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Tag: Markets/Marketing

  • Chinese EV maker Xpeng cuts prices after Tesla move

    Chinese EV maker Xpeng cuts prices after Tesla move

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    Chinese electric car maker Xpeng Inc. has cut prices for most of its vehicles by around 10%, joining other auto makers in lowering prices as competition heats up in the country’s fast-expanding electric-vehicle market.

    The company said in a statement on Tuesday that it will slash prices for multiple versions of its P7, P5 and G3i models by 20,000 yuan (US$2,970) to CNY36,000 yuan, representing about a 10% drop from current prices. In particular, the starting price for Xpeng’s
    XPEV,
    -1.19%
    best-selling P7 sedan will be reduced by 12.5%.

    The price cuts will take effect from Tuesday afternoon, the company said. Xpeng has kept prices unchanged for its new G9 model.

    For car owners who purchased Xpeng automobiles before the price cut, Xpeng said it will extend maintenance services for free as compensation.

    Xpeng’s move came after Tesla Inc.
    TSLA,
    -0.94%
    lowered its China selling prices earlier this month. EV makers have been increasingly seeking to fend off rising competition from emerging rivals and traditional car makers’ stepped-up push into the EV industry, where previously soaring sales growth is expected to cool down amid higher market saturation.

    Write to Yifan Wang at yifan.wang@wsj.com

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  • U.S. home prices fall for fourth month in October as high mortgage rates bite

    U.S. home prices fall for fourth month in October as high mortgage rates bite

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    The numbers: The S&P CoreLogic Case-Shiller 20-city house price index fell 0.5% in October, its fourth monthly decline. 

    Year-over-year prices rose rose 8.6%, slowing from 10.4% in the previous month.

    A broader measure of home prices, the national index, fell a seasonally adjusted 0.3% in October from September.

    A separate report from the Federal Housing Finance Agency showed home prices remaining flat in October, down from a 0.1% gain the prior month. 

    And over the last year, the FHFA index was up 9.8%.

    Key details: Miami, Tampa, and Charlotte reported the highest year-over-year gains among the 20 cities in October. All 20 cities reported lower price increases.

    San Francisco and Seattle reported the lowest year-over-year gains, which have seen prices fall by more than 10% from a peak in May.

    Big picture: Housing is in a slowdown, but affordability hasn’t returned. Homes are still expensive, as mortgage rates remain above 6%, and inventory of homes available for sale remains low.

    What S&P said: “As the Federal Reserve continues to move interest rates higher, mortgage financing continues to be a headwind for home prices,” Craig J. Lazzara, managing director at S&P DJI, said.

    “Given the continuing prospects for a challenging macroeconomic environment, prices may well continue to weaken,” he added.

    Market reaction: The Dow Jones Industrial Average
    DJIA,
    -0.22%
    and the S&P 500
    SPX,
    -0.63%
    were up in early trading on Tuesday. The yield on the 10-year Treasury note
    TMUBMUSD10Y,
    3.807%
    rose above 3.81%.

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  • Tesla Doubles Discounts on Model 3 and Model Y Vehicles

    Tesla Doubles Discounts on Model 3 and Model Y Vehicles

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    Tesla Doubles Discounts on Model 3 and Model Y Vehicles

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  • Canada Producer Prices Slip in November

    Canada Producer Prices Slip in November

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    By Robb M. Stewart

    OTTAWA–Producer prices in Canada eased in November, led by energy products, and Canadian companies paid slightly less for raw materials.
    

    Statistics Canada’s industrial product price index fell 0.4% in November from the month before, when the index advanced 2.4%. On a 12-month basis, the producer-price index increased 9.7%.
    

    

    Excluding energy products, producer prices were unchanged on-month in November, the data agency said.
    

    Energy and petroleum products prices fell 2.7% from the month before, with prices for finished motor gasoline and diesel fuel both lower. Market data show that the downward trend continued into the first half of December, Statistics Canada said.
    

    The price of softwood lumber was down for a fourth consecutive month in November, in part a reflection of a cooling housing market in Canada and the U.S., and prices for motorized and recreational vehicles also slipped from October, the agency said. Prices rose for primary non-ferrous metal products, in part due to the appreciation of the Canadian currency against the U.S. dollar.
    

    The industrial product price index measures the prices that manufacturers in Canada receive once their goods leave the plant. It doesn’t reflect the final prices consumers pay for goods on store shelves.
    

