STOCK MARKET UPDATES: Investors cautious ahead of jobs data, rail strike looms, Musk vs. Apple

Home for sale in Cherry Hill, N.J., Nov. 5, 2022

ECONOMY

US home prices tumble in September for third straight month

Mortgage rates that have doubled over the past year are sapping demand from the housing market, which saw prices decline for the third month in September.

U.S. single-family home prices slowed further in September as higher mortgage rates eroded demand, closely watched surveys showed on Tuesday.

The S&P CoreLogic Case Shiller national home price index dropped 0.8% month-over-month in September. Monthly house prices fell in July for the first time since late 2018.

House prices rose 10.6% year-on-year in September, slowing from August's increase of 12.9%.

POLITICS

Democrats could add $500B in new debt during final weeks of congressional control

Year-end spending and tax priorities could set up Democrats in Congress for a wave of legislation that adds hundreds of billions of dollars to the national debt.

The $31.3 U.S. national debt could climb by hundreds of billions of dollars before the end of the year as Democrats strive to pass spending and tax bills before Republicans take control of the House next year.

Some of these ideas, like extending the tax breaks, will win Republican support; however, none of them are likely to be paid for with spending cuts elsewhere, and that means more national debt.

Amazon logo outside its JFK8 distribution center in Staten Island, N.Y., Nov. 25, 2020. (Reuters/Brendan McDermid)

Amazon is planning its second bond sale of 2022, which may comprise as many as five different offerings.

The world’s largest online retailer plans to use the proceeds for general corporate purposes.

Moody’s assigned an A1 rating to the bonds; Fitch gave the notes an AA- rating. Both ratings are investment grade.

Moody’s said the company’s credit metrics are currently weak for the A1 rating, as Amazon funds committed acquisitions of approximately $6 billion in 2023 (1Life Healthcare, Inc. "One Medical" and iRobot Corp.). This, coupled with lower cash balances, increases its risk profile as the economy slows.

Fitch expects Amazon's growth to continue at a strong, albeit moderating, pace given the company's scale and some near-term softening macroeconomic trends, with approximately 10% to low-teens revenue growth expected annually.

Scientist looking into microscope (Reuters/Lukas Barth)

Boston Scientific Corporation said on Tuesday it will buy medical technology firm Apollo Endosurgery Inc for $417 million to expand its portfolio of gastric devices.

With debt, the deal is valued at about $615 million.

The offer of $10 per share in cash for Apollo Endosurgery represents a premium of nearly 67% to the stock's last close. Its shares were up 63% in premarket trading.

Apollo Endosurgery makes devices used in surgeries to manage gastrointestinal complications and aid in weight loss for patients suffering from obesity.The deal is expected to close in the first half of 2023.

Hibbett is tumbling in Tuesday trading. The sporting goods retailer missed Wall Street revenue and profit estimates.

Net sales for the 13-weeks ended Oct. 29, 2022, increased 13.5% to $433.2 million, lower than the estimate of $445.73 million.

Comparable sales increased 9.9% versus the prior year and increased by 51.7% compared to the 13-weeks ended Nov. 2, 2019.

Net income was $25.6 million, or $1.94 per diluted share, compared with net income of $25.2 million, or $1.68 per diluted share, for the 13-weeks ended Oct. 30, 2021. Profits of $2.51 per share were anticipated by the seven analysts providing estimates for the quarter.

The company reiterated its full year comparable sales and diluted earnings per share guidance despite “a number of business and economic challenges.”

Reuters contributed to this report.

Workers select and pack items during Cyber Monday at the Amazon fulfilment center in Robbinsville Township, N.J., Nov. 28, 2022. (Reuters/Eduardo Munoz)

LIFESTYLE

Cyber Monday spending hits record $11.3B

Cyber Monday spending reached a record high of $11.3 billion this year as retailers doled out heavy discounts in order to drive demand, according to new data.

Consumer spending on Cyber Monday rose 6% year over year to a record $11.3 billion, according to Adobe Digital Insights.

In the peak hour Monday, shoppers collectively spent $12.8 million per minute. However, the high spending figure was largely driven by the toy category where online sales surged 684% compared to an average day last month.

