Markets waver on mixed economic data

Dow slid back 70, decliners over advancers 5-2 & NAZ went up 59.  The MLP index hardly budged hovering near 282 & the REIT index fell 3 to the 428s.  Junk bond funds fluctuated & Treasuries were sold bringing higher yields (more below).  Oil was up slightly in the 67s after recent selling & gold rebounded 2581 to a new record.

Dow Jones Industrials

Pfizer (PFE) reported 3rd-qtr revenue & adjusted profit that blew past expectations as the company's Covid vaccine & antiviral pill Paxlovid helped boost sales.  The pharmaceutical giant also hiked its full-year outlook & now expects to book adjusted EPS of $2.75 - $2.95, up from its previous guidance of 2.45 - $2.65.   PFE expects revenue $61-64B, up from a previous revenue forecast of $59.5-$62.5B.  That includes roughly $5B in expected revenue from its Covid vaccine & $5.5B from Paxlovid.  The company booked 3rd-qtr EPS of 78¢.  That compares with net loss of 42¢ per share, during the same period a year ago.  Excluding certain items, including restructuring charges & costs associated with intangible assets, the company posted EPS of $1.06 for the qtr.  Revenue was $17.7B in the 3rd qtr, up 31% from the same period a year ago.  Excluding Covid products, revenue for the 3rd qtr rose 14% on an operational basis, fueled by approved cancer products from Seagen, which it acquired last year for a whopping $43B.  Those drugs brought in $854M in revenue for the qtr, including $409M from a targeted treatment for bladder cancer called Padcev as well as $268M from Adectris, a drug that targets certain lymphomas.  PFE completed its acquisition of Seagen in Dec.  The stock fell 66¢.

Pfizer tops earnings estimates, hikes full-year guidance as Covid products help sales

McDonald’s (MCD), a Dow stock & Dividend Aristocrat, reported quarterly earnings & revenue that beat expectations as its US restaurants reversed last qtr's same-store sales decline.  However, investors are worried about another dent to US sales fueled by a recent E. coli outbreak across 13 states linked to MCD's Quarter Pounder burgers.  As of Fri, 75 health cases have been tied to the outbreak, including 1 death of an older adult.  Daily sales & traffic turned negative immediately after MCD was linked to the outbreak, CFO Ian Borden said.  Still, the company isn't expecting the situation to have a material impact on its business.  3rd-qtr EPS was $3.13, down from $3.17 a year earlier.  Excluding certain items, the fast-food giant EPS was $3.23.  Net sales rose 3% to $6.87B.  Global same-store sales fell 1.5%, a more drastic decline than the 0.6% than expecteds, & was weighed down by the company's intl markets.  It's the 2nd straight qtr that same-store sales have fallen.  “While we anticipated a challenging environment in 2024, our performance this year has fallen short of our expectations,” CEO Chris Kempczinski said.  US same-store sales rose 0.3%, reversing last qtr's same-store sales declines but still slightly weaker than the 0.5% increase predicted.  Traffic to its US restaurants was slightly negative, but the company credited its marketing & a $5 value meal launched in late Jun for the increase in sales.  The stock rose 1.11.

McDonald’s reverses U.S. same-store sales declines in the third quarter, but E. coli fallout looms

Treasury yields were higher, with the 10-year Treasury yield trading at its highest level since Jul as investors looked to upcoming economic data.  The yield on the 10-year Treasury was up around 3 basis points at 4.306% & it has been on the rise in recent days.  The 2-year Treasury yield was last marginally lower at 4.141%.  Yields & prices move in opposite directions & 1 basis point equals 0.01%.  Several data releases painted a mixed economic backdrop.  While consumer confidence was strong, a lower-than-expected number of job openings indicated some potential weakness in the labor market.  The ADP's private payrolls data & the all important Oct jobs report are also due in the coming days.  Also this week, the latest personal consumption expenditure price index is expected, which is the Federal Reserve's favored inflation gauge.  Investors will be watching the data closely for hints about the monetary policy outlook.

10-year Treasury yield hits new 3-month high above 4.3% ahead of key data this week

Stocks searched for direction as investors digested new data on job openings & absorbed a fresh wave of earnings.  Investors have been closely watching for signs of further cooling in the labor market ahead of the Federal Reserve's next interest rate decision on Nov 7.  Updates on inflation & the jobs market later in the week will also be key in determining Fed policy.  Once again, gold is in heavy demand while the stock is struggling to advance.