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Market Recap

Last Week’s Headlines

Economy & World News

• Euro Area Economy Grows 0.4% in Q3, Surpassing Expectations 

  Driven by strong growth in Spain and Ireland, the eurozone's 0.4% expansion beat forecasts, while Germany avoided recession amid expectations of multiple European Central Bank rate cuts this year.

• EU Investigates Shein and Temu for Possible Digital Services Act Violations The European Commission is probing Shein’s compliance with product legality and Temu’s potentially addictive features, as part of a broader Digital Services Act initiative to ensure safer online platforms.

• US Economy Grows 2.8% in Q3 Driven by Consumer Spending and Defense Outlays 

  The US economy expanded at a strong 2.8% annualized rate in Q3, fueled by increased household purchases and higher federal defense spending ahead of the election.

• U.S. Payrolls Rise by Just 12,000 in October, Falling Short of Expectations 

  Nonfarm payrolls grew by 12,000, impacted by the Boeing strike and hurricanes, while revisions cut August and September job gains by 112,000. The unemployment rate held steady at 4.1%.

• Euro Area Inflation Rises to 2% in October, Slightly Exceeding Forecasts 

  Eurozone inflation ticked up to 2%, above expectations, while core and services inflation remained stable, reinforcing expectations for a 25 basis point rate cut by the European Central Bank in December.

• Series I Bonds Set to Yield 3.11% Through April 2025 

  The new I bond rate, tied to inflation, drops from previous highs, affecting both new and existing holders with adjustments based on purchase dates.

• U.K. Borrowing Costs Rise Post-Labour Government's First Budget 

  Following the Labour government's introduction of extensive borrowing and tax increases, U.K. borrowing costs have climbed, though analysts reject comparisons to the destabilizing 2022 "mini-budget" crisis.

• China Reworks Meta’s Llama Model for Military AI Tool, Pentagon Monitoring 

  Researchers linked to China’s People's Liberation Army used Meta's Llama model to create "ChatBIT," an AI tool for potential military use, despite Meta stating the PLA was unauthorized to employ its model.

Public Markets

• Volkswagen Eyes Pay Cuts and Plant Closures in Germany 

  Volkswagen's planned overhaul may lead to a 10% pay reduction, wage freezes, and potential plant closures, as economic pressures drive significant restructuring in Germany.

  • Volkswagen’s Q3 Operating Profit Falls Amid Lower Sales and Cut Forecast 

    Volkswagen reported a drop in operating profit to €2.86 billion and a slight decline in sales, following recent forecast cuts and labor disputes, with potential plant closures on the horizon.

• LyondellBasell to Close Houston Oil Refinery in Early 2025 

  Chemical maker LyondellBasell will permanently shut its Houston refinery, reducing crude distillation capacity as motor fuel demand wanes amid a shift towards renewable fuels and electric vehicles.

• BP Reports $2.3 Billion Q3 Profit, Slightly Beating Expectations 

  British oil giant BP posted a $2.3 billion profit for Q3, topping analyst predictions but marking its weakest quarter since 2020's pandemic slump in industry profits.

• Boeing Raises $21.1 Billion in Major Share Sale to Strengthen Finances 

  In one of the largest public company share sales, Boeing issued 112.5 million common shares and $5 billion in mandatory convertible preferred stock, aiming to bolster its balance sheet and avoid a credit rating downgrade.

• Apple’s iPhone Exports from India Surge Amid Push to Diversify Production 

  Apple exported nearly $6 billion in India-made iPhones from April to September, a one-third increase year-over-year, as it expands manufacturing outside China with annual exports on pace to exceed $10 billion for fiscal 2024.

• McDonald's Q3 Sales Miss Expectations Due to Weakness in International Markets 

  McDonald's saw a 1.5% drop in same-store sales in key regions like France and China, falling short of projections, while the US market managed a modest 0.3% growth.

• Oracle Unveils New AI-Enhanced Electronic Health Record System 

  Oracle introduced its most advanced EHR system since acquiring Cerner, integrating cloud and AI features to strengthen its competitive edge in the healthcare market.

• Eli Lilly Lowers Guidance After Disappointing Weight-Loss Drug Sales 

  Eli Lilly adjusted its outlook downward as its weight-loss drug posted its first sales miss, sparking doubts about the expected high demand for the treatment.