U.S. shoppers also spent a record $9.12 billion online on Black Friday, a report showed on Saturday, as consumers weathered the squeeze from high inflation and grabbed steep discounts.

Online spending rose 2.3% on Black Friday, Adobe Analytics said.

Reuters contributed to this report.

Citi Trends is higher in Tuesday trading. The specialty value retailer of apparel, accessories and home trends topped Wall Street revenue and profit estimates.

Fiscal third quarter total sales decreased 15.6% to $192.3 million year over year but increased 5.1% comparted to Q3 2019. The analyst estimate was $185.48 million.

Comparable sales decreased 18.3% compared to Q3 2021.

Net income was $24.6 million compared to $9m for the three months ended Oct. 29.

The company reported profits of 24 cents per share. Losses of -6 cents per share were anticipated by the three analysts providing estimates for the quarter.

Citi Trends expects low single digit increase in second half total sales compared to first half total sales.

Reuters contributed to this report.

AMC Networks announced that its Chief Executive Officer Christina Spade has stepped down from her role. The AMC Networks Board of Directors is currently finalizing who it will name as a replacement, with an announcement to follow.

AMC Networks Chairman James Dolan said: “We thank Christina for her contributions to the company in her CEO role and her earlier CFO role, and we wish her well in her future endeavors.”

Spade previously served as the company’s Chief Operating Officer and Chief Financial Officer.

The media and entertainment industry veteran previously held senior roles at ViacomCBS, CBS Corporation and Showtime.

She succeeded Matt Blank, who has been serving in a year-long role as Interim Chief Executive Officer of AMC Networks since last September.

Elon Musk is ready to do battle with the world's most valuable company as he helms Twitter.

LIFESTYLE

Musk says Apple stopped Twitter ads, threatens to 'withhold' it from app store

Elon Musk said Monday that tech giant Apple has "mostly" stopped advertising on Twitter. He also said Apple threatened to "withhold" Twitter from the app store.

Bitcoin, Ethereum and Dogecoin were all higher heading into Tuesday morning. (Getty Images)

Cryptocurrency prices edged higher early Tuesday with Bitcoin, Ethereum and Dogecoin all showing gains.

At approximately 5 a.m. ET, Bitcoin was trading at nearly $16,489 (+1.7%), or higher by $276.

For the week, Bitcoin was trading higher by nearly 2.8%. For the month, the cryptocurrency was lower by nearly 21.3%.

Ethereum was trading at approximately $1,215 (+3.88%), or higher by more than $45.20.

For the week, Ethereum was trading higher by nearly 5.6%. For the month, it was trading lower by approximately 24.85%.

Dogecoin was trading at $0.10269 (+8.16%), or lower by approximately $0.007749. 

For the week, Dogecoin was higher by more than 27.25%. For the month, the crypto was higher by nearly 12.85%.

Gasoline and diesel prices fell again overnight nationwide. (gasprices.aaa.com)

The nationwide price for a gallon of gasoline slipped Tuesday to $3.521. On Monday, the price was $3.546. On Sunday, the price was $3.555, according to AAA.

One week ago, a gallon of gasoline cost $3.636. A month ago, that same gallon of gasoline cost $3.761. A year ago, a gallon of gasoline nationwide cost $3.394.

Gas hit an all-time high of $5.016 on June 14, approximately 25 weeks ago.

Diesel declined early Tuesday as well, slipping to $5.199. On Monday, the nationwide price was $5.215.

On Sunday, the price was $5.228, according to AAA. 

One week ago, a gallon of diesel cost $5.286. A month ago, that same gallon of gasoline cost $5.311. A year ago, a gallon of diesel cost $3.64.

US stocks turned higher overnight after weekend protests in Chinese cities over COVID-19 controls were rumored under consideration for relaxation. (Associated Press)

US stocks turned higher late Tuesday morning after whipsawing late Monday night as Chinese stocks moved higher days after weekend COVID-19 demonstrations in various Chinese cities took place. 

Although market sentiment has been weighed down by the recent demonstrations in China, some analysts noted calm could return in coming sessions.