    The raw materials price index, which tracks prices paid by manufacturers, was down 0.8% from October, driven by a fall in crude energy products that more than offset the largest month-over-month increase in prices for natural gas since the agency began measuring the index in 1980. Compared with a year earlier, prices for raw materials were up 8.0% in November.
    

    Annual consumer inflation held steady in October after peaking in June, Statistics Canada said last month. The agency will release November’s consumer-price index on Wednesday.
    

    The Bank of Canada, like the Federal Reserve, has aggressively raised interest rates this year to tackle inflation but recently signaled the rate cycle may be coming to an end. The central bank this month again lifted its monetary policy rate, bringing the cumulative increase this year to 4 percentage points for a key rate of 4.25%, the highest level in almost 15 years.
    

    Write to Robb M. Stewart at robb.stewart@wsj.com
    

    

    

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    The PC boom has gone bust, and we are about to see the results ahead of Black Friday
    
			
    The PC boom has gone bust, and we are about to see the results ahead of Black Friday
    
			
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    The pandemic-fueled personal-computer boom has ended, so how will that affect demand and pricing for PCs and the retailers that sell them this holiday season?
    

    A sense of the fallout will be provided in the week ahead with results due from PC makers Dell Technologies Inc.
    
        DELL,
    
        +0.67%
    
      and HP Inc.
    
        HPQ,
    
        +0.17%    ,
    
       along with videoconferencing platform Zoom Video Communications Inc.
    
        ZM,
    
        -1.15%
    
      and electronics chain Best Buy Co Inc.
    
        BBY,
    
        +2.88%    
      
    

    

    All of those companies will report amid signs of deep holiday discounting for products such as clothing and electronics, after many customers — stuck at home in 2020 and 2021 — loaded up on laptops and other goods and turned Zoom into a digital conference room. But this year, decades-high inflation, and a return to prepandemic spending on travel and hanging out in person, have forced retailers and electronics makers to adjust to a world where more people are spending on essentials.
    

    PC shipments have fallen at rates not seen since at least the 1990s. Adobe
    
        ADBE,
    
        -2.06%
    
      has said online holiday discounts for electronics have been as steep as 17%. For computers, they’ve run for as much as 10% less. TVs are also being sold for cheaper. Holiday-season forecasts have generally called for sales increases, helped by price increases and enduring demand despite those price increases. 
    

    In-depth: The pandemic PC boom is over, but its legacy will live on
    

    However, results from Target
    
        TGT,
    
        +0.54%
    
       on Wednesday missed big on third-quarter earnings, and the big-box retailer said it was bracing for a possible decline in fourth-quarter same-store sales, citing “softening sales and profit trends that emerged late in the third quarter and persisted into November.” Results from Walmart
    
        WMT,
    
        +1.51%
    
       were almost the opposite, however, detailing earnings that beat by a wide margin and a raised full-year outlook. 
    

    Among smaller retailers, discounter Ross Stores Inc.
    
        ROST,
    
        +9.86%
    
       hiked its full-year profit forecast, citing sales momentum but easier year-over-year comparisons up ahead. But Williams-Sonoma Inc.
    
        WSM,
    
        -6.15%
    
       noted “macro uncertainty” and “increasingly inconsistent” demand. 
    

    This week in earnings
    

    The companies report during a shortened, quieter week — thanks to Thanksgiving — and after concerns about a recession have hung over much of the year. With 94% of S&P 500
    
        SPX,
    
        +0.48%
    
      companies having already reported third-quarter results, only a dozen are set to release earnings in the week ahead. 
    

    But among those 94%, there are signs that preoccupations with a downturn might be easing, after the economy grew during the third quarter and reversed after two quarters of declines. 
    

    FactSet senior analyst John Butters, in a report on Thursday, said 179 companies have mentioned the term “recession,” during earnings calls in the third quarter. That’s still above the average over 10 years, but it’s below the 242 companies that mentioned a recession in the second quarter. 
    

    Previously: Executives seem pretty convinced a recession is coming
    

    Elsewhere on Monday, J.M. Smucker Co.
    
        SJM,
    
        +1.11%
    
       — best known for Folgers and Jif — reports results, following concerns about higher food prices and how much higher they might go. Life-sciences electronics maker Agilent Tecnologies Inc.
    
        A,
    
        +1.21%
    
       report results on Monday as well. Fast-food chain Jack in the Box Inc.
    
