On Wednesday, the US equity market had a relatively quiet day, with the S&P 500 edging up by 0.1%, extending its eighth consecutive day of gains. The Dow Jones Industrial Average slipped slightly, while the Nasdaq Composite also posted a modest 0.1% gain. Small-cap shares underperformed, shedding over 1%, and investors appeared to be in a holding pattern as they awaited next week’s consumer price index (CPI) inflation and assessed the staying power of the recent market rally. In contrast, European shares reversed early losses to close higher, with the DAX 40 and Euro Stoxx 50 indices rising by over 0.5%, to their highest level since 12th October. 

Summary for 09.11.2023 

  • Asian equities markets were mixed this morning, influenced by weaker-than-expected consumer and producer price data from China. Markets in Australia, Japan, and South Korea rose, as did shares in mainland China, while Hong Kong equities declined. These movers were influenced by factors such as corporate results and comments from Federal Reserve officials. 
  • European shares are on course for a muted open while US equity futures eased this morning as investors continue to assess whether interest rates have peaked. 
  • Oil prices were higher on Thursday, recovering from recent four-month lows. This rebound comes as concerns persist about a slowdown in global crude demand, driven by factors such as a significant increase in US crude inventories, strength in the US dollar, and weak economic signals from major economies, particularly China and the euro zone. These factors have put pressure on oil markets, causing prices to fluctuate. 
  • In October, China’s consumer prices dropped by 0.2% year-on-year, primarily driven by a decline in food prices, marking the fourth consecutive month of falling food prices. China’s producer prices also declined by 2.6% year-on-year in the same month, indicating the 13th consecutive month of producer deflation, with costs of means of production remaining low. 
  • In September, median consumer expectations for Euro Area inflation over the next 12 months rose to 4.0%, the highest level since April, while expectations for inflation three years ahead remained at 2.5%. Younger respondents expressed lower inflation perceptions and expectations compared to older respondents. 
  • Meantime, Euro Area sales fell by 0.3% in September, marking the third consecutive monthly decline, driven by a 1.9% drop in non-food product sales and reflecting consumer challenges due to high inflation and borrowing costs. However, sales of food, drinks, and tobacco increased by 1.4%, with mixed results among the largest economies in the bloc. 
  • Hollywood actors have reached a tentative agreement with major studios to end a 118-day strike, securing a new three-year contract valued at over $1 billion. The deal includes increased minimum salaries, a “streaming participation” bonus, and protections against the unauthorised use of AI-generated images, marking a significant development in the entertainment industry’s response to labour demands in the streaming era. 
  • Eli Lilly’s share price experienced a more than 3% increase yesterday following the approval of its weight-loss treatment, Zepbound, in both the US and the UK, setting up competition with Novo Nordisk’s Wegovy in the obesity market. Priced at $1,059.87 per month, Zepbound s positioned to become a top-selling drug, although concerns about drug affordability and access persist.  
  • Airbus reported a 21% increase in adjusted operating earnings to €1.013 billion for Q3 but noted a €300 million charge related to unidentified satellite programmes. The company reaffirmed its 2023 financial and delivery forecasts and announced plans to raise A350 jet production to 10 months in 2026 to meet growing demand, particularly for wide-body aircraft. 
  • Disney reported better-than-expected earnings in its fiscal Q4, with adjusted per-share earnings of 82 cents, surpassing the average forecast of 70 cents. The company’s strong performance was driven by higher attendance at its Shanghai and Hong Kong theme parks, along with solid subscriber gains for Disney+ and an ongoing focus on cost-cutting. This led to a 3% increase in its share price in after-hours trading. 
  • Arm Holdings provided a fiscal Q3 sales outlook below Wall Street estimates, causing its shares to drop 8% in extended trading. However, the company also forecasted fiscal full-year sales that exceeded Wall Street expectations, driven by strong demand for new chip designs in the artificial intelligence sector. 
  • Twilio reported better-than-expected Q3 results with EPS of $0.58 and revenue of $1.03 billion, causing its shares to surge more than 7% in after-hours trading. The company’s strong performance was driven by solid growth in both Communications and Data & Applications revenue, and it provided a positive outlook for Q4 2023, surpassing consensus estimates.