DJIA fell to 22,841.01 points (-0.14% daily and + 29.4% pa), and the S&P 500 fell to 2550.93 points (-0.17% daily and + 22.09% pa ) with a rise in gold prices for the fifth day in a row, this time to $ 1,297 per ounce, and a drop in the yield of US Treasuries to 2.32% due to a shift in attention to assets-safe havens from inflation after the Fed’s protocols and a signal of a deadlock in negotiations by Brexit.
The dollar index has stabilized around 93 points amid discussions on tax reform and the prospects for US loan rates. Some telecoms fell after AT&T reported a sharp outflow of TV subscribers in the 3rd quarter.
The benchmark Brent crude hit $ 56.5 / bbl after stocks data, IEA comments that stocks will fall for the first time this year after a sharp drop in prices 4 years ago, and OPEC’s forecast to eliminate oil supply oversupply next year.
Large multinationals were mostly stable. Some of them have stayed in the green zone, for example, Wal-Mart Stores, McDonald’s and Johnson & Johnson, whose products are in demand and business models are relevant, in the longer term. And yet, one cannot deny the partial profit-taking on the securities of credit institutions at the start of the reporting season under the influence of a not fully warmed-up market.
Procter & Gamble rose to $ 92.15 (+ 0.75% per day, market cap of $ 236 billion, past dividend yield + 3.0% per year) ahead of its October 20 reporting. Probably, the outlook for maintaining the return on equity in the region of + 25- + 30% is positively assessed. The median forecast assumes EPS growth of + 4% y / y to $ 1.07 thanks to cost-cutting measures and share buybacks. Among the risks, mention should be made of a decrease in the price of shaving care products due to a slight increase in competition. Yet there is little doubt about Procter & Gamble’s ability to tackle this factor in the longer term due to the diversification between different product categories.
Microsoft (Nasdaq: MSFT) shares increased in price to $ 77.1 (capitalization $ 583.99 billion) after the announcement of the joint launch of the artificial intelligence platform Gluon with Amazon, which will allow developers of all qualifications to prototype, design, train, and prepare complex machine models. training for cloud and mobile devices and applications.
As for the financial statements of banks, presented on Thursday before the opening of trading in New York, corporate and investment business, especially trading in fixed income instruments, constantly overcomes new challenges. Although the growth in card reserves may make some investors pause, the revenue-to-spending ratio is positive, the core business’s bottom line is improving, and the forecasts for the year remain unchanged. On Thursday, reports of two large banks were released: JPMorgan Chase (Nyse: JPM) showed EPS growth to $ 1.76 instead of the forecasted $ 1.66 against $ 1.58 a year earlier, and Citigroup (Nyse: C) improved its financial result to $ 1.42, then rise to only $ 1.30 from $ 1.24 was expected.
Why, then, the world platforms on the other side of the Pacific Ocean closed in a small minus? Perhaps the hurricane factor in the lagging data on wholesale gasoline prices affected. The growth of the general producer price index in America, as predicted by a number of Wall Street analysts, accelerated to + 2.6% per year (maximum in 5.5 years on an annualized basis), driven by higher profitability of retailers and higher prices for motor fuel due to Hurricane Harvey.
The general news background in the US remains rather calm. For example, the synchronous indicator of initial claims for unemployment benefits (there were 243 thousand of them instead of the expected 255 thousand) signaled in favor of an increase in loan rates. At the same time, FRS spokesman Powell spoke in favor of maintaining a moderate pace of monetary tightening.
Wells Fargo (Nyse: WFC), a particularly resilient lending institution, will be released on Friday, forecasting that earnings for the period will remain at $ 1.03 per quarter. Market participants will continue to discuss the prospects for tax reform and candidates for the chair of the Fed. The American head of state will meet with one of them, Stanford University economist Taylor, this week. The US Treasury expressed confidence in the adoption of a tax cut plan this year. On Friday, the focus will be on consumer price data in America.