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Breakfast Bites - Chips get chipped
Rise and shine everyone.
The big news is ASML released their results a day early, by mistake. It came as an unwelcome surprise to investors when the report revealed third-quarter bookings of €2.6 billion ($2.8 billion), falling far short of analysts’ average estimate of €5.39 billion, a key indicator of future revenue.
ASML shed more than €60 billion in value after cutting outlook, according to Bloomberg and SAP overtook the company as Europe’s most valuable technology firm, for the first time since 2020.
There are mixed reviews about what this means for chip makers. Nvidia took a bit of a beating in yesterday’s regular trading and global chip stocks lost about $420B in market cap, but as far as I can see this morning, Nvidia, AMD, and AVGO are all trading higher in the pre-market.
UK Inflation below 2%
The UK’s annual inflation rate dropped to 1.7% in September 2024, the lowest since April 2021, down from 2.2% in the previous two months and below forecasts of 1.9%. The decline was driven mainly by transport costs, including airfares and motor fuels, which fell by 2.2% compared to a rise of 1.3% previously. Meanwhile, services inflation, a key concern, eased to 4.9%, the lowest since May 2022, from 5.6% in August.
US Expectations
The US NY Fed’s 1-Year Expectations Survey released yesterday revealed that consumer expectations of credit turbulence reached their highest point since April 2020. Among individuals earning over $100K, the probability of delinquency hit a 10-year high. The average anticipated likelihood of missing a debt payment in the next three months increased for the fourth consecutive month, rising to 14.2% in September, up from 13.6% in August.
Median inflation expectations remained steady at 3.0% for one year, but rose to 2.7% (from 2.5%) for three years. In the labor market, the average probability of voluntarily leaving a job in the next 12 months rose to 20.4% from 19.1%, while the perceived likelihood of finding a new job after a loss slightly increased to 52.7% from 52.3%.
Earnings
LVMH reported weaker sales in China, and the stock was down almost 7.5%, taking prices back to 2022 levels.
Yesterday, Bank of America and Citigroup both exceeded expectations, reporting higher revenues driven by consumer banking and credit card activity. UnitedHealth Group also performed well, posting robust earnings due to increased enrollment in its insurance plans. Meanwhile, Johnson & Johnson reported mixed results with a slight revenue miss, though its pharmaceutical segment remained strong.
Calendars
(news taken from Reuters, FT, Bloomberg; Calendar from Trading Economics)
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