STOCK MARKET NEWS: Fed rattles investors, Musk slashing Twitter jobs, Powerball jackpot

Twilio is lower in extended trading. The provider of programmable communication tools issued fourth quarter guidance.

Revenue is expected to come in between $995 million to $1,005 million, compared to third quarter revenue of $983 million.

Organic growth is expected to be 18% to 19% compared to 32% year-over-year in the third quarter.

Third quarter results did top Wall Street estimates.

On a per-share basis, the San Francisco-based company said it had a loss of $2.63. Losses, adjusted for stock option expense and asset impairment costs, came to 27 cents per share.The results beat Wall Street expectations. The average estimate of 12 analysts surveyed by Zacks Investment Research was for a loss of 39 cents per share.

The company posted revenue of $983 million in the period, also exceeding Street forecasts. Eleven analysts surveyed by Zacks expected $969.2 million.

The Associated Press contributed to this report.

Carvana logo in an illustration taken June 27, 2022. (Reuters/Dado Ruvic)

Carvana Co on Thursday reported a wider third-quarter loss as elevated car prices and higher interest rates dented demand for used cars.

The used-car retailer is facing a challenging macroeconomic environment, with global supply constraints and chip shortage causing car prices to remain high. It has taken a slew of cost control measures.

The company, famous for its car vending machines, decided to lay off around 2,500 employees, or 12% of its workforce, earlier this year, in a move to control costs as the macro environment turned gloomy.

Net loss for the Tempe, Arizona-based company widened to $2.67 per class A share in the quarter from $0.38 per class A share a year earlier, while gross profit per unit in the quarter fell to $3,870 from $4,672, a year earlier.

Carvana's revenue fell 3%% to $3.39 billion.

Warner Bros logo during the Cannes Lions International Festival of Creativity in Cannes, France, June 22, 2022. (Reuters/Eric Gaillard)

Warner Bros. Discovery reported an 8% drop in quarterly revenue on Thursday, hurt by cuts in advertising budgets at businesses struggling to cope with decades-high inflation.

The company, home to hit franchises such as "Batman" and "Euphoria", added 2.8 million new streaming subscribers in the third quarter, bringing its total count to 94.9 million. It aims to reach about 130 million global subscribers by 2025.

Revenue was $9.82 billion for the third quarter ended Sept. 30. Analysts on average expected revenue to come in at $10.37 billion, according to Refinitiv data.

The company said adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) was down 8% to $2.42 billion in the third quarter.

Block, Inc. on Thursday reported a loss of $14.7 million in its third quarter.

On a per-share basis, the San Francisco-based company said it had a loss of 2 cents. Earnings, adjusted for one-time gains and costs, came to 42 cents per share. The results beat Wall Street expectations.

The average estimate of 11 analysts surveyed by Zacks Investment Research was for earnings of 23 cents per share.

The mobile payments services provider posted revenue of $4.52 billion in the period, also beating Street forecasts. Nine analysts surveyed by Zacks expected $4.48 billion.

PayPal logo on an office building in Berlin, Germany, Mar. 5, 2019. (Reuters/Fabrizio Bensch)

Online payments company PayPal Holdings Inc on Thursday posted a jump in third-quarter revenue, benefiting from a strong rebound in online shopping as consumers return to their pre-pandemic spending.

The results follow upbeat earnings from bigger payment giants Visa Inc and American Express that underscore the strength in U.S. consumer spending, despite high inflation and rising interest rates.

PayPal's net revenue jumped 12% on an adjusted basis to $6.85 billion in the quarter.

Payment volumes rose 14% to $337 billion on an adjusted basis, closely mirroring Visa's 10% jump this quarter.

Doordash delivery bag in Brooklyn, New York City, May 9, 2022. (Reuters/Andrew Kelly)

Food delivery company DoorDash Inc said orders surged to a record high in the third quarter as people stuck to their pandemic-era habits despite rising inflation and steeper prices, helping it beat Wall Street targets for revenue.

Even though dining out has resumed in force, people are still ordering food online from the comfort of their homes like they did during lockdowns.

