PSYCHOLOGY · LEAD
A merger remark lifted two share prices, and three companies that beat their forecasts fell anyway. Markets grade results against what people were told to expect.
On Wednesday, the most expensive sentence on Wall Street was not in an earnings release. After SpaceX posted its first profit as a listed company, Elon Musk said a merger of SpaceX and Tesla would be "a good idea". SpaceX closed 7.8% higher. Tesla, which had not yet reported a single number for the quarter, rose 3.4%. A remark about a deal that does not exist moved a carmaker's shares more than many quarterly results move a share price.
Then the numbers arrived, and the mood went the other way. Tesla beat forecasts on both lines: 48 cents of adjusted earnings per share against 43 cents expected, and revenue of $28.05 billion against $27.88 billion. Its shares first rose a little after the close and then slipped, trading about 2–3% lower in the evening. Cboe noted that the fall came before the conference call had even started. IBM also beat on earnings and revenue; its shares "initially popped" and were last down more than 3%. Lam Research guided slightly above estimates and dropped more than 5%. Earlier in the day, AT&T beat, raised its outlook and closed 6.5% lower.
Psychology & Behaviour · 4 min · Read the piece →
MARKETS · DESK NOTE Chart
The S&P 500 is on course for its best month since April, with the US 10-year yield still at 5.13%. Underneath the index, more Nasdaq stocks hit new lows than new highs.
Markets & Macro · 2 min · Read the piece →
GEO-ECON · DESK NOTE
The full count for Wednesday came in at ten AIS-visible crossings of the Strait of Hormuz. Overnight Iran's foreign minister set out his terms in a newspaper. One of those is a ledger, the other an opening bid.
Geo-economics · 2 min · Read the piece →
POLITICS · THE ANNEX
Germany's new tobacco tax law, read in the Federal Law Gazette itself. The mistake everyone is talking about sits in one short article; the reason it bites sits in a single letter of the tariff.
Politics & Institutions · 2 min · Read the piece →
ENERGY · DESK NOTE Chart
Thursday's German power cleared at €148.61 a megawatt hour, 30% below Wednesday. Nobody gave a speech about it. The forecast simply had twice as much wind and sun in it.
Energy & Industry · 2 min · Read the piece →
MONEY · PODIUM VS PRINT Chart
A Bank of Japan deputy governor told parliament that underlying inflation is quite close to target, and argued for more rate rises. The bank's own six staff measures for August run from 1.3% to 2.6%. He is right on average, and the average is the argument.
Money, FX & Committees · 2 min · Read the piece →
ORDINARY · DESK NOTE
Gas for a household signing today costs 28% more than in January; electricity 6% more. People in running contracts have not felt it yet, says the industry's own count. The letter is the thing to watch.
Ordinary & Inherited Life · 2 min · Read the piece →
TECH · DESK NOTE
Meta's third-quarter revenue beat forecasts by more than a billion dollars. Its free cash flow was negative for the quarter, and it announced a new class of non-voting shares to help pay for what comes next.
Tech & Compute · 2 min · Read the piece →
HEALTH · DESK NOTE
Congo's latest situation report has 509 patients in hospital in North Kivu and 410 places in its treatment and transit centres. The other provinces have empty beds. The outbreak's next problem may be logistics more than medicine.
Health & Care · 2 min · Read the piece →
SECURITY · DESK NOTE
Demonstrations are banned in central Paris and Lyon on Thursday. At ten, the president sits down with the intelligence services to go over what went wrong on 17 October. The orders are precise; the review is the part that will last.
Security & Order · 2 min · Read the piece →
CLIMATE · DESK NOTE
Britain's Met Office named the autumn's first storm two days ahead and raised an amber warning for Cornwall a day ahead. France has fourteen départements in yellow for Thursday. A warning that comes early is the cheapest kind.
Climate & Weather · 2 min · Read the piece →
