Before the bell: Halloween

On Wall Street, the stocks of old tech giants are declining, while shares of relatively younger sector peers are skyrocketing.

The S&P 500 fell by 0.3%, and the Nasdaq dropped by 0.6%. However, these small losses are nothing compared to the large after-hours declines following the earnings reports from some tech giants. Microsoft fell 3.7% after hours. The software giant posted quarterly earnings of $3.30 per share, exceeding analysts’ expectations of $3.10, but disappointed with its cloud forecast. Meta is also down 3.1% after hours. Although its profit of $6.03 per share was higher than expected ($5.21), Meta warned that AI is far from profitable. Reddit (+42%) provided some fireworks with an unexpected profit announcement. The social media platform saw a substantial increase in advertising revenue, a trend also visible at Snap (+16%). In the pharmaceutical sector, Eli Lilly (-6.3%) took a hit after a profit warning that reduced its expected annual earnings from $16.35 to $13.27 per share. The Euro Stoxx 50 lost 1.3% yesterday, with Melexis (-12.7%) taking an even bigger hit following its profit warning. On the Amsterdam exchange, ASMI rose 5.4% after solid results.

In Tokyo, the market is down slightly (-0.3%), while Hong Kong is showing a modest gain (+0.2%). Much of today’s trading will again focus on upcoming earnings releases, including those from AB InBev, Argenx, Estée Lauder, ING, Linde, Mastercard, Recticel, Shell, TotalEnergies, and Uber. After the close of Wall Street, we’ll also get results from Amazon, Apple, and Intel.

Did you read?

Social media is dominating the advertising market more than ever, as Reddit confirmed yesterday. Until now, the American news site, founded in 2005 and launched on the stock market just six months ago, rarely posted profits. Analysts had expected a quarterly loss of $0.23 per share, but Reddit surprised with earnings of $0.16 per share. This was good news for those who bought in at $34 per share in March. On Tuesday, shares were trading at $81.74, and yesterday’s closing price was $116.05 (+42%). Reddit has 97 million daily active users, an increase of nearly 50%. No wonder advertisers are more interested—Reddit’s ad revenue rose by 56%.

The glass is half empty

Whether AB InBev posts good or bad results, shareholders always have the option to grab a pint from their own company to either celebrate or drown their disappointment. Expectations were high for the world’s largest brewer, perhaps too high. The lack of growth in beer sales has been known for years, but the 2.4% decline was larger than anticipated. Due to this volume drop, revenue growth is limited to 2.1%, while operational profit increased by “only” 7.1%. For the first three quarters of the year, profit growth is still at 7.6%. For the full year, AB InBev’s management has raised its profit growth outlook from 4–8% to 6–8%. Will the stock continue to underperform? The company may still benefit, as AB InBev just announced a $2 billion share buyback program.

Did you know…

that the world’s largest brewer still sold 148 million hectoliters of beer in a single quarter? On average, 446,860 pints per minute are poured, day and night, from beer brewed by AB InBev.

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