Five Things You Need to Know to Start Your Day
U.S. stocks plummeted Wednesday, with the Nasdaq falling the most since 2011. And multiple high-profile Americans appear to have been sent explosive devices. Here are some of the things people in markets are talking about.
Stock Slide Gets Ugly
The sell-off in U.S. stocks accelerated, wiping out gains for the year in both the S&P 500 Index and the Dow Jones Industrial Average, as mixed corporate earnings and weak housing data fueled anxiety that rising prices will crimp economic growth. Treasuries rallied for a second day on demand for haven assets. The S&P extended its October rout to 8.8 percent, making it the worst month since February 2009. Disappointing earnings from AT&T and Texas Instruments drove declines in the communications and semiconductor groups, offsetting a promising outlook from Boeing. The Dow tumbled 600 points, and the Nasdaq Composite Index lapsed into a correction.
Bomb Threats Across U.S.
Law enforcement agencies opened investigations of apparent explosive devices addressed to frequent targets of conservative vitriol, including Democrats Barack Obama and Hillary Clinton and cable network CNN, as the FBI warned more such packages may still be in circulation. “The packages are similar in appearance” and “contain potentially destructive devices,” the FBI said in a statement, warning that “it is possible that additional packages were mailed to other locations. The FBI advises the public to remain vigilant and not touch, move or handle any suspicious or unknown packages.” At the White House, President Trump said that “acts or threats of political violence of any kind have no place in the United States of America.”
Bridgewater Touts Asia for Investment Opportunity
As the economic cycle in the U.S. and Europe nears its late stage, investors should consider “taking a turn to the East,” according to Bob Prince, who helps oversee the world’s biggest hedge fund at Bridgewater Associates. In a year, the economy of an emerging Asian bloc will expand by the size of the entire Mexican economy, Prince, the co-chief investment officer of Westport, Connecticut-based Bridgewater, said Wednesday at the C4K Investors Conference in Toronto. In five years, it’ll grow by the size of the Japanese economy, and in 10 years, by the size of the European economy, Prince said. “As an investor you’re buying and selling cash flows,” he said. “That’s a lot of cash flows,” said Prince, who described the bloc as China plus about eight countries that are beneficiaries of outsourced labor from Chinese companies.
AMD Adds to Chipmaker Woes After U.S. Close
Advanced Micro Devices Inc., the second-largest maker of computer processors behind Intel Corp., gave a disappointing revenue forecast and missed third-quarter sales estimates on weaker performance of its graphics chips. The stock slumped in extended trading, wiping out more than a fifth of the company’s market value. Fourth-quarter revenue will be about $1.45 billion, plus or minus $50 million, the Santa Clara, California-based company said Wednesday in a statement. That compares with analysts’ average estimate of $1.6 billion, according to data compiled by Bloomberg. Separately, Tesla Inc. blew away expectations with just the third quarter of positive earnings in its history, while Microsoft Corp. posted another quarter of brisk revenue growth driven by cloud services.
China Liquidates $4 Billion Funds
Two funds linked to the Chinese government sold all of their holdings of stocks and bonds in the third quarter without explaining why, leaving investors to guess about the implications for the country’s turbulent financial markets. Withdrawals from the CM Fengqing Flexible Allocation Fund and E Fund Ruihui Flexible Fund caused their combined assets to shrink to 296 million yuan ($43 million) at the end of the third quarter from 31.4 billion yuan in June, according to quarterly statements dated Wednesday. What remains are bank deposits and other unspecified assets. Both funds disclosed that 99 percent of their units were redeemed during the period, without providing details on who pulled the money and why.
What we’ve been reading
This is what caught our eye over the last 24 hours.
- Suspected bombs were sent to the Clintons, the Obamas and CNN.
- Tesla just had a blowout quarter. Can Elon Musk let things be?
- JPMorgan sees $7.4 trillion of passive selling pressure in a downturn.
- Saudi Crown Prince vows Khashoggi justice in a defiant speech.
- The unsolved murder of an unusual billionaire.
- Super Typhoon Yutu is the strongest storm to hit Saipan in 68 years.
- First-class flying is back.
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