Netflix up, Tesla down after quarterly reports

Federal Open Market Committee

Jerome Powell and several Fed officials are due to speak today in New York. The last Federal Open Market Committee (FOMC) meeting concluded with the decision to leave the lending rate unchanged in a range of 5.25% to 5.50% to assess how the economy was evolving. Since then, US job growth and solid retail sales have been questioning the impact the Fed tightening campaign has on inflation.

A Reuters poll of more than 100 economists published yesterday showed more than 80% expect no rate hike at the next meeting, and most also believe the Fed is done with rate hikes. However, the Fed may wait longer than previously thought before cutting it, according to the same economists. Around 45% of them now see no rate reduction until the second half of next year or later; that is up from 29% in the last poll.

Japan's trade surplus

In Japan, the trade balance unexpectedly shifted to a surplus in September. 62.44 billion, compared to a deficit of ¥2 billion in September last year and expectations of a deficit of ¥425 billion. It was the first trade surplus in three months, as exports rose by 4.3% year-over-year (YoY), growing for the first time since June. Among these, car exports rose 30.4% YoY. Meanwhile, imports to Japan shrank for a sixth straight month, by 16.3%, worse than market forecasts of 12.9%.

Deliveroo

On the corporate front, Deliveroo maintained its finacial year (FY) guidance after posting a 5% increase in gross transaction value in Q3. Dunelm reported sales of £390 million, up 9%.

Nokia and Nestle

Elsewhere in Europe, Nokia will cut up to 14,000 jobs as part of a new cost savings plan after third-quarter sales dropped by 20%. Nokia is targeting between €800 million and €1.2 million in cost savings by 2026. Nestle posted lower-than-expected nine-month sales growth as higher product prices hurt volumes. Renault revenues rose by 7.6% in the third quarter to €10.51 billion. Sales growth this year comes after four years of consecutive declines.

Tesla

Tesla shares dropped last night in all sessions on the IG platform after the EV company reported third-quarter results. Adjusted earnings came in at 66 cents per share vs. 73 cents expected, down from $1.05 in the same quarter last year. Revenue rose 9% to $23.35 billion from $21.45 billion a year ago; however, it is below estimates of $24.1 billion and marks the slowest pace of growth in more than three years.

Tesla's gross margin dropped to 17.9% in the quarter ended in September, compared with 25.1% a year earlier, when it had yet to start cutting prices. In Tesla's conference call, Elon Musk expressed concerns about the impact of high interest rates on car buyers. He also said that he was hesitating on the group's plans for a factory in Mexico as it gauges the economic outlook.

Netflix

It was a great night out last night for streaming giant Netflix after it reported a bonanza Q3. Earnings came in at $3.73, compared to estimates of $3.49. It added 8.76 million subscribers in the third quarter, far exceeding analysts' forecasts and boosting its overall subscriber base to 247.2 million.

Alcoa

Alcoa shares fell in extended trading after reporting a quarterly adjusted loss of $1.14 per share. The mean expectation of nine analysts for the quarter was a loss of $1.02 per share. Revenue fell 8.7% to $2.60 billion from a year ago, in line with forecasts. On Thursday, the market awaits reports from American airlines, AT&T, and Philip Morris.