        JACK,
    
        
    
       reports Tuesday. Tractor and construction-vehicle Deere & Co.
    
        DE,
    
        +0.31%
    
       reports Wednesday, following production and supply-chain snarls but steady demand. 
    

    The calls to put on your calendar
    

    Clothing demand, discount demand: Urban Outfitters Inc.
    
        URBN,
    
        +2.44%
    
       reports Monday, while Burlington Stores Inc.
    
        BURL,
    
        +4.63%    ,
    
       Nordstrom Inc.
    
        JWN,
    
        +1.71%
    
       and dollar-store chain Dollar Tree Inc.
    
        DLTR,
    
        -0.21%
    
       report on Tuesday. 
    

    The discounting wave across clothing retailers, an effort to clear inventories, might attract more consumers, but it’s worried Wall Street analysts focused on margins and the bottom line. Still, some analysts have said that more younger shoppers feel like their wardrobes are getting stale, and they say Nordstrom, whose customers tend to have more money, is best geared for “an upcoming wardrobe refresh.”
    

    Off-price clothing and home-goods retailer Burlington, meanwhile, will report after rival discounters Ross and TJX received a lift from investors this week. 
    

    See also: The holiday-shopping season has a different problem this year than last — and it could lead to some deals
    

    Ross’ chief executive, Barbara Rentler, noted that rising prices had hurt its lower-income consumers. But Jefferies analysts said that Burlington and other discounters, which often buy up goods that other retailers don’t want, stood to benefit from the inventory purge. 
    

    Dollar Tree, meanwhile, reports as more shoppers seek cheaper grocery options, but as food prices rise nonetheless. But Bank of America analysts, in a note last month, said traffic data implied a “slowdown” heading into the results. 
    

    The numbers to watch
    

    Demand trends for PCs, electronics: Dell and HP report in the wake of deeper job cuts across the tech industry, while Zoom tries to tack on more features — such as calendar and email functions — to appeal to small business and adapt to a hybrid-work world. 
    

    The PC boom’s demise hit home at Dell during its prior quarter, reported in August, after personal-computer sales at the company came in below estimates. Executives, at that time, said PC demand had fallen and that “customers are taking a more cautious view of their needs given the uncertainty.” 
    

    Opinion: Tech earnings are about to dive, and there’s no life preserver in sight
    

    Some analysts, however, signaled that some degree of investor pessimism was already baked into the stock prices.   
    

    “We recognize the deteriorating industry fundamentals in relation to PCs as well as incremental slowdown in IT Infrastructure. That said, we believe the magnitude of the cuts last quarter set up Dell to be less exposed to another round of material earnings revisions,” JPMorgan analysts said in a note. And even as HP feels similar pain, analysts there said share buybacks could be “a bright spot.”
    

    Results from HP and Dell could also have implications for Best Buy, which sells laptops, TVs, phones and other electronic devices. 
    

    “Recall that initial expectations for the year were that BBY would face pressure as it lapped stimulus-fueled spending and broad-based demand for technology products and services,” Wedbush analysts said in a note on Friday. 
    

    “However, the macro has been more volatile than expected with consumers facing significant inflationary pressures and lower-income households are making decisions to trade down in some categories such as televisions.”
    

    

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  • 
		
		
    
			
    Black Friday surprise: Jeff Bezos tells people NOT to buy cars, refrigerators and other big-ticket items. Critics call him out.
    
			
    Black Friday surprise: Jeff Bezos tells people NOT to buy cars, refrigerators and other big-ticket items. Critics call him out.
    
			
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    Billionaire Jeff Bezos, who founded the e-retail behemoth Amazon, has some spending tips as Americans gear up for a holiday shopping season — amid four-decade high inflation and recession worries.
    

    Here’s what he said:
    

    

    

    
        “‘If you’re an individual and you’re thinking about buying a large-screen TV, maybe slow that down, keep that cash, see what happens. Same thing with a refrigerator, a new car, whatever. Just take some risk off the table.’”
      
    

    

    

    Bezos made the comments in a CNN
    
        WBD,
    
        +0.46%
    
       interview that aired this week, the same interview where he pledged to give away most of his fortune in his lifetime.
    

    

    Why did Bezos offer the tip for consumers and small business to go easy on big-ticket items? He gave one big reason.
    