The world's second largest economy has been stifled by a “zero COVID” policy which includes lockdowns that continually threaten the global supply chain. The unrest has stoked worries on Wall Street that if Chinese leader Xi Jinping cracks down further on dissidents there or expands the lockdowns, it could slow the Chinese economy, which would hurt oil prices and global economic growth, said Sam Stovall, chief investment strategist at CFRA. 

On Monday, more than 90% of the stocks in the S&P 500 closed in the red, with technology companies the biggest weights on the broader market. Apple, which has seen iPhone production hit hard by lockdowns in China, fell 2.6%. 

Anxiety remains high over the ability of the Federal Reserve to tame inflation by raising interest rates without going too far and causing a recession. The central bank’s benchmark rate currently stands at 3.75% to 4%, up from close to zero in March.

It has warned it may have to ultimately raise rates to previously unanticipated levels to rein in high prices on everything from food to clothing. Federal Reserve Chair Jerome Powell will speak at the Brookings Institution about the outlook for the U.S. economy and the labor market on Wednesday. 

The Conference Board will release its consumer confidence index for November on Tuesday. That could shed more light on how consumers have been holding up amid high prices and how they plan on spending through the holiday shopping season and into 2023. 

The U.S. government will release several reports about the labor market this week that could give Wall Street more insight into one of the strongest sectors of the economy.

A report about job openings and labor turnover for October will be released on Wednesday, followed by a weekly unemployment claims report on Thursday. The closely watched monthly report on the job market will be released on Friday. 

Meanwhile, Asian shares were mostly higher Tuesday as jitters over protests in China set off by growing public anger over COVID-19 restrictions subsided. Hong Kong’s Hang Seng jumped 4% to 17,981.31, while the Shanghai Composite added 2.3% to 3,148.17. Japan's Nikkei 225 lost 0.5% to 28,016.58. Australia's S&P/ASX 200 gained 0.3% to 7,249.80. South Korea's Kospi added 0.8% to 2,427.13. 

Japanese government data released Tuesday showed that the unemployment rate for October was unchanged from September at 2.6%.

Separately, data released by another ministry showed a slight increase in the number of available jobs per job-seeker at 1.35. The increase has continued for 10 months. Hiring was up in anticipation of tourists returning in droves to Japan.

Borders that have been basically closed during the coronavirus pandemic have reopened at a time when the declining value of the yen against the U.S. dollar and other currencies make Japan an attractive destination for tourists.

Oil prices jumped Tuesday as hopes China would relax its COVID-19 controls following a weekend of rare protests against them. (Getty Images)

Oil jumped on Tuesday, buoyed by hopes that China would relax its COVID-19 controls after rare protests against the country's zero-COVID strategy over the weekend in big Chinese cities. 

Brent crude futures advanced $1.4, or 1.7%, and traded at $84.57 a barrel at 0645 GMT. U.S. West Texas Intermediate (WTI) crude futures rose $1.17, or 1.5%, to $78.39 a barrel. Both benchmarks gained more than $2 earlier in the day. 

China held a news conference on COVID prevention and control measures at 3 p.m. (0700 GMT) on Tuesday amid record COVID infections and protests in Shanghai and Beijing. 

Asian shares also rallied as unsubstantiated rumours swirled that the unrest might prompt a loosening of the COVID restrictions. Similar rumours have caused markets to zig-zag in recent weeks. 

The rare street protests in cities across China over the weekend were a vote against President Xi Jinping's zero-COVID policy and the strongest public defiance during his political career, China analysts said.

Beijing has stuck with the zero-COVID policy even as much of the world has lifted most restrictions. 

Oil prices are also supported by the expectation that major oil producers would adjust their production plans at the upcoming meeting. 

The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, known as OPEC+, are set to hold a meeting on Dec. 4.

Analysts at Eurasia Group suggested in a note on Monday that weakened demand out of China could spur OPEC+ to cut output. OPEC+ started to lower its output target by 2 million barrels per day (bpd) in November, aiming to shore up oil prices. 

Markets are also assessing the impact of an upcoming Western price cap on Russian oil. Group of Seven (G7) and European Union diplomats have been discussing a cap of between $65 and $70 a barrel, with the aim of limiting revenue to fund Moscow's military offensive in Ukraine without disrupting global oil markets.

Russia calls its actions in Ukraine "a special operation.”