Fed’s Harker says rates may stay at current levels
Philadelphia Federal Reserve President Patrick Harker, a voting member in the central bank’s policymaking committee for 2023, said rates are at a level where further increases may not be needed.
“This is a time where we just sit for a little bit. It may be for an extended period; it may not. But let’s see how things evolve over the next few months,” Harker told The Wall Street Journal. He added that while recent data points to economic strength, contact with individual businesses indicates “things seem to be slowing down.”
— Fred Imbert
Country Garden says it is unable to meet its offshore debt obligations: Reuters
Chinese property developer Country Garden Holdings has said it does not expect to be able to meet all of its offshore debt obligations, Reuters reported.
This comes as the grace period for a $15 million bond coupon payment expired on Wednesday, which meant that the company has likely defaulted on its offshore debt.
In a statement to Reuters, the company said that it hopes to seek a holistic solution to resolve its existing difficulties.
Last week, the developer warned that it expects it will not be able to make all of its offshore repayments, including those issued in U.S. dollar notes.
Asia chip stocks mostly inch down after new U.S. restrictions on AI chip exports to China
Asian chipmaker and related stocks were mostly down on Wednesday, after the U.S. announced new restrictions on exports of artificial intelligence chips to China.
Shares of chip manufacturing giant Taiwan Semiconductor Manufacturing Corp slipped as much as 1.27%, while counterpart Hon Hai Precision Industry — also known as Foxconn — inched down 0.47%.
On the other hand, shares of domestic Chinese chipmaker SMIC spiked by as much as 4.62%, although it later pared gains to trade 2.43% higher. Counterpart Hua Hong Semiconductor lost 0.41%.
— Lim Hui Jie
China September retail sales rise, urban unemployment at near two-year low
China’s retail sales rose in September, while the urban unemployment rate cooled to a near two-year low according to data from the Chinese government.
Retail sales rose 5.5% last month, against an estimated 4.9% rise according to economists polled by Reuters.
Urban unemployment stood at 5% in September, its lowest level since November 2021, down from a prior reading of 5.2% in August.
Overall, China’s third-quarter economic growth was stronger than expected, boosting hopes that the world’s second-largest economy will meet Beijing’s annual target this year.
— Shreyashi Sanyal
China economy grows 4.9% in third quarter, beating expectations
China’s economy grew 4.9% year-on-year in the third quarter, higher than the 4.4% expansion that was expected from economists polled by Reuters.
However, this figure was lower than the 6.3% year-on-year expansion seen in the second quarter.
Read the full story here.
— Lim Hui Jie
Alan Schwartz says, with balance sheets strong and PE pushed away, corporates are ready to return to M&A
Large corporations have strong balance sheets and are ready to return to the merger and acquisition market now that private equity investors have been pushed aside as interest costs have risen, Guggenheim Partners executive chairman Alan Schwartz said Tuesday on CNBC’s “Squawk Box.”
“Now they’re seeing the chance to come back in, right, because they kept their balance sheets strong,” the former Bear Stearns CEO said. “At the same time, the macro environment, especially geopolitical and all these other things, you know, creates concerns in the boardroom as to whether now’s the time, or wait on some of these things.”
Guggenheim advises lots of C-suite executives, and “what we’re saying is we saw a big drop in M&A activity, right, when the capital markets tied up for a lot of the private deals, but now you’re seeing a lot of, let’s say, discussions and activity beginning clearly picking up from the corporate side that are seeing their opportunity to come in. But you know, how many of those will get across the line?”
— Scott Schnipper
Interactive Brokers, J.B. Hunt among stocks moving the most after the bell
These are some of the companies making the most significant moves in extended trading:
- Interactive Brokers Group — Shares of the electronic broker dropped more than 4% in after-hours trading. Interactive Brokers posted third-quarter adjusted earnings of $1.55 per share on adjusted revenue of $1.14 billion.
- J.B. Hunt Transport Services — The transportation and logistics stock lost 3.6% after reporting third-quarter results that fell short of Wall Street’s expectations.
- Omnicom Group — The marketing company’s shares slipped 1.4%, even as the company narrowly beat analysts’ expectations in the latest quarterly report.
Read the full list of companies moving here.
— Samantha Subin
United Airlines falls on soft guidance
Shares of United Airlines dropped nearly 5% in extended trading after it warned that warning that elevated fuel costs and a halt in Tel Aviv flights amid the Israel-Hamas war would hit current-quarter profits.
The company said it expects adjusted earnings to range between $1.50 and $1.80 per share, versus the $2.06 per share expected by analysts polled by LSEG, formerly known as Refinitiv.
Despite the after-hour moves, United Airlines topped Wall Street’s expectations for the recent quarter. The airline reported adjusted earnings of $3.65 per share on $14.48 billion in revenue. That topped the EPS of $3.35 and $14.44 billion anticipated by analysts.
United Airlines falls on weak guidance
— Samantha Subin, Leslie Josephs