Before the bell: few saints on the stock market

Markets took a hit yesterday, and that pessimism is continuing in Tokyo this morning. However, there are gains in China, and Amazon’s stock may soon rise.

Today is a holiday, but it’s business as usual on the markets. Usual? Yesterday was anything but, more like a Halloween hangover. On Wall Street, the S&P 500 dropped by 1.9%, and the Nasdaq fell by 2.8%. Earlier in the day, European markets had already posted an average loss of 1.2%. An index is far less volatile than the individual stocks that make it up. Most listed companies are actually posting better-than-expected quarterly results, but it’s the gloomy outlooks that investors aren’t liking. We told you yesterday morning that Meta (-4.1%) and Microsoft (-6.1%) were likely to fall sharply, and these two heavyweights dragged the indices down. Last night, Amazon (-3.3%) and Apple (-1.8%) released their quarterly results. Apple was somewhat disappointing, but Amazon seems to be performing well. This e-commerce giant could bring some sunshine to the markets today, although it will take quite a bit of warmth to bring the market temperatures back to a comfortable level. In Brussels, losses are relatively mild, with the Bel20 down just 0.4%, thanks to the strong performances of D’Ieteren (+4.5%) and Argenx (+5.9%), which offset AB InBev’s weakness (-5.8%).

The mood is also somber on the Japanese stock market. The Topix index is down 2.5% this morning. However, in Hong Kong, stock prices are up an average of 1%. U.S. employment figures will be released later. A weaker job market usually makes investors hopeful for lower interest rates. We’ll see if that’s the case today. Oil companies Chevron and ExxonMobil will report their results before the market opens.

In the Clinique

It’s not just American tech stocks that are struggling. Yesterday, Estée Lauder shares fell by 20.9%. The company is one of the world’s largest producers of makeup, skincare, haircare, and fragrance products. Revenue fell by 4% “due to lackluster demand from Chinese consumers.” While sales dropped by 2% in the U.S., Europe, and the Middle East, revenue plummeted by 11% in Asia. Management stated that the figures are in line with expectations, but the sharp drop in the share price is mainly due to the company retracting its forecast for the rest of the fiscal year (ending June 30) and lowering its dividend. Things will likely get worse before Estée Lauder—hopefully—recovers. Shareholders have already had to be patient; at the end of 2021, their shares were worth $370 each, while yesterday they were trading at only $69.

On cloud nine

See the smile in Amazon’s logo? It’s the same one you’ll see on its shareholders’ faces today. Amazon is doing exceptionally well, as revealed by the results the tech giant published after hours yesterday. In the third quarter, Amazon’s cloud business grew by 19%, driving an 11% increase in total revenue year-over-year. This exceeded both the company’s own forecast and analysts’ average estimates. The higher sales also boosted profits. Operating income rose from $11.5 billion to $15 billion, while net profit climbed from $9.9 billion to $15.3 billion. Amazon earned $1.43 per share, up from $0.94 a year ago. For the current quarter, management expects operating income of $16–20 billion, compared to $13.2 billion in the fourth quarter of last year. Amazon’s stock rose by 6% after hours.

Did you know…

that today is not a holiday for the stock markets? Trading continues all day, even on Euronext.

This article was translated from Dutch and was originally published on Spaarvarkens.be.