as young as six years old who are dealing with obesity, as disclosed by an anonymous source familiar with the trial due to a lack of authorization to speak publicly. In a similar vein, Novo Nordisk A/S is testing Saxenda, an earlier and less potent iteration of its successful drugs Ozempic and Wegovy, in children as young as six. (BBN)

• JPMorgan Chase & Co. is in the process of hiring numerous call center employees in Baltimore, and these individuals will have minimal physical presence in an office setting. This strategy follows the success of a similar initiative undertaken by the company in Detroit. (BBN)

• Solar power stocks experienced a significant decline in early trading on Friday, prompted by a warning from solar equipment manufacturer SolarEdge Technologies (SEDG) that demand in Europe has seen a substantial downturn. SolarEdge (SEDG) stock plummeted by 26% on Friday, with an even steeper drop of over 30% earlier in the day, marking its most substantial single-day decline in history. Competitor Enphase Energy (ENPH) also saw a 12% decrease. Solar developers Sunrun (RUN) and SunPower (SPWR) both experienced declines of 3.3% and 8.9%, respectively. The Invesco Solar exchange-traded fund (TAN) was down 6%, marking its worst performance in over a year. (BAR)

• Costco Wholesale has announced a change in leadership, with longtime Chief Executive Craig Jelinek set to step down after the holiday season. He will pass on the role to his top deputy, Ron Vachris, who has also been with the warehouse retailing giant for decades. Ron Vachris, aged 58 and currently serving as the company's President and Chief Operating Officer, is slated to assume the CEO position in January. He will become only the second person to hold the position of CEO at Costco since the company's co-founders. (WSJ)

Economy

• The Labor Department's report on Thursday revealed that the number of Americans applying for fresh unemployment benefits dropped to the lowest level in nine months. This signals that robust job expansion continued throughout October, maintaining a tight labor market.

  This surprising decrease in initial jobless claims, combined with strong retail sales and factory production figures from September, underscores the ongoing momentum in the economy. (RET)

• On Wednesday morning, the average rate for the widely-used 30-year fixed mortgage reached 8%, as reported by Mortgage News Daily. This marks the highest level observed since the middle of the year 2000. This significant milestone coincided with a surge in bond yields to levels not witnessed since 2007. Mortgage rates tend to loosely track the yield on the 10-year U.S. Treasury bond. (CNBC)

• Federal Reserve Chair Jerome Powell has indicated that the increase in long-term Treasury yields might offer the central bank an opportunity to pause its historic series of interest rate hikes, provided that recent progress in managing inflation remains on track. Powell's comments, made during a lunchtime address in New York on Thursday, align closely with statements from fellow Fed officials who have suggested that they will maintain short-term interest rates at their current levels during the upcoming meeting scheduled for October 31 to November 1. (WSJ)

• The U.S. Department of the Treasury reported that the federal government concluded its fiscal year in September with a deficit of nearly $1.7 trillion. This marked a significant increase of approximately $320 billion, or 23.2%, compared to the fiscal year 2022. While there were concerns that the deficit might exceed $2 trillion, it ultimately amounted to $1.695 trillion. This substantial deficit was primarily driven by a $457 billion decrease in revenue compared to the previous year, while expenses only decreased by $137 billion. Total outlays for the fiscal year amounted to $6.134 trillion. (CNBC)

• On Friday, Republican lawmakers decided not to nominate Rep. Jim Jordan as their candidate for the position of Speaker of the House of Representatives. This decision came after Jordan's unsuccessful attempt to secure the role for the third time. (CNBC)

Mergers & Acquisitions

• Devon Energy Corp., an oil and gas company headquartered in Oklahoma City, is reportedly exploring potential significant acquisition opportunities as part of its strategy to expand its presence in the U.S. shale industry, as informed by anonymous sources. In recent months, Devon has engaged in initial discussions regarding a potential merger with Marathon Oil Corp., according to these sources, who preferred not to be identified due to the confidential nature of the matter. The two companies are seen as complementary because they both operate in several key basins located in the Midwestern United States, including Oklahoma, Texas, and New Mexico. Marathon Oil Corp. currently boasts a market value of approximately $17.5 billion. (BBN)

• KKR & Co. has made a formal offer for Telecom Italia SpA's landline grid, though this binding bid has raised some concerns and excluded the telecommunications company's subsea cable unit due to its significant debt. As a result of these developments, Telecom Italia's shares experienced a decline in Milan. The offer from KKR & Co values the landline network at potentially up to €23 billion. (BBN)

• Chesapeake Energy Corp, a U.S. natural gas producer, has reportedly initiated discussions with Southwestern Energy, a peer company with a market valuation of approximately $12 billion, including its debt. These talks are centered around the possibility of an acquisition, as per sources familiar with the matter. If these two companies were to merge, they would surpass EQT Corp as the largest natural gas-focused exploration and production company in the U.S. in terms of market value. This move comes at a time when shale companies are actively pursuing scale and efficiencies in their operations. (RET)

• Wyndham Hotels & Resorts Inc. has turned down a takeover offer from Choice Hotels International Inc., stating that the proposal does not accurately reflect the potential for growth within the company and would also entail a protracted regulatory review process. Choice Hotels publicly disclosed its bid for Wyndham, offering $90 per share in a cash and stock deal, which values Wyndham at approximately $9.8 billion, including its debt. (GULF)

• Greece is in the process of preparing to sell a 20% stake in the National Bank of Greece as part of its strategy to divest holdings in the country's banking institutions. (BBN)

• OpenAI is reportedly in discussions to sell shares held by its current employees at a valuation of $86 billion. (FORT)

• Beijing is considering delaying or potentially blocking the $69 billion acquisition of cloud software company VMware by the U.S. chipmaker Broadcom. This move comes shortly after Washington implemented stricter regulations aimed at restricting Chinese access to high-performance semiconductor technology. (FT)

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