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Musk Buys Twitter, Amazon Shocks, PCE Prices - What's Moving Markets

Economy Oct 28, 2022 06:59AM ET
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By Geoffrey Smith

Investing.com -- Elon Musk finally closes his acquisition of Twitter, a day before a court deadline. Amazon plunges after missing forecasts for the third quarter and giving disappointing guidance for the current one. Stocks are under pressure as a result, but resilient numbers from Apple are helping to steady the ship. Eurozone inflation goes haywire again, only a day after the European Central Bank got the market's hopes up for a quick end to policy tightening, and Exxon Mobil and Chevron post a monster third quarter thanks to high crude prices. Here's what you need to know in financial markets on Friday, 28th October.

1. Musk closes Twitter deal, fires top management

Elon Musk closed his $44 billion deal to buy Twitter (NYSE:TWTR) and – according to various reports – immediately fired CEO Parag Agrawal and CFO Ned Segal.

Musk’s other first immediate act was to reverse the previous management’s policies of lifetime bans, paving the way for ex-President Donald Trump to return to the social media platform that he dominated until the start of last year.

It still isn’t clear how Musk has cobbled together the money for the deal, which was completed only a day ahead of a court-imposed deadline. Crypto exchange Binance confirmed that it had joined a consortium of equity buyers led by the Tesla CEO.

2. Amazon shocks with earnings miss, weak guidance

Amazon (NASDAQ:AMZN) rounded off a wretched week for Big Tech, falling as much as 20% in after-hours trading on Thursday after falling short of expectations for the third quarter earnings and guiding well below consensus for the current one.

CEO Andy Jassy told a conference call that the group expects revenue of between $140 billion and $148 billion for the fourth quarter, some $11 billion below consensus. Analysts were also spooked by the slowdown in growth at the AWS Cloud-hosting business, which corroborated the weakness detailed by rival Microsoft (NASDAQ:MSFT) earlier in the week.

Amazon opened marginally off its lows in premarket, but is still set to open at its lowest level in two and a half years.

The story was slightly more upbeat at Apple (NASDAQ:AAPL), which is set to open slightly higher after recording decent iPhone sales in the third quarter. Reports of fresh trouble in the Chinese iPhone assembly plants Apple uses haven't changed that.

3. Stocks set for lower opening as Amazon weighs; consumer data dump eyed

Amazon’s weak update is casting a pall over U.S. stock markets, which are set to open lower later.

By 06:30 ET (10:30 GMT), Nasdaq 100 futures were down 1.1%, on track for a 2.3% drop on the week after serial disappointments from the megacaps over the course of the week. S&P 500 futures were down 0.5%, while Dow Jones futures, bolstered by old-economy value stocks, outperformed with a more gentle decline of 0.1%, or 16 points.

The morning is set to be dominated by monster quarters reported by oil and gas giants Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX), while Colgate-Palmolive (NYSE:CL), Charter Communications (NASDAQ:CHTR), Aon (NYSE:AON) and AbbVie (NYSE:ABBV) are also set to report.

The data calendar highlight, meanwhile, will be the release of personal income and spending data for September, along with the price index for personal consumption expenditures, which remains the most reliable guide to actual inflation trends in the economy. There's also the Michigan consumer sentiment index due at 10:00 ET and pending home sales data for September.

4. Eurozone inflation forces quick ECB rethink; national GDP reports mixed

Shocking inflation data in the Eurozone prompted an abrupt end to the rally in bonds and stocks that had started when the European Central Bank slightly softened its language about further interest rate increases.

Prices rose an eye-watering 4% on the month in October in Italy and by 1% or more in both France and Germany with the impact of energy price rises in all their various forms once again being underestimated by analysts ahead of time.

Various Eurozone countries also issued third-quarter GDP data, with France and Spain falling short of expectations but Germany posting a better-than-expected 0.3% gain from the previous quarter.

5. Exxon, Chevron post massive quarter on surging oil prices

Crude oil prices edged lower overnight but are set to end the week near their highs.

Earlier, Exxon Mobil reported profit some 15% ahead of consensus forecasts, while Chevron’s $11.2 billion profit also exceeded expectations.

By 06:45 ET, U.S. crude futures were down 0.9% at $88.31, while Brent futures were down 0.6% at $94.50.

Baker Hughes’ rig count and the CFTC’s positioning data round the week off later.

Musk Buys Twitter, Amazon Shocks, PCE Prices - What's Moving Markets
 

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Comments (6)
Chaka Diarra
Chaka Diarra Oct 28, 2022 10:39AM ET
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bonjour c'est comment je besoin de travail
Tre Hsi
Tre Hsi Oct 28, 2022 9:15AM ET
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"Crypto exchange Binance confirmed that it had joined a consortium of equity buyers led by the Tesla CEO."   -  who in their right mind would invest in Twitter at a market cap of $44B???  I mean Musk had to because he committed before the stock market took a dive, but why would anyone do it now?
Casador Del Oso
Casador Del Oso Oct 28, 2022 9:04AM ET
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second coming of the dott-c o m. crash
Steven ML
Steven ML Oct 28, 2022 8:07AM ET
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Did you see the drop in the Nasdaq futures immediately after Amazon released earnings? I'm going to be very cautious today
Ma Lu
Ma Lu Oct 28, 2022 8:03AM ET
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The week will end again with heavy losses for the tech sector / Nasdaq, like many other weeks of 2022. This raises the general question if further investments in this sector are worth considering. Probably the big players of the future will be different companies than today!
John Whitfield
John Whitfield Oct 28, 2022 7:54AM ET
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aka theyre holding the market flat for monthly option expiration coming up on monday.
Jaeor Yu
Jaeor Yu Oct 28, 2022 7:54AM ET
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Wont be so easy
 
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