    “If we’re not in a recession right now, we’re likely to be in one very soon,” he said in the interview, picking up on his cautionary tweet last month that “the probabilities in this economy tell you to batten down the hatches.”
    

    Bezos is currently executive chair at Amazon
    
        AMZN,
    
        -2.34%    ,
    
       transitioning to the role last year as Andy Jassy took the reins as CEO. 
    

    Later this week, Amazon confirmed it was laying off some of its staff in its device and services business — joining a growing list of tech companies, including Facebook parent Meta
    
        META,
    
        -1.57%
    
       — that is laying people off. Amazon’s job cuts could number around 10,000, according to the Wall Street Journal. 
    

    

    

    
        “Critics have taken aim at these words of thrift coming from a man — now worth approximately $120 billion — who built Amazon into the online shopping bonanza.”
      
    

    

    

    To be sure, Bezos is not alone is his worries about a potential recession as the Federal Reserve and other central banks fight higher costs by hiking interest rates.
    

    But his advice prompted some guffaws on social media. In a nutshell, critics say these are words of thrift coming from a man — now worth approximately $120 billion — who built Amazon into the online shopping bonanza that lets consumers seamlessly spend money.
    

    As Joshua Becker, a proponent of minimalism wrote on Twitter: “I didn’t hear him mention refraining from Amazon’s Prime Day deals or Black Friday offers, but I recommend adding those items to your list as well.”
    

    Regardless of how anyone feels about hearing spending advice, particularly from one of the world’s richest people, there are some things to consider as events like Black Friday and Cyber Monday approach.
    

    For one thing, maybe there are discretionary expenses where people can cut back. Many Americans are still spending briskly, as Walmart
    
        WMT,
    
        -0.34%
    
       third-quarter earnings and October’s retail-sales numbers recently affirmed. Holiday-spending projections paint the same picture.
    

    Americans will spend between $942.6 billion and $960.4 billion on holiday-season sales this year, according to projections from the National Retail Federation. Last year’s holiday sales totaled $889.3 billion, the trade association said.
    

    

    

    
        “During the third quarter, Americans’ credit-card balances climbed to $930 billion, the biggest annual increase in more than 20 years, according to the National Retail Federation.”
      
    

    

    

    But Americans are planning for the holidays while credit-card balances are increasing — likely because credit cards are helping them keep up with rising costs.
    

    During the third quarter, Americans’ credit-card balances climbed to $930 billion, the biggest annual increase in more than 20 years, according to Federal Reserve Bank of New York data.
    

    While balances grow, so do credit-card interest rates. The annual percentage rate (APR) on new credit-card offers averaged 19.14% in mid-November, according to Bankrate.com. That beats the old record on APRs for new cards, set at 19% three decades ago.
    

    The holiday shopping season is typically when Americans accumulate credit-card debt, pay the debts in the early part of the coming year and repeat the holiday-season debt the following year.
    

    This year, the stakes could be higher if high credit-card bills arrive and a recession-induced job loss follows.
    

    “It’s not the time to overspend and have a problem with paying your bills later,” Michele Raneri, vice president of financial services research and consulting at TransUnion
    
        TRU,
    
        -4.94%    ,
    
       one of the country’s three major credit bureaus, previously told MarketWatch. “We know the economy is sending mixed messages.”
    

    

    

    

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  • 
		
		
    
			
    Oil Could Rise After Latest EU Sanctions on Russia. Why a Rally May Not Last.
    
			
    Oil Could Rise After Latest EU Sanctions on Russia. Why a Rally May Not Last.
    
			
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    The European Union’s ban on seaborne imports of Russian oil, along with the Group of Seven’s plan to cap prices of oil from Russia early next month won’t guarantee that prices for the commodity will see a lasting rally, or that supplies will tighten further in the days ahead.
    

    “In isolation, the sanctions on Russia should be bullish for prices,” says Matt Smith, lead oil analyst, Americas, at Kpler. However, they may have a limited effect, as Russian barrels get “rerouted and not taken off the market,” while a price cap still has so much uncertainty surrounding it that its impact may be “muted due to workarounds or may simply be ineffective.”
    

    

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  • 
		
		
    
			
    U.K. inflation hit fresh four-decade high of 11.1% in October
    
			
    U.K. inflation hit fresh four-decade high of 11.1% in October
    
			
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    U.K. inflation accelerated in October, reaching a fresh four-decade high, as higher wholesale energy prices fed through households’ utility bills.
    