DoorDash recorded 439 million orders in the quarter and a 30% rise in gross order value — the total value of all app orders and subscription fees — to $13.53 billion.

It forecast fourth-quarter gross order value of between $13.9 billion and $14.2 billion, and reiterated full-year expectations for the key industry metric.

The company's revenue rose 33% to $1.70 billion in the third quarter, surpassing analysts' estimates of $1.63 billion, according to IBES data from Refinitiv.

Starbucks sign on store in Los Angeles, Calif., Oct. 19, 2018. (Reuters/Mike Blake)

Starbucks Corp topped Wall Street estimates for quarterly comparable sales on Thursday, as pricier drinks and strong demand from consumers in North America helped the coffee chain offset the impact of lockdowns in China.

The company's U.S. comparable sales rose 11% in the quarter, also boosted by the return of its iconic Pumpkin Spice Latte - which, according to Credit Suisse analysts, contributed to the highest sales week in Starbucks' history.

The jump helped Starbucks cushion the hit from a 16% decline in comparable sales in China, where it is still reeling under a zero-COVID policy that has forced its seating areas shut and kept customers away.

Global comparable sales at Starbucks rose 7% in the fourth quarter ended Oct. 2, while analysts on average had expected a 4.2% rise, according to Refinitiv IBES.

Total net revenue rose to $8.41 billion from $8.15 billion a year earlier, compared with analysts' average estimate of $8.31 billion.

LIFESTYLE

Retail trade group says shoppers will lean on savings and credit throughout holiday season

The National Retail Federation estimated Thursday that sales growth will range between 6% and 8% which is down from last year when sales growth was around 13.5%.

Holiday spending is expected to be healthy even with recent inflationary challenges, the National Retail Federation said.

The trade group forecasts holiday retail sales during November and December will grow between 6% and 8% over 2021 to between $942.6 billion and $960.4 billion.

Last year’s holiday sales grew 13.5% over 2020 and totaled $889.3 billion, shattering previous records.

Holiday retail sales have averaged an increase of 4.9% over the past 10 years, with pandemic spending in recent years accounting for considerable gains.

TECHNOLOGY

Elon Musk planning to cut half of Twitter's workforce: Report

Elon Musk is reportedly planning to halve Twitter's workforce in a move to drive down costs. The Tesla CEO took over the social media company last week.

New Twitter owner Elon Musk plans to half the social media platform’s workforce, Bloomberg reported.

The move, if it happens, would help cut costs. The billionaire paid $44 billion for Twitter.

People familiar with the matter tell Bloomberg that Musk will speak with staff Friday.

Under Armour clothing in a store in Manhattan, New York City, Feb. 7, 2022. (Reuters/Andrew Kelly)

Under Armour Inc cut its annual revenue and profit forecasts on Thursday amid weakening demand for sporting goods and as it ramps up discounts to attract increasingly cost-conscious customers.

Weaker forecasts follow the Baltimore-based company's upbeat second-quarter sales that lifted its shares about 14%.

The company said it expects gross margins to fall about 550 basis points (bps) to 600 bps in the third quarter due to more promotions and the hit from a stronger dollar. Fourth-quarter gross margins are forecast to decline 100 bps to 150 bps.

Under Armour forecast fiscal 2023 net sales to rise in low single-digit percentage, compared with its earlier outlook of a 5% to 7% increase.

It expects adjusted earnings per share of 56 cents to 60 cents, below its previous forecast of 61 cents to 67 cents.

Under Armour second-quarter net revenue rose 2% to $1.57 billion, beating estimates of $1.55 billion, according to Refinitiv IBES data.

Kering operations center in Wayne, N.J. (Photo: Kering)

French luxury group Kering is interested in buying fashion brand Tom Ford, the Wall Street Journal reported.

The publication, citing people familiar with the matter, say both sides are in advanced talks and Kering is the front runner for the company.

The Journal previously reported that Estée Lauder was seeking to buy Tom Ford.

