Dow recovered 283, advancers over decliners better than 5-1 & NAZ gained 126. The MLP index added 1 to the 249s & the REIT index was up 2+ to the 324s. Junk bond funds rose after recent selling & Treasuries were sold, taking yields higher (more below). Oil dropped another 1+ to the high 83s & gold sank 12 to 1975.
AMJ (Alerian MLP Index tracking fund)
Coca-Cola (KO), a Dow stock & Dividend Aristocrat, raised its annual revenue & profit forecasts
after beating quarterly results on the back of higher pricing, with
demand for its sodas remaining resilient at a time when consumers are
cutting back on non-essential spending. "We are seeing strong engagement from consumers across our staple of brands, which include Sprite, Fanta ... and Thums Up," CEO James Quincey said. Average selling prices rose 10% in the qtr, while
in North America volumes declined 1%, showing little impact to demand
with overall unit case volumes remaining flat. KO now expects organic revenue growth of 8-9% for the full
year, compared with a prior forecast of an increase of 7-8%. The
maker of Sprite & Fanta also forecast full-year core EPS to rise 5-6% higher than prior expectations. The stock rose 1.60.
If you would like to learn more about KO, click on this link:
club.ino.com/trend/analysis/stock/KO_aid=CD3289&a_bid=6aeoso5b6f7
Coca-Cola raises annual forecasts as demand unaffected by price hikes
General Motors (GM) beat 3rd-qtr expectations, as it
battles thru ongoing labor strikes by the United Auto Workers union
that's costing the automaker roughly $200M a week in lost vehicle
production. The labor strikes, which started Sep 15,
have cost the automaker roughly $800M in pre-tax earnings due to
lost vehicle production, including $200M during the 3rd
qtr, according to CFO Paul Jacobson. Due
to the ongoing volatility caused by the strikes, GM is pulling its
previously announced earnings guidance for the year that called for $12-14B in adjusted earnings & net income attributable to stockholders of $9.3-10.7B. For the 3rd qtr, GM reported EPS of $2.20, down 7.3% from a year
earlier when the company earned $2.25. Revenue
during the period increased 5.4% from $41.9B a year earlier,
while adjusted earnings before interest & taxes (EBIT) declined 16.9%
from the 3rd qtr of 2022 to $3.6B. GM's North
American adjusted earnings were off 9.5% during the 3rd qtr from a
year earlier to $3.53B. Its intl operations increased
earnings by roughly 7% to $357M, while its equity income from
operations in China were down year over year by about 42% to $192M. GM said from Jan to Sep of this year
it lost roughly $1.9B on Cruise, the company's majority-owned
autonomous vehicle subsidiary. Those losses include $732M during
the 3rd qtr, as the company geographically expands operations. Jacobson said GM also is pulling near-term targets
for its electric vehicles amid slower-than-expected demand. The
automaker had previously set goals to sell 400K EVs in North America
from 2022 thru mid-2024 & produce 100K EVs in North America
during H2. Jacobson added GM will retain
its targets of achieving low-digit profit margins on EVs as well as
North American annual production capacity for the vehicles of 1M
by 2025. Prior to the UAW strikes, Jacobson said the company was on track to achieve “toward the upper half” of its earnings forecast. The stock was up a penny.
If you would like to learn more about GM, click on this link:
club.ino.com/trend/analysis/stock/GM_aid=CD3289&a_bid=6aeoso5b6f7
GM tops Q3 expectations but pulls full-year guidance due to UAW strikes
Treasury yields were steady after slipping back below 5%, though they remained near 16-year highs. The yield on the benchmark 10-year Treasury note was up around 2.3 basis points at 4.85% while the yield on the 30-year Treasury bond climbed less than one basis point to 4.99%. Yields move inversely to prices. The 10-year climbed above 5% yesterday, having crossed the symbolic threshold last week for the first time since 2007, before retreating over the course of the session. Yields fell after Pershing Square's Bill Ackman disclosed that he had covered his bond short position. In a post on social media platform X, formerly known as Twitter, Ackman said “there is too much risk in the world to remain short bonds at current long-term rates,” tying the move to a view that bonds could soon become interesting as a safe haven with stocks remaining volatile amid widespread geopolitical risk. Markets are also contending with comments by Federal Reserve Chair Jerome Powell from last week. Powell said the central bank would remain “resolute” in its commitment to bringing inflation down sustainably to 2% & that lower economic growth was likely needed to achieve that goal. The Federal Open Market Committee will meet on Oct 31 & announce its next interest rate decision on Nov 1, having held rates steady at 5.25-5.50% at its Sep meeting. Markets are all but certain that the Fed funds target range will remain unchanged next week, according to CME Group's FedWatch tool.
Treasury yields are little changed after 10-year slips back below 5%
Dow Jones Industrials
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