    The U.K.’s Office for National Statistics said Wednesday that consumer prices were 11.1% higher in October than a year earlier, more than the 10.1% rise registered in September.
    

    

    This is the highest rate of inflation since February 1982, and beats the 10.9% consensus forecast from economists in a poll by The Wall Street Journal.
    

    The jump in inflation was mainly due to higher energy prices, which increased for most households even as the U.K. government implemented an energy price cap from Oct. 1. Electricity prices rose 65.7% on year, up from the 54% increase registered in September. Gas prices soared 128.9% compared to a year earlier, outstripping the 95.7% the prior month.
    

    The core price index–which excludes volatile categories such as food and energy–increased 6.5% in October on year, unchanged from September.
    

    The Bank of England expects inflation to remain around 11% in the fourth quarter, and to moderate slightly toward 10% in 2023’s first quarter.
    

    Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com
    

    

    

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    Russian oil imports holding up, IEA says as it increases oil-demand view
    
			
    Russian oil imports holding up, IEA says as it increases oil-demand view
    
			
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    More than 1 million barrels a day of Russian oil exports are set to be upended by Western sanctions expected to come into force within weeks, shipments Moscow will struggle to redirect elsewhere which threatens to further tighten global energy markets, the International Energy Agency said Tuesday.
    

    Russian crude oil exports, including to the European Union, were largely unchanged last month, despite the prospect of an imminent EU ban on Russian crude oil imports and a separate plan to cap prices for Russian crude oil sales, the Paris-based agency said in a monthly report.
    

    

    Russian exports to the EU were 1.5 million barrels a day in October, of which 1.1 million barrels a day will be halted when the bloc’s ban comes into effect on December 5, the IEA said.
    

    It was unclear how much of those supplies Russia would be able to redirect to customers elsewhere in the world, the IEA said. India, China and Turkey have snapped up discounted Russian crude shipments, but buying from those nations has stabilized in recent months, the IEA said. Meanwhile, the volume would be too large for the remaining nations to absorb, the agency said.
    

    The warning comes as the IEA predicted additional demand this year and next would come from China as the nation slowly eases its Covid-19 lockdown measures–though global demand growth will be sluggish as economies are expected to struggle.
    

    The agency upped its 2022 global oil demand forecasts by 170,000 barrels a day to 99.8 million barrels a day. For 2023, the IEA raised its oil demand forecasts by 130,000 barrels a day to 101.4 million barrels a day.
    

    Russia’s declining oil output will drag on global supplies which will grow at an anemic rate next year, failing to keep pace with growing oil demand. The IEA said global oil supplies would rise to 100.7 million barrels a day in 2023, 100,000 barrels a day more than it was forecasting last month, but still 700,000 barrels a day short of the world’s expected appetite for oil
    
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        -0.85%
    

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        -0.58%    .
      
    

    Write to Will Horner at william.horner@wsj.com
    

    

    

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  • 
		
		
    
			
    France to Pay Part of Companies’ Electricity Bills
    
			
    France to Pay Part of Companies’ Electricity Bills
    
			
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    By Joshua Kirby
    

    The French government will cover a part of companies’ electricity bills, with big energy firms asked to contribute to the cost, a minister told TV station BFM Business late Sunday.
    

    An “electricity guarantee” for 2023 will be finalized soon, and will cover part of any amount paid above a reference price fixed by the government, according to Energy Transition Minister Agnes Pannier-Runacher.
    

    

    Energy companies making large profits will be asked to provide a contribution in relation to the reference price, the minister said, adding that the relevant legal proposition will be made very soon.
    

    The move comes amid surging energy prices across Europe following a stoppage of natural-gas flows from Russia. In France, supply has also been threatened by strikes at nuclear reactors owned by national utility Electricite de France SA.
    

    Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby
    

    

    

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    Mortgage industry group predicts recession next year, expects mortgage rates to come back down from 7%
    
			
    Mortgage industry group predicts recession next year, expects mortgage rates to come back down from 7%
    
			
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    NASHVILLE, Tenn. — A mortgage industry group is expecting a recession to hit the U.S. economy.
    

    “We’re forecasting a recession for next year,” Mike Fratantoni, senior vice president and chief economist at the Mortgage Bankers Association, said Sunday during the industry group’s annual conference in Nashville, Tenn. 
    