Kering’s portfolio includes Gucci, Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen, Brioni, Boucheron, Pomellato, DoDo and Qeelin.

Ball Corporation is trading higher Thursday. The metal packaging company topped Wall Street revenue estimates but missed on profit.

“Demand continues to be quite resilient and supports the durability of our earnings and cash generation. We remain well-positioned for growth and returning value to shareholders,” said Scott C. Morrison, executive vice president and chief financial officer.

Ball reported third-quarter net income of $392 million.

The Westminster, Colorado-based company said it had profit of $1.24 per share. Earnings, adjusted for one-time gains and costs, came to 75 cents per share.

The results fell short of Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of 76 cents per share.

The metal packaging company posted revenue of $3.95 billion in the period, exceeding Street forecasts. Seven analysts surveyed by Zacks expected $3.93 billion.

The Associated Press contributed to this report.

Auto parts supplier Aptiv Plc beat analysts' estimates for third-quarter results on Thursday, aided by price hikes and as auto makers ramped up production to meet rising demand for vehicles.

Auto component suppliers have been raising prices across the board to shift the burden of spiking energy and input costs, and Aptiv Chief Executive Kevin Clark had said in the June quarter that the company was taking several steps to help protect its margin amid worsening economic conditions in Europe.

Aptiv's performance was also helped by higher sales in China by customers such as Tesla, which smashed its monthly record in China-made electric vehicle deliveries in September.

Aptiv reported net sales of $4.6 billion for the third quarter, better than average analysts' expectation of $4.3 billion, according to Refinitiv data.

Excluding items, profit came in at $1.28 per share, compared with expectations of 99 cents per share. The company maintained its full-year sales and revenue guidance.

Bank of England (Reuters)

The Bank of England raised interest rates by the most since 1989 on Thursday but it also warned that Britain faced a long recession and told investors borrowing costs were likely to go up by less than they expect.

The BoE increased Bank Rate to 3% from 2.25% even as it said Britain's economy might not grow for another two years, a slump longer than during the 2008-09 financial crisis.

The pound fell sharply and was down about 2% against the U.S. dollar at 1315 GMT, touching its lowest since mid-October when Britain was in a political crisis triggered by former prime minister Liz Truss' tax-cutting plans.

The BoE has faced political and financial market turmoil since its last rate rise on Sept. 22, a day before former Prime Minister Liz Truss's government launched an unfunded $52 billion package of tax cuts, according to Reuters.

The policy was aimed at staving off recession and spurring long-term growth - but instead it pushed sterling to a record low against the U.S. dollar, forced the BoE to prop up the bond market and led to Truss's resignation.

Markets are now more stable, with British government borrowing costs broadly back to where they were before the upheaval. 

Additional reporting from Reuters.

Kellogg's products at a supermarket of Swiss retail group Coop in Zumikon, Switzerland, Dec. 13, 2016. (Reuters/Arnd Wiegmann)

While the company's sales volumes rose in North America in the quarter, it fell in overseas regions, with company executives saying that Kellogg was starting to see some consumer pushback against higher prices in Europe.

Surging commodity and transportation costs, supply chain challenges and the impact of a stronger dollar on overseas revenue also led to an 18% fall in the company's third-quarter operating profit.

The company now anticipates more than a 100 basis points decline to its annual gross margin, slightly higher than previously anticipated.

Kellogg's net sales rose 9% to $3.95 billion in the third quarter ended Oct. 1. Analysts had expected revenue of $3.78 billion, according to Refinitiv IBES data.

Peloton Bike (Photo: Peloton)

MARKETS

Peloton shares plunge on wider than expected loss, weak revenue guidance

Peloton CEO Barry McCarthy said that the fitness equipment giant's turnaround effort remains a "work in progress" but that the "ship is turning."

Peloton Interactive Inc. (PTON) on Thursday reported a loss of $408.5 million in its fiscal first quarter.

On a per-share basis, the New York-based company said it had a loss of $1.20. Losses, adjusted for restructuring costs and asset impairment costs, came to 70 cents per share.