• Trafigura Faces $1.1 Billion Loss Amid Suspected Fraud in Mongolian Oil Unit 

  Trafigura Group may take a substantial $1.1 billion hit due to suspected fraud, potentially leading to restated earnings, following a similar $500 million nickel fraud less than two years ago.

• Super Micro Shares Plunge 44% in a Week Amid Auditor Departures 

  Super Micro's stock tumbled further after losing its second auditor in under two years and delaying its annual report, with a business update scheduled for Tuesday.

• BYD Surpasses Tesla in Quarterly Revenue Amid Electric Vehicle Rivalry 

  China's top automaker, BYD, reported a 24% revenue increase to 201.1 billion yuan ($28.2 billion) in Q3, marking the first time it has outpaced Tesla's $25.2 billion in sales.

• Stellantis Reports Revenue Drop Amid Lower Shipments and Unfavorable Market Factors 

  The net revenue decline was driven by reduced shipments, pricing challenges, and foreign exchange impacts, with Stellantis shares down over 40% year-to-date.

• Elliott Investment Management Raises Economic Exposure to 11.3% in Southwest Airlines 

  After reaching a truce with Southwest, Elliott adjusted its holdings to a 9.95% stake in common shares and 1.4% through derivatives, slightly lowering its common shares from 10.2%.

• TotalEnergies’ Q3 Profit Drops Amid Lower Oil Prices and Refining Margins 

  Earnings at TotalEnergies are returning to normal levels following recent high prices, as weaker demand in Europe and China pressures profits and balance sheets, impacting investor payouts.

• Peloton Appoints Former Ford Executive Peter Stern as New CEO 

  Peter Stern, formerly in charge of Ford’s subscription services, steps in as Peloton’s new CEO, bringing extensive experience from the automotive industry.

• Ford Pauses F-150 Lightning Production Amid High Inventory and Losses 

  Ford will halt production of the F-150 Lightning from Nov. 18 to Jan. 6 to manage inventory and reduce losses, with its electric vehicle division projected to lose $5 billion this year.

• OpenAI Introduces ChatGPT Search to Rival Traditional Search Engines 

  OpenAI's new ChatGPT search feature integrates real-time web search capabilities, delivering instant updates on sports, stocks, and weather, marking its official launch after successful beta-testing.

• Nvidia Replaces Intel in Dow Jones, Marking Shift in Semiconductor Industry 

  With Nvidia's stock up over 170% this year and Intel losing more than half its value, this change reflects the evolving landscape of the semiconductor sector.

• Berkshire Hathaway’s Cash Pile Hits Record $325 Billion as Buffett Sells Off Stocks 

  Warren Buffett's stock-selling spree boosted Berkshire Hathaway's cash reserves to a record $325.2 billion, with significant sell-offs in Apple and Bank of America contributing to $36.1 billion in divestitures during Q3.

Real Estate

•  Pending Home Sales Reach Highest Level Since March, Up 2.6% Year-Over-Year 

  Pending sales increased in the Northeast and West, driven by a drop in the 30-year mortgage rate, which recently hit a low of 6.11% in early September.

M&A, IPO’s, Bankruptcies

• Elon Musk’s xAI Seeks Funding to Reach $40 Billion Valuation 

  Elon Musk’s xAI is in talks to raise several billion dollars, aiming for a $40 billion valuation as it accelerates efforts in advanced generative AI, nearly doubling its valuation from $24 billion earlier this year.

•  Siemens to Acquire Altair Engineering for $10.6 Billion in Major Software Push 

  In its second-largest acquisition, Siemens will buy Michigan-based Altair Engineering at an 18.7% premium, aiming to boost its presence in the industrial software and PLM market shaped by AI and data analytics.

• Comcast Explores Separation of Cable Networks Business 

  Comcast is considering a spinoff of its cable networks, excluding NBC and Peacock, as announced in its Q3 earnings call.

• Waymo Valued Above $45 Billion After Latest $5.6 Billion Funding Round 

  Alphabet's autonomous driving unit, Waymo, raised $5.6 billion in new capital, pushing its valuation beyond $45 billion with backing from Alphabet and outside investors.

• TGI Friday’s Files for Chapter 11 Bankruptcy Amid Rising Consumer Cost Sensitivity 

  Casual dining chain TGI Friday’s sought bankruptcy protection on Nov. 2, citing financial pressures from cost-conscious diners, with assets and liabilities each listed between $100 million and $500 million.

Earnings this week

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