BP shares: Q3 misses estimates, buyback programme extended

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Bank of Japan

As widely expected, the Bank of Japan (BoJ) maintained its -0.1% target for short-term interest rates and for the 10-year government bond yield at around 0% set under yield curve control (YCC).

But the bank increased its flexibility on yield curve control, by re-defining 1.0% as a loose "upper bound" rather than a rigid cap. It also removed a pledge to defend the level with offers to buy unlimited amount of bonds.

Also in Japan, factory output rose 0.2% in September from the previous month, versus a median market forecast for a 2.5% gain, data showed on Tuesday. And retail sales rose 5.8% in September from a year earlier, marking a 19th straight month of gains and roughly in line with the median market forecast for a 5.9% increase.

China's manufacturing PMI contraction sparks economic uncertainty

China's manufacturing PMI reported a surprise contraction in October, indicating uncertainty over the economic recovery amid calls for more policy support. The official manufacturing number fell to 49.5 in October, down from 50.2 in September, taking the reading back into contraction.

Meanwhile, non-manufacturing PMI stood at 50.6 in October, compared to 51.7 in September.

Eurozone

In France, the third quarter (Q3) GDP growth rate rose by 0.1%, in line with expectations. Germany retail sales unexpectedly fell by 0.8% in September month-on-month (MoM). A 0.5% rise was expected.

The eurozone GDP growth rate was expected to be flat in Q3, after 0.1% in Q2. CPI growth is forecast to fall to 3.1% in October year-on-year (YoY), from 4.3% the previous month.

Macroeconomic overview

In the US, a few macroeconomic indicators are due. Among them, S&P/Case-Shiller home price and CB consumer confidence.

BP posted an adjusted net profit on $3.29 billion, missing estimates of $4.05Bln, and announced a further share buyback programme of $1.5Bln. In the fourth quarter, BP expects oil prices to be supported by OPEC+ production restrictions and the continued demand rebound.

Stellantis sales rose 7% in the third quarter to €45.1Bln, versus analyst expectations of €43.7Bln. The six-week strikes in the United States over salary increases had an overall negative impact on the group's revenue of around €3Bln. CFO Natalie Knight said in a media call that these strikes would cost Stellantis less than €750 million in terms of profitability, adding that was the smallest impact among the Detroit Three.

AB InBev, the world's largest brewer, posted a mixed report for the third quarter. Sales were up 5% to $15.57Bln in Q3, marginally better than expected. Company provided consensus had on average expected growth of 4.7%. Total volumes declined by 3.4% in the period, with own beer volumes down by 4.0% and non-beer volumes up by 1.4%. The EBITDA margin contracted by 29 bps to 34.9%.

In the US, Pfizer is expected to deliver a year-over-year decline in earnings and lower revenues at lunchtime. The drugmaker is expected to post a quarterly loss of 8 cents per share. Revenues are expected to be $13.33Bln, down around 40% from the year ago quarter.

Two weeks ago it slashed its full-year revenue forecast by 13% and said it would cut $3.5 billion worth of jobs and expenses due to lower-than-expected sales of its COVID-19 vaccine and treatment.

Caterpillar, seen as a bellwether for the mining sector, is expected to post an increase in earnings and revenue in the third quarter. EPS should come in at $4.8, compared to $3.95 a year ago. Revenue is forecast to rise by about 10% to $16.56Bln.

And after the US closing bell, AMD reports. The Street expects the chipmaker to post earnings of 68 cents per share on revenue of $5.7Bln in the third quarter. This matches AMD's expectations. In August, AMD guided Q3 revenue of $5.7 billion, plus or minus $300 million, and a non-GAAP gross margin of approximately 51%.