    

    “The upside of that potentially for the industry is, that’s the thing that’s likely going to bring rates down a little bit,” he added.
    

    Also see: Mortgage bankers forecast rates to drop to 5.4% in 2023. Here’s what that means for home prices.
    

    In a statement, Fratantoni said the MBA’s forecast calls for a recession in the first half of 2023, and predicts the unemployment rate will rise from 3.5% to 5.5% by the end of next year.
    

    “We’re beginning to see some significant signs of softening in the labor market,” Frantantoni said. 
    

    He expects companies to no longer be scrambling to fill job openings, and that hiring will eventually cool off.
    

    On average in 2023, expect the economy to lose 25,000 jobs per month, he said, and end the year with employment at 5.5%. 
    

    That’s in stark contrast to the latest unemployment rate in September, which was 3.5%, according to the Bureau of Labor Statistics.
    

    “So a very, very different job market to today,” Frantantoni said. “I do expect the next couple of months are gonna be a pretty abrupt transition.”
    

    With a recession on the horizon, expect mortgage rates to come down to close to 5.4% at the end of next year, he said, versus the 7%-plus rates that the market is seeing today. 
    

    “We are holding to our view that this is a spike right now, driven by financial-market dislocation, heightened level of volatility in the market and this global slowdown we’re about to experience, the likelihood of recession in the U.S. will begin to pull this number,” Fratantoni said.
    

    

    

    

    Mike Fratantoni, senior vice president and chief economist for the MBA, speaks in Nashville on Sunday.
    

          
    
            AARTHI SWAMINATHAN
    
          
    
  
    

    

    Given the massive rise in rates this year, with the 30-year fixed rate averaging 6.94% last week as compared to 3.85% a year ago, many potential home buyers have decided to wait as their projected monthly mortgage payments have become unaffordable.
    

    Home sales have plunged, and are dragging down home prices. Sellers are also making more concessions in their attempts to woo buyers.
    

    As a result of the slowdown, the MBA is expecting total mortgage origination volume to fall to $2.05 trillion in 2023 from the $2.26 trillion expected in 2022. 
    

    They’re also expecting purchase originations to drop 3%, and refinances by 24%.
    

    Fratantoni also expects delinquencies to rise from 40-year lows.
    

    

    

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    Snap stock plummets more than 25% as online advertising continues to struggle
    
			
    Snap stock plummets more than 25% as online advertising continues to struggle
    
			
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    A bruising year for Snap Inc.’s shares worsened Thursday, as the stock plummeted more than 20% in after-hours trading as executives launched the company’s first major share-repurchase program amid revenue issues in a poor environment for online advertising. 
    

    Snap
    
        SNAP,
    
        -0.64%
    
       executives revealed that revenue increased less than 6% year-over-year in the quarter — its slowest quarterly grow ever recorded — and said that the holiday season is shaping up similarly, with sales increasing 9% so far in the quarter. The social-media company, which laid off roughly 20% of its staff this summer in response to the issues, also declined to provide a full forecast for the important fourth quarter.
    

    

    “Our revenue growth continued to decelerate in Q3 and continues to be impacted by a number of factors we have noted throughout the past year, including platform policy changes, macroeconomic headwinds, and increased competition,” executives said in a letter to shareholders, outlining the results. “We are finding that our advertising partners across many industries are decreasing their marketing budgets, especially in the face of operating environment headwinds, inflation-driven cost pressures, and rising costs of capital.”
    

    “Forward-looking revenue visibility remains incredibly challenging, and this is compounded by the fact that revenue in Q4 is typically disproportionately generated in the back half of the quarter, which further reduces our visibility,” executives explained about the lack of guidance in a letter to investors.
    

    The board did approve a $500 million share repurchase, a first for the young company. In a news release, executives said that the move was meant “to opportunistically offset a portion of the dilution related to the issuance of restricted stock units to employees as part of the overall compensation program designed to foster an ownership culture.”  
    

    Snap’s results — the first among the major tech companies who rely heavily on digital advertising — likely portend even more turbulent times ahead for Alphabet Inc.’s 
    
        GOOGL,
    
        +0.34%
    
       
    
        GOOG,
    
        +0.24%
    
       Google, Facebook parent company Meta Platforms Inc. 
    
        META,
    
        -1.28%    ,
    
       Twitter Inc. 
    
        TWTR,
    
        +1.18%    ,
    
       Pinterest Inc. 
    
