Think Thursday
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Market Data
Local
Global
*Data as of 4pm WAT
Market News
Local
Rising costs pose threat to manufacturers, says MAN - Punch
Increasing production costs are a significant challenge for manufacturers, warns the Manufacturers Association of Nigeria (MAN). This rise in costs could lead to job losses and factory shutdowns in the country. MAN expresses concern over factors such as inflation, energy, and transportation costs, which have all contributed to the growing expenses of production.
Global
IRS says Microsoft owes an additional $29B in back taxes - CNBC
Microsoft said the IRS notified the company it owes an additional $28.9 billion in back taxes. The company disagrees with the claims and says it will contest them in court, if necessary.
Biden weighs freezing $6B for Iran after Hamas attack on Israel - Bloomberg
Biden administration officials are leaving open the possibility of re-freezing $6 billion in Iranian oil money that was released as part of a prisoner swap amid growing bipartisan criticism after Iran-backed Hamas militants attacked Israel.
Weekly Investment Watchlist
Market Commentary:
Asia and Australia:
Most Asian equities ended higher on Thursday. Hong Kong led the region with strong gains in financial and banking stocks. Mainland Chinese indices also saw gains, although they were not as sharp. Seoul and Taipei had higher closing points, while Australia ended the day slightly up. Most of Southeast Asia performed well, except for Thailand, and India’s market remained flat. Japan experienced its fifth consecutive day of gains.
In Japan, Producer Price Index (PPI) inflation eased more than expected, and machinery orders slightly missed expectations. Import prices continued to fall for the fourth consecutive month. Board member Noguchi, in a speech, noted that inflation pressures stemming from import prices due to global inflation were showing signs of coming to an end. He also acknowledged core inflation running higher than expected, as indicated by the Outlook Report forecast revisions. He stressed the need for nominal wage growth to clearly exceed 2% on a trend basis in order to dispel Japan’s deep-rooted norm of zero price/wage growth.
China issued a notice prohibiting domestic brokerages and their overseas units from taking on new mainland clients for offshore trading. This measure is aimed at curbing speculation and boosting the local equity markets.
Europe, Middle East, Africa:
European equity markets ended higher, following the strength in Asia.
UK monthly activity data revealed the economy bounced back in August but also indicated stagflation. Gross Domestic Product (GDP) increased by 0.2% month-on-month, surpassing the consensus and reversing the previous month’s 0.6% drop. The rise was primarily driven by a 0.4% increase in services, while manufacturing and construction both declined. Despite the positive headline figure, the risk remains tilted towards a weaker third-quarter GDP print. The Bank of England recently revised its growth forecast lower, and today’s data is likely to reinforce the central bank’s pause in hiking for the next meeting.
Despite slowing inflation and rising costs, food companies Suedzucker (Germany) and CHR Hansen (Denmark) reported increased profits and positive outlooks. Both companies released earnings results and expressed optimism for the remainder of the year.
The Americas:
Headline Producer Price Index (PPI) for September increased by 0.5% month-on-month, which was higher than the consensus of 0.3% but lower than August’s 0.7% rise, which was the sharpest increase since June 2022. The annual PPI was up 2.2%. The headline figure was driven by a 3.3% monthly rise in energy prices. The Core PPI, excluding food and energy, increased by 0.3% month-on-month, exceeding the prior month’s 0.2% and meeting the consensus. The report noted a significant factor was the 13.9% jump in prices for deposit services, although there were some declines in airline services and auto retailing.
Delta reported positive results for Q3, with earnings per share (EPS) of $2.03, surpassing FactSet estimates of $1.95. Revenue was reported at $15.5 billion, exceeding the expected $14.55 billion. However, Delta reduced the higher end of its outlook due to higher fuel prices and higher-than-expected maintenance costs. The company also discussed slower international travel and a decline in corporate travel.
Domino’s Pizza earnings beat expectations, but revenue was impacted by weaker same-store sales (although international results were better). The company provided cautious outlook commentary, noting that global retail sales growth is expected to trend below its medium-term guidance.
Fastenal reported slightly better earnings and margins, highlighting sequential net sales growth driven by solid results from its Onsite locations, which more than offset softer end-market demand from manufacturing customers and lower revenues to construction/resellers.
Walgreens Boots reported better revenue, but earnings missed expectations. The midpoint of the full-year guidance was below Street estimates. Domestic pharmacy results were strong, but management flagged weakness in retail, reflecting macro-driven consumer pressure.
The Week Ahead:
Monday:
Tuesday:
Wednesday:
US Producer Price Index (PPI) rose 0.5%
Thursday:
Gross Domestic Product (GDP) (UK)
The US Consumer Price Index (CPI) stood at 3.7% in September
US initial jobless claims unchanged at 209,000
Friday:
UoM Consumer Sentiment (US)
Investment Tip of The Day
Maintain a Contingency Fund: In addition to an emergency fund, consider setting aside a contingency fund for unforeseen investment-related expenses, such as unexpected tax liabilities or repair costs for real estate holdings.
Meme of the Day
