Equity markets finished broadly higher on Tuesday, helped by the stabilisation in government bond yields and optimism around corporate profits. The interest-rate-sensitive utilities sector led the gains, while energy was the only sector lower, as oil prices fell for the third day in a row amid hopes for a de-escalation in the geopolitical uncertainty. Consequently, the S&P 500 Index was up 0.7%, the Dow Jones Industrial Average advanced by 0.5%, and the Nasdaq Composite rallied by 0.9%. In European equity markets also rebounded yesterday, with the German DAX rising 0.5% and the Euro Stoxx 50 up 0.6% as investors shrugged off weak PMI data and cheered updated corporate results.  

Summary for 25.10.2023 

  • Most Asian equities rose this morning, tracking a positive overnight session on Wall Street, while Chinese shares extended a recovery rally after the government announced plans for a massive bond issuance. However, Australian shares diverged from the positive trend, declining as third-quarter inflation figures came in above expectations, reinforcing the Reserve Bank of Australia’s hawkish stance. 
  • European shares are poised for slight gains at the open as traders assess the latest moves by the Chinese government to support its ailing economy. Elsewhere, US equity futures were little changed as investors reacted to mixed earnings results from major technology firms. 
  • Oil prices were generally steady today, supported by a surprising decline in US crude inventories, despite mixed economic data from the Eurozone and the US. Geopolitical optimism and the suspension of sanctions on Venezuela also contributed to the stable prices. 
  • Australia’s inflation rate fell to 5.4% year-on-year in the third quarter, down from 6.0% in the previous period and compared to market forecasts of 5.3%. This marked the third quarter in a row of lower annual inflation, pointing to the softest figure since the first quarter of 2022, driven by a slowdown in goods and services.  
  • US intelligence officials have concluded with “high confidence” that Israel wasn’t behind an explosion at a hospital in Gaza City last week that killed as many as 300 people, the Washington Post reported. Meanwhile, Israel’s credit outlook was cut to negative by S&P Global Ratings, which cited risks that the war with Hamas could spread more widely and have a more pronounced effect on the country’s economy than expected. 
  • Alphabet shares fell by 6.1% in after-hours trading as its cloud business showed the slowest growth in at least 11 quarters, despite beating profit and sales estimates. Investors expressed concern about Google’s cloud unit’s ability to compete with Microsoft’s Azure and Amazon’s AWS as companies scaled back cloud-related spending amid global economic uncertainties. 
  • Also after hours, Microsoft surpassed expectations with $56.5 billion in quarterly revenue and $2.99 adjusted earnings per share, driven by a 29% growth in its Azure cloud business. AI investments, including the acquisition of OpenAI and AI-powered Copilot apps, are driving expansion, leading to a rise of 4% in the shares in after-hours trading. 
  • Snap rebounded in the third quarter with a 5% year-over-year increase in revenue, reaching $1.2 billion, following two quarters of declining sales. The positive results were attributed to improvements in its advertising platform. This exceeded analyst expectations, as they had predicted a 1.6% drop. Shares were marginally higher in extended trading. 
  • Banco Santander reported a third-quarter net profit of €2.90 billion this morning, a 20% increase from the previous year, supported by higher net interest income. Total revenue rose by 10% to €14.86 billion, surpassing analyst expectations, and the bank remains on track to achieve its 2023 targets, including double-digit revenue growth and a return on tangible equity of more than 15%. 
  • Deutsche Bank on Wednesday reported a third-quarter net profit of €1.031 billion, slightly surpassing expectations, despite an 8% decline compared to the previous year, with the Investment unit continuing to face challenges. The bank delivered a strong performance in corporate banking, while its investment arm experienced a slowdown, contributing to its thirteenth consecutive profitable quarter since its 2019 restructuring. 
  • Kering reported third-quarter sales of €4.46 billion after the market closed yesterday, missing analyst expectations. The luxury industry is facing slowing sales due to various factors, including inflation and challenges in China’s economy. Kering’s CEO cited efforts to enhance their brands and distribution as influencing revenue performance. 
  • Barclays fell 6.5% yesterday after the British bank reported a 16% decline in third-quarter profit, with income at its corporate and investment bank missing expectations. The bank also lowered its UK net interest margin guidance for 2023. 
  • Coco-Cola was up 2.9% after reporting Tuesday better-than-expected earnings and revenue for the previous quarter. The drinks maker also raised its full-year forecast. 
  • Shares of General Electric rose 6.9% on Tuesday after the company’s quarterly results exceeded expectations and it raised its full-year forecast, thanks in part to strength in its aerospace business. 
  • Spotify rallied by 10.2% yesterday after posting an unexpected profit for the third quarter, helped by cost-cutting measures such as layoffs and higher subscription costs.