Early Morning Call: FTSE 100 down as Halifax house price index falls

Equity market overview

Better than forecast job creations in the US gave a boost to equity markets.

The S&P 500 ended Friday’s session up 1.36%. Nonetheless, the three benchmarks posted weekly losses. Tech stocks recorded the worst performances, sending the Nasdaq lower 5.7% on the week.

In the Asia Pacific region, equity markets followed the US's lead.

For the first time since May 2020, China exports and imports simultaneously fell last month. Exports unexpectedly declined by 0.3% from a year earlier, after a 5.7% gain in September, and well below analysts' expectations for a 4.3% increase. It was the worst performance since May 2020. Imports declined 0.7% from a 0.3% gain in September, below a forecast 0.1% increase.

The overall trade figures resulted in a trade surplus of $85.15 billion, missing a forecast of $95.95 billion.

European indices open today’s session in the red.

In the UK, the Halifax house price index fell by 0.4% in October month-over-month (MoM). Year-on-year (YoY), the house price index increased by 8.3%, its lowest annual increase since December 2021.

Earnings

Ryanair posted its largest ever after-tax profit for the first half (H1) of its financial year. Europe's largest airline by passenger numbers earned €1.371bn in the period, missing however estimates of €1.385bn. Ryanair said it was hopeful it could deliver an after-tax profit of between €1 billion and €1.2 billion for the year to March 31.

On Sunday, Apple signalled that a significant production cut at a plant in China hit by Covid will impact its iPhone 14 shipments, while reiterating that demand for its latest phones remained strong.

But earlier this morning, Bloomberg News reported that Apple expects to produce at least three million fewer iPhone 14 handsets than originally planned, due to softer demand for some iPhone 14 models.

According to the Wall Street Journal, Meta Platforms is planning to begin large-scale layoffs this week. Thousands of employees will be affected. Meta CEO, Mark Zuckerberg, had already warned: "In 2023, we're going to focus our investments on a small number of high priority growth areas. So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organisation than we are today.”

Currently, Meta Platforms employs over 83,000 people worldwide.

Lyft is set to report earnings after the market close. Analysts expect earnings of eight cents per share on revenue of $1.06 billion. During the same quarter a year ago, the company posted earnings of five cents per share on revenue of $862.68 million. Investors will focus particularly on the number of active users.

Lyft enjoyed a strong rebound in the first and second quarters and ended the second quarter (Q2) with 19.86 million active riders, generating an active revenue of $49.89 per active rider.

Tomorrow, Walt Disney is expected to report earnings of 59 cents per share on revenue of $21.38bn. Disney shares have been underperforming recently. The stock is down some 44% from its 52-week high. Investors are wary of the stock because of the slowdown in consumer spending.

The market will be focused on the performance of Disney+, especially after strong third quarter (Q3) earnings from Netflix. Current company expectations at Disney are of between 230 and 260 million subscribers by the end of 2024. The company has now just over 152 million subscribers, which means that it will have to make substantial investments if it wants to reach that two-year target, which could really weigh on its profits.

On Wednesday, Beyond Meat is forecast to post a loss of $1.14 per share, on revenue of just over $98m, to be compared with a loss of 87 cents per share on revenue of $106.43 million for the same quarter a year ago. The stock has lost 80% of its value so far this year.

Another stock that has lost a lot of ground this year is WeWork. The group is expected to post earnings on Thursday. Analysts expect a loss per share of 53 cents, on revenue of $824m. The stock trades at $2.60, from over $9 at the beginning of the year.