The results did not meet Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was for a loss of 65 cents per share.

The exercise bike and treadmill company posted revenue of $616.5 million in the period, which also did not meet Street forecasts. Ten analysts surveyed by Zacks expected $638.7 million.

For sign outside a house for sale in Voorhees, N.J., October 29, 2022

REAL-ESTATE

Mortgage rates remain high, but dip under 7%

Mortgage rates dipped slightly this week to 6.95% down from a 20-year high last week of 7.08%, this continues to affect the real estate market as demand slumps.

Mortgage rates dipped below 7% this week according to mortgage packager Freddie Mac.

The average 30-year fix-rated mortgage averaged 6.95%, down from 7.08% a week ago. A year ago at this time, the 30-year FRM averaged 3.09 percent.

The 15-year fixed-rate mortgage averaged 6.29%, down from 6.36%. A year ago at this time, the 15-year FRM averaged 2.35 percent.

“Mortgage rates continue to hover around seven percent, as the dynamics of a once-hot housing market have faded considerably,” said Sam Khater, Freddie Mac’s Chief Economist. “Unsure buyers navigating an unpredictable landscape keeps demand declining while other potential buyers remain sidelined from an affordability standpoint. Yesterday’s interest rate hike by the Federal Reserve will certainly inject additional lead into the heels of the housing market.”

NYSE traders (Reuters)

U.S. equity futures are trading cautiously following the latest interest rate move by the Federal Reserve.

The major futures indexes suggest a decline of 0.2%.

Oil slipped on Thursday as a U.S. interest rate hike pushed up the dollar and fueled fears of a global recession.

West Texas Intermediate (WTI) crude futures traded around $89.00.

Brent crude traded around $95.00.

On Wednesday, the Federal Reserve added to recession fears by saying it wasn't finished raising U.S. interest rates to cool inflation.

The Fed raised its short-term lending rate by 0.75 percentage points, three times its usual margin, for a fourth time this year.

The yield on the 10-year Treasury, used to set mortgage rates, climbed to 4.14% on Thursday.

Traders will be watching the latest reports on jobless claims, trade balance and factory orders.

Roku shares are down 19% in premarket trading after the streaming platform said it expects fourth-quarter revenue to be lower than last year.

Shares of Qualcomm are down 6% in premarket trading after the company forecast that revenue would come in $2 billion less than Wall Street analysts estimated for the current quarter due to a sharp drop in smartphone sales.

In Asia, Hong Kong's Hang Send fell 3%, China's Shanghai Composite Index lost 0.3%. Japanese markets were closed for a holiday.

Wall Street's benchmark S&P 500 index plunged 2.5% to 3,759.69. The Dow Jones Industrial Average lost 1.5% to 32,147.76. The Nasdaq composite slid 3.4% to 10,524.80.

Roku logo on building (Reuters)

Shares of Roku fell 19% in premarket trading after the streaming platform said it expects fourth-quarter revenue to be lower than last year.

The company expects total revenue to be about $800 million in the fourth quarter, down from $865.33 million an year earlier.

The forecast mirror warnings signals on ad spending from Snap Inc as companies cut their advertising budgets to rein in costs.

"As we enter the holiday season, we expect the macro environment to further pressure consumer discretionary spend and degrade advertising budgets, especially in the TV scatter market," the company said.

The company, which reported a 12% rise in quarterly revenue, said the advertising spend continues to grow slowly due to current weakness in the overall TV ad market.

Separately, the California-based firm also announced that its chief financial officer, Steve Louden, will leave the company sometime in 2023.

eBay logo at company headquarters (Getty Images)

Ebay shares are higher by 7% in premarket trading after the online marketplace beat expectations for earnings and revenue and predicted an in-line holiday quarter.

The company reported a third-quarter net loss of $70 million, or 13 cents a share, compared with earnings of 43 cents a share in the year-ago period.

Adjusted earnings came in at $1 a share, compared with 90 cents a share in the year-ago period.

