2023 Nov 3, US Market
Apple (AAPL) reported upbeat Q4 results, with year-over-year increases in iPhone revenue but decreases in Mac, iPad, and wearables revenue
Block (SQ) reported better-than-expected Q3 earnings and revenue and reported an initial authorization to repurchase $1B in shares
Booking Holdings (BKNG) reported upbeat Q3 earnings and revenue, with CEO Glenn Fogel saying he is "encouraged by the resilience of leisure travel demand"
Restaurant Brands (QSR) reported better-than-expected Q3 earnings but lower-than-expected Q3 revenue
Microsoft (MSFT) announced the Secure Future Initiative to advance security engineering
Netflix (NFLX) is exploring streaming a live boxing match featuring influencer Jake Paul, WSJ reports
Nio (NIO) plans to cut its workforce by 10% this month, Reuters reports
Sir Jim Ratcliffe is set to commit $300M to Manchester United (MANU), Sky News says
Lionsgate's (LGF.A) Starz will exit the U.K. and Australia, and will lay off over 10% of staff, CNBC reports
Bank of America (BAC) and other big banks are having issues with Automated Clearing House, CNN reports
Udemy (UDMY) and Editas Medicine (EDIT) higher after reporting quarterly results
Redfin (RDFN) gains after reporting quarterly results and providing guidance for Q4
Figs (FIGS) increases after reporting Q3 results and providing guidance for FY23
Fox Factory (FOXF) falls after reporting quarterly results and B. Riley downgraded the stock
Bill (BILL) declines after reporting Q1 results and cutting its FY24 guidance
Coinbase (COIN) reported Q3 results, with revenue higher year-over-year
Expedia (EXPE) reported Q3 results and announced a $5B share repurchase program
Fortinet (FTNT) announced Q3 results and provided guidance for Q4 and FY23, with Cantor Fitzgerald downgrading the stock due to the "disappointing" set of results
Paramount (PARA) reported Q3 results, with CEO Bob Bakish commenting "We continue to execute our strategy and prioritize prudent investment in streaming while maximizing the earnings of our traditional business"
DraftKings (DKNG) reported Q3 results and raised its guidance for FY23
KeyBanc upgraded Uber (UBER) to Overweight from Sector Weight with a $60 price target ahead of the company's earnings report on November 7. The analyst believes expense discipline at Uber should continue driving an EBITDA and free cash flow inflection, while advertising "provides a lever to keep prices low to drive volumes."
Raymond James upgraded Regeneron Pharmaceuticals (REGN) to Outperform from Market Perform with a $950 price target. The analyst sees positive momentum into 2024 following the company's Q3 report.
Guggenheim upgraded Confluent (CFLT) to Buy from Neutral with a $23 price target. The analyst says the company is "structurally sound and undervalued" following the more than 40% post-earnings selloff. Wolfe Research also upgraded shares to Outperform from Peer Perform.
Deutsche Bank upgraded Molson Coors (TAP) to Hold from Sell with a price target of $58, up from $57. While investor concerns around the company's ability to comp fiscal 2023's "robust" growth and the potential for margin degradation in a more intense competitive environment in fiscal 2024 remain "valid and reasonable," these risks are now adequately discounted in the stock's current valuation.
Wells Fargo upgraded Omnicell (OMCL) to Equal Weight from Underweight with a price target of $28, down from $39, post the Q3 report. The analyst still sees risks to the firm's lowered estimates, but upgraded the shares, saying it is difficult to expect material underperformance over the near- to medium-term given Omnicell's announced cost cuts, potential for bookings growth, and the stock's valuation multiple contraction "mostly in the rear-view."
JPMorgan downgraded Fortinet (FTNT) to Neutral from Overweight with a price target of $52, down from $67. Fortinet reported billings and revenue under expectations and cut full year billings and revenue guidance for the second quarter in a row, the analyst tells investors in a research note. Fortinet was also downgraded at Stifel, Cantor Fitzgerald, Evercore ISI, William Blair, and Oppenheimer.
KeyBanc downgraded Bill (BILL) to Sector Weight from Overweight without a price target. The company revised fiscal 2024 guidance lower as headwinds to payment volume picked up in late Q3 and persisted through October, the firm says.