        PINS,
    
        -0.30%
    
       and others in the grip of inflation, a war in Ukraine, foreign-exchange worries and a widening recession.
    

    Snap’s desultory news sent shares tumbling in extended trading for Pinterest (-8%), Trade Desk Inc.
    
        TTD,
    
        +2.26%
    
       (-5), Meta (-4%) and Google (-3%). 
    

    Deteriorating macroeconomic conditions have left advertisers with little choice but to delay or cancel buys. At the same time, intensifying competition from the likes of TikTok and others has deepened headwinds.
    

     “As a smaller player, Snap is more susceptible but no platform is immune,” Insider Intelligence analyst Jasmine Enberg told MarketWatch. “I expect more of the same results next week” when Google and Meta report, she added.
    

    Snap reported a third-quarter net loss of $359.5 million, or 22 cents a share, compared with a loss of 5 cents a share a year ago. Analysts on average were expecting a loss of 24 cents a share.
    

    Snap’s sales increased less than 6% to $1.13 billion, barely falling short of Street estimates of $1.14 billion. Daily active users rose 19% to 363 million. FactSet analysts had modeled 358.2 million.
    

    Snap shares initially fell more than 20% in after-hours trading. They closed the regular trading session down 0.6% to $10.79. Shares of Snap have nosedived 77% this year, while the S&P 500 index 
    
        SPX,
    
        -0.80%
    
       is down 23%.
    

    

    

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  • 
		
		
    
			
    United Airlines says travel demand is stronger than recession pressures; shares rally
    
			
    United Airlines says travel demand is stronger than recession pressures; shares rally
    
			
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    United Airlines Holdings Inc. stock rallied after hours Tuesday after the airline said it expected the travel rebound to weather a shakier economy in the months ahead and reported third-quarter results that beat expectations.    
    

    “Looking forward through the end of the year, the airline expects the strong COVID recovery trends to continue to overcome the recessionary pressures in the macroeconomic environment,” company executives said in a statement. 
    

    

    That backdrop — along with tighter flight networks and changes in how people work — helped justify the airline’s more upbeat forecast for the fourth quarter. United Airlines
    
        UAL,
    
        +3.19%
    
       said it expected adjusted fourth-quarter operating margin of around 10%, the first time the figure would end above pre-pandemic 2019 levels. 
    

    United also forecast adjusted fourth-quarter earnings per share of between $2.00 and $2.25, well above FactSet forecasts for 98 cents per share. The carrier also said it expected a 24% to 25% gain in total fourth-quarter unit revenue — a much-watched industry metric that measures sales as spread out across an airline’s flight capacity — when compared to the same period in 2019. 
    

    Adjusted fourth-quarter unit costs were seen up between 11% and 12%, and roughly 15% for the full year, when compared to the respective periods in 2019. 
    

    For the third quarter, United reported net income of $942 million, or $2.86 per share, compared with $473 million, or $1.44 per share, in the prior-year quarter. 
    

    On an adjusted basis, the company earned $2.81 per share, compared with a $1.02 per-share loss in the quarter a year ago and $4.07 in 2019. Revenue was $12.877 billion, compared with $7.75 billion a year ago and $11.38 billion in 2019. 
    

    Analysts polled by FactSet expected adjusted earnings of $2.28 per share, on revenue of $12.743 billion.
    

    Shares jumped 7% after the market’s close. American Airlines Group Inc.
    
        AAL,
    
        +3.79%    ,
    
       which reports earnings on Thursday, rose 3.6% after hours. 
    

    United, in its earnings release, also called out three demand trends that it said were “more than fully offsetting any economic headwinds.” It said that “Air travel is still in the COVID recovery phase, hybrid work gives customers the freedom and flexibility to travel for leisure more often, and external supply challenges will limit industry supply for years to come.” 
    

    The carrier said it expected total flight capacity, a measure of available seats on  flights, to be down between 9% and 10% for the fourth quarter and down around 13% for the full year, when compared to 2019 levels. 
    

    United reported as analysts look for cracks in the travel industry’s rebound and holiday demand, after eager travelers this summer ran into flight delays and cancellations, insufficient staffing and severe weather. Airfares and fuel costs are more expensive — a function of strong demand and thinner supplies. Aircraft supply is tight, some executives have said. Airlines have also tried to bulk up flight crews, particularly pilots, after encouraging buyouts in 2020, as the pandemic left the industry without passengers and burning through cash. 
    