Revenue declined to $2.38 billion from $2.5 billion in the year-ago quarter. Analysts surveyed by FactSet had forecast adjusted earnings of 93 cents a share on revenue of $2.32 billion. 

EBay forecast adjusted earnings of $1.03 to $1.09 a share on revenue of $2.42 billion to $2.5 billion for the fourth quarter. Analysts had estimated $1.05 a share on revenue of $2.49 billion, according to FactSet.

Person filling out a Powerball slip (AP)

There was no grand prize winner in Wednesday night's Powerball drawing.

The jackpot rolls over to Saturday night's drawing with a grand prize of $1.5 billion up for grabs.

The jackpot for a potential winner who takes the cash option, would be worth approximately $745.9 million.

The numbers drawn on Wednesday night were: 2, 11, 22, 35, 60  with the Powerball of 23. The Powerplay multiplier is: 2x

Continue reading

Gas Prices (AAA)

The nationwide price for a gallon of gasoline rose Thursday to $3.778, according to AAA.

The average price of a gallon of gasoline on Wednesday was $3.765.  

One week ago, a gallon of gasoline cost $3.76. A month ago, that same gallon of gasoline cost $3.799

.Gas hit an all-time high of $5.016 on June 14.

Diesel slipped slightly to $5.308.

Oil rigs pumping (Reuters)

Oil slipped on Thursday as a U.S. interest rate hike pushed up the dollar and fueled fears of a global recession.

West Texas Intermediate (WTI) crude futures traded around $89.00.

Brent crude traded around $95.00.

Both benchmarks settled up more than $1 on Wednesday, aided by another drop in U.S. oil inventories.

The Fed raised interest rates by 75 basis points and Chair Jerome Powell said it was premature to think about pausing rate increases. 

A strong dollar reduces demand for oil by making the fuel more expensive for buyers using other currencies.

Bitcoin was trading around $20,000, after trading lower in three of the last four days.

For the week, Bitcoin was trading lower by 3%.

The cryptocurrency has lost 56% year-to-date.

Ethereum was trading around $1,500, after losing 4% in the past week.

Dogecoin was trading at 12 cents, after gaining 76% in the past week.

RetailMeNot's Cash Back Day event returns on Thursday, giving consumers the chance to earn money back while shopping at over 2,500 major retailers.

The fourth annual 48-hour event is slated to ease the financial burden on shoppers during the holiday shopping season set against an uncertain economic environment and painfully high inflation. 

The company said it recognized the "significant impact" that inflation is having on budgets and this year, there are double the amount of cash back offers.  

"RetailMeNot is putting cash back into shoppers' pockets to relieve some of the challenges they’ll be facing this season, and our Cash Back Day event is a prime opportunity to get ahead of the holiday shopping hustle and enjoy savings in the form of cash back for later purchases," RetailMeNot shopping expert Kristin McGrath said in a statement. 

Starting Nov. 4., shoppers can find offers of up to 20% cash back from Amazon, Lowe's, Macy’s, Walmart, Samsung, Dr. Martens and Ray-Ban.

Some brands such as Walmart Inc., Samsung, Groupon and Bose are offering deals for up to five times cash back on apparel, tech, home decor, entertainment and travel. 

For more on the story, click here: Cash Back Day: Amazon, Walmart, Lowe's and others helping consumers earn money

Clients are being advised by two large advertising companies to temporarily pause their paid advertising on Twitter.

Madison Avenue is taking a cautious stance toward the site after Elon Musk's takeover.

The companies are Interpublic Group and Havas Media.

"The current situation is unpredictable and chaotic, and bad actors and unsafe behaviors can thrive in such an environment," Interpublic Group wrote in an email that was seen by The Wall Street Journal. "At this moment, we cannot confidently state that Twitter is a safe place for brands."

Havas Media said to pause because of concerns about the company's ability to monitor its content, according to people familiar with the matter.

A Twitter spokeswoman declined to comment to The Journal.

Advertising accounted for 89% of Twitter's $5.08 billion revenue in 2021.

Read more on the story by clicking here: Ad giants tell brands to pause Twitter spending: report