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Bankers’ optimism; Trump vs. the Fed; Heineken loves summer

Posted at 3:37 AM, Oct 24, 2018
and last updated 2018-10-24 05:37:30-04

1. European banks: The chief executives of Barclays and Deutsche Bank struck optimistic notes in earnings reports released Wednesday.

But the results produced mixed reactions from investors.

Christian Sewing, who has sought to overhaul Deutsche Bank since being appointed CEO in April, said the lender is “well on track to achieve our first profitable year since 2014.”

Germany’s biggest bank has slashed jobs and costs, but revenue growth has not yet materialized. Shares in Deutsche Bank (DB) dropped 4.2% on Wednesday, bringing losses for 2018 to nearly 43%.

It was a different story at Barclays, where CEO Jes Staley touted a strong performance by the lender’s corporate and investment bank.

“2018 is proving to be a year of delivery on our strategy at Barclays,” Staley said in a statement. While shares in Barclays (BCS) gained 1%, the stock is still down over 17% this year.

2. More pressure on the Fed: For the third week in a row, President Donald Trump has criticized Jerome Powell, the man he picked to lead the Federal Reserve.

In an interview Tuesday with The Wall Street Journal, Trump said that Powell raises interest rates “every time we do something great.”

The Fed chair “almost looks like he’s happy raising interest rates,” the president said. He also told the newspaper that it was “too early to tell, but maybe” he regretted nominating Powell to the position.

3. Euro under pressure: The euro dropped 0.5% against the US dollar after data signaled trouble for the eurozone economy.

A new purchasing managers’ survey from IHS Markit indicated that the eurozone economy grew at its slowest rate in over two years in October because of a sharp slowdown in exports.

Investors are also worried about the rising political tensions in Europe. On Tuesday, the European Commission rejected Italy’s draft budget in a showdown over proposed spending increases.

4. Heineken on track: Heineken (HEINY) said that its global beer sales grew in the third quarter, keeping the brewer on track to hit annual sales targets.

Second only to AB InBev (BUD) in terms of size, Heineken said that unusually hot weather in Europe boosted overall sales even though volume growth in Africa and Asia slowed.

Shares in Heineken dropped 1%.

5. Global market overview: US stock futures were pointing lower.

European markets opened mostly higher, while stocks in Asian struggled to find direction.

The Dow Jones industrial average closed down 0.5% on Tuesday, while the S&P 500 shed 0.6% and the Nasdaq lost 0.4%.

6. Companies and economics: AT&T (T), Boeing (BA), Brinks (BCO), Hilton (HLT), NASDAQ (NDAQ), Restaurant Brands International (QSR), Sirius XM Radio (SIRI), Travelzoo (TZOO), Trivago (TRVG), Tupperware (TUP) and UPS (UPS) will release earnings before the open.

Aflac (AFL), Dolby Labs (DLB), Equifax (EFX), Ethan Allen (ETH), Ford Motor (F), Las Vegas Sands (LVS), Microsoft (MSFT), Sleep Number (SNBR), Tesla (TSLA), Visa (V) and Whirlpool (WHR) will follow after the close.

Ford (F) has appointed Anning Chen, the former CEO of a state-owned Chinese automaker, to turn around its operations in China.

The US Census Bureau will release a report on new home sales for September at 10 a.m. ET.

7. Coming this week:
Wednesday — Aflac (AFL), Allegiant Travel (ALGT), AT&T (T), Baidu (BIDU), Boeing (BA), Callaway Golf (ELY), Visa (V), Ford (F), Microsoft (MSFT), SiriusXM (SIRI), Whirlpool (WHR), earnings
Thursday — Alphabet (GOOGL), Amazon (AMZN), Altria (MO), Ally Financial (ALLY), American Airlines (AAL), Alaska Air Group (ALK), Southwest (LUV), AK Steel (AKS), Dunkin’ Brands (DNKN), Boyd Gaming (BYD), Stanley Black & Decker (SWK), Sherwin-Williams (SHW), Merck & Co. (MRK), Hershey (HSY), GrubHub (GRUB), Snap Inc. (SNAP) earnings
Friday — Colgate-Palmovie (C) and Charter Communications (CHTR) earnings