The latest Consumer Price Index (CPI) data for October showed a surprising halt in inflation, recording a 0.0% month-over-month change, which was below the 0.1% increase that had been anticipated by economists. This stagnation in inflation, primarily driven by a decrease in gasoline prices, suggests a potential deceleration of the economy. Year-over-year, the CPI rose by 3.2%, which is slightly less than the expected 3.3% and lower than the previous 3.7%. The shelter index continued its upward trend, which was somewhat offset by a 5.0% decline in the gasoline index, while the energy index fell by 2.5% month-over-month.
Within the CPI report, the food category saw a 3.3% year-over-year increase, with notable variations across different food items. For instance, eggs experienced a significant price drop of 22.2%, while the sugar and sweets category saw a 5.2% increase. This mixed picture of food inflation impacts a variety of food companies, including Tyson Foods (TSN, Financial), Hormel (HRL, Financial), Oatly (OTLY, Financial), Cal-Maine Foods (CALM, Financial), Hershey (HSY, Financial), and Mondelez International (MDLZ, Financial), as well as the Invesco Food & Beverage ETF (PBJ, Financial).
Stock index futures, including Nasdaq 100 (NDX:IND), S&P (SPX, Financial), and Dow (INDU, Financial), responded positively to the CPI data, with notable increases across the board. The 10-year Treasury yield (US1OY, Financial) and the 2-year yield (US2Y, Financial) both saw a drop, reflecting a shift in market sentiment regarding interest rates and economic outlook.
Sea's (SE, Financial) stock took a hit, dropping about 10% premarket after the company reported a narrower net loss for the third quarter compared to the previous year, but a significant drop from the net income reported in the second quarter of 2023. Sea, which faces stiff competition in the e-commerce space from players like Alibaba's (BABA, Financial) Lazada and ByteDance's (BDNCE, Financial) TikTok, is also contending with regulatory changes in Indonesia that impact social commerce platforms.
Splunk (SPLK, Financial) saw a 3% increase in premarket trading after announcing the expiration of the waiting period under the Hart-Scott-Rodino Act for its $28 billion sale to Cisco Systems (CSCO, Financial). The deal is expected to complete by the end of the third calendar quarter of 2024, with Splunk continuing to operate as a cybersecurity company under Cisco's umbrella.
Early-stage data from Eli Lilly (LLY, Financial) showed that its experimental drug lepodisiran could significantly reduce lipoprotein(a), a risk factor for cardiovascular disease, by up to 94% in a single injection. The findings from a Phase 1 trial suggest the potential for further research into the drug's efficacy and safety.
Oppenheimer Holdings expressed optimism about the S&P 500 (SP500, Financial), predicting resumed upward momentum into the first half of 2024. The firm highlighted Technology (XLK, Financial) as its top year-end idea, providing Buy ratings for several tech stocks, including ServiceNow (NOW, Financial), Salesforce (CRM, Financial), PTC (PTC, Financial), Tyler Technologies (TYL, Financial), Applied Materials (AMAT, Financial), KLA Corp. (KLAC, Financial), and Advanced Micro Devices (AMD, Financial).
ARK Invest, led by Cathie Wood, launched a suite of actively managed exchange-traded funds in partnership with 21Shares, focusing on the cryptocurrency market. The ETFs offer exposure to crypto assets like Bitcoin (BTC-USD, Financial) and Ethereum (ETH-USD, Financial) through futures contracts.
Charles Schwab (SCHW, Financial) reported core net new assets of $16.1B for October, excluding Ameritrade brokerage originated clients, and total client assets of $7.65T at the end of October, marking a 9% increase year-over-year.
Pfizer’s (PFE, Financial) oral antiviral therapy Paxlovid was associated with a higher incidence of COVID-rebound than previously thought, according to a study published in the Annals of Internal Medicine. The study found that around 20% of Paxlovid recipients experienced an increase in viral levels after completing the therapy.
Sea Ltd (SE, Financial) reported a third-quarter GAAP EPS of -$0.26, missing estimates, but revenue of $3.3B showed a 3.1% year-over-year increase, beating expectations. The company's stock experienced a premarket drop of 10%.
Home Depot (HD, Financial) saw its stock rise after reporting a top and bottom line beat for Q3, despite a decline in total quarterly comparable sales. The company noted pressure in certain big-ticket, discretionary categories amid a challenging economic environment.
Exxon Mobil (XOM, Financial) announced the start of production from the Payara development on the Stabroek Block offshore Guyana, adding 220K gross barrels per day of oil production capacity. This marks the third oil development on the block, with more planned in the future.
BioCardia (BCDA, Financial) shares surged after receiving FDA approval for a Phase 3 clinical trial of its CardiAMP cell therapy for ischemic heart failure. The therapy has been designated as a breakthrough by the FDA and has shown promising interim results.
AMD (AMD, Financial) and ON Semiconductor (ON, Financial) received buy ratings from RothMKM, with the analyst highlighting AMD's differentiated portfolio and market share gains in the data center segment.
Canadian Solar (CSIQ, Financial) reported a decline in Q3 net income and revenues, missing analyst expectations, and provided a Q4 revenue forecast that was below consensus estimates.
J.P. Morgan's global markets strategy team found commodities attractive following a recent decline in oil prices, with strategist Marko Kolanovic maintaining an overweight position in commodities and closing out a longer bond position.
On Holdings (ONON) reported a significant year-over-year increase in Q3 revenue and raised its 2023 guidance, attributing the strong performance to its direct-to-consumer business growth.