Berenberg downgraded Estee Lauder (EL) to Hold from Buy with a price target of $118, down from $224. The drag from destocking appears to have escalated in fiscal Q1 and headwinds are now expected to persist for longer, the analyst tells investors in a research note.
RBC Capital downgraded Sangamo Therapeutics (SGMO) to Sector Perform from Outperform with a price target of $2, down from $6. The company is going into cash preservation mode by reducing the workforce by 40%, shutting down Brisbane headquarters, pausing late study pipeline and releasing its CSO and COO, the analyst says.
BTIG downgraded Omnicell (OMCL) to Neutral from Buy without a price target post the Q3 report. The analyst cites a "consistent lack of visibility" and the turnover of senior leadership in the past few months for the downgrade. Several large publicly traded hospital companies have reported improving volumes, and better inflation and labor trends, but Omnicell's clients continue to delay purchases, the analyst tells investors in a research note. The firm says the company is well along the XT upgrade cycle, and it worries that the market itself is facing slowing growth.
BMO Capital reinstated coverage of Coeur Mining (CDE) with a Market Perform rating and $2.75 price target. The analyst sees value in the shares due to the company's production growth profile at Rochester in the near term and Silvertip longer term.
RBC Capital initiated coverage of Veralto (VLTO) with a Sector Perform rating and $78 price target. The "highly-anticipated" Danaher (DHR) spinout has 23% EBITDA margins, 57% razor/razor blade recurring revenues and "also ranks as an elite Prime according to our Investment Framework," the analyst tells investors.
The S&P 500 rallied Friday, capping its best weekly performance since November 2022, after the latest monthly jobs report suggested the Federal Reserve’s interest-rate raising campaign is working.
The broad index gained 0.9%, bringing its gains for the week to 5.9%. The index is up 14% this year. The Dow Jones Industrial Average added about 200 points, or 0.7%, on Friday, while the Nasdaq Composite rose 1.4%. Those indexes also recorded their biggest weekly percentage gains of the year.
New economic data and the Fed’s latest policy decision gave investors hope that the economy is pulling back enough for inflation to abate without falling into a recession—and that interest rates could be near their peak.
The October jobs report showed hiring slowed last month. Employers added 150,000 jobs in October, the Labor Department reported Friday, half the prior month’s gain and below economists’ expectations. The unemployment rate rose to 3.9% and wage growth eased.
The Fed on Wednesday left its benchmark interest rate unchanged and hinted the central bank could be done raising rates for now, but didn’t rule out another increase. Traders are pricing in a 95% probability that the Fed will leave rates as is in December, up from 79% a week ago, according to CME Group’s federal-funds futures.
The Treasury Department also gave markets a surprise boost on Wednesday when it announced smaller-than-expected increases to longer-term debt auctions and suggested that it was willing to overstep informal guidelines for how much short-term Treasury bills to issue.
The yield on the U.S. 10-year Treasury note ended the week at 4.557%, from 4.846% a week ago. That marked the steepest weekly drop since March.
The pullback in bond yields alleviated a pressure point for stocks. Higher yields make borrowing more expensive for companies and households. Elevated rates also make stocks look less attractive because they represent an essentially risk-free return, raising the bar for riskier assets such as equities.
The major U.S. stock indexes climbed Friday despite a decline in shares of Apple after a lackluster earnings report. The tech behemoth is the most heavily weighted component of the S&P 500, so it has an outsize influence on index performance.
Apple shares dropped 0.5% after the company reported its fourth consecutive quarter of falling revenue and warned that sales in the current quarter would be similar to last year. The company’s business in China shrank, underscoring weakness from a broad economic slowdown in the country and new competition from rival Huawei Technologies.
Shares of Paramount rallied 15% after the company, parent of Paramount Pictures movie studio and the CBS broadcast network, said its streaming business lost less money last quarter. Shares of Block rose 11% after the payments company formerly known as Square raised its full-year guidance and beat expectations for the third quarter.
All but one of 11 sectors in the S&P 500 rose Friday. The energy sector slipped 1% as Brent crude dropped 2.3% to $84.89 a barrel.
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