    Delta Air Lines Inc.
    
        DAL,
    
        +3.34%
    
       last week said it expected fourth-quarter sales to grow from pre-pandemic levels, as demand for travel, after two years of pandemic-related restraint, holds up against rising prices. 
    

    “The travel recovery continues as consumer spend shifts to experiences and demand improves in corporate and international,” Delta CEO Ed Bastian said in its earnings release. 
    

    Raymond James analyst Savanthi Syth, in a research note last week, said she expected United to see similar momentum, helped by corporate travel and international demand. 
    

    She said American and JetBlue Airways Corp.
    
        JBLU,
    
        +1.90%
    
       should benefit to a lesser degree, “due to large corp and transatlantic exposure at the former and large coastal-city exposure at the latter.” JetBlue reports earnings on Oct. 25. 
    

    Delta’s international-unit revenue growth outpaced that in its domestic business for the first time since the pandemic started. Leisure travel to Europe helped propel results, as did strong demand for Delta’s premium-class seats. Bastian said he expected Delta’s flight network to be fully restored by summer next year.  
    

    “Demand has not come close to being quenched by a hectic summer travel season,” he said on Delta’s earnings call. “At the same time, industry supply is constrained by aircraft availability, regional pilot shortages and hiring and training needs.” 
    

    Delta rose 3% after the bell on Tuesday. 
    

    United Airlines stock is down 15% so far this year. By comparison, the S&P 500 Index
    
        SPX,
    
        +1.14%
    
       is down 22% over that time. 
    

    

    

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  • 
		
		
    
			
    Kroger and Albertsons Say Their Merger Will Cut Prices. Their Shares Are Tumbling.
    
			
    Kroger and Albertsons Say Their Merger Will Cut Prices. Their Shares Are Tumbling.
    
			
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    With inflation still an untamed threat, Friday’s announced merger of the grocers
    
        
    
          
    
            Kroger
    
          
    
        
    
       and
    
        
    
          
    
            Albertsons
    
          
    
        
    
       will spur debate about whether the consolidation will raise food prices, or lower them.
    

    The Biden administration’s antitrust regulators are scrutinizing mergers more closely than did predecessors, and an old argument against combinations is that they lead to price-gouging.
    

    

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    OPEC+ supply cut threatens to tip global economy into recession, IEA says
    
			
    OPEC+ supply cut threatens to tip global economy into recession, IEA says
    
			
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    An oil supply cut from the Organization of the Petroleum Exporting Countries threatens to deepen a global energy crisis by sending oil prices higher at a time of already elevated inflation and weak economic growth, the International Energy Agency said.
    

    Last week’s two million barrel-a-day reduction in the group’s output targets, which incurred sharp criticism from the U.S. and its partners, will tighten the oil market further at a moment of extreme vulnerability with few additional sources of supply available to compensate, the Paris-based agency said Thursday.
    

    

    The cut’s impact will be to exacerbate a mix of high oil prices and weakening global growth, both of which would undermine longer-term demand for oil, the IEA said, as it slashed its oil-demand forecasts.
    

    “With unrelenting inflationary pressures and interest rate hikes taking their toll, higher oil prices may prove the tipping point for a global economy already on the brink of recession,” the IEA said in its monthly market report.
    

    The IEA cut its oil-demand growth forecasts by 470,000 barrels a day for 2023, to 1.7 million barrels a day. It also lowered its 2022 oil-demand growth forecast by 60,000 barrels a day, to 1.9 million barrels a day. Oil demand growth has steadily fallen throughout the year and is forecast to contract in the fourth quarter by 340,000 barrels a day, the IEA said.
    

    OPEC has said higher oil prices are necessary to spur fresh investments in oil production but the IEA said constraints among oil producers meant additional supplies would be scant. U.S. shale oil producers facing higher costs are withholding investment, while most Western nations are consciously moving away from fossil fuels. OPEC’s own members are struggling with a lack of spare capacity.
    

    The cut has undone a trend of steadily recovering oil supply following the Covid-19 pandemic “with the resulting higher price levels exacerbating market volatility and heightening energy security concerns,” the IEA said.
    

    The IEA’s report characterizes the supply cut as a lose-lose situation for both oil producers and consumers, as buyers of oil suffer from higher prices in the short term, while oil producers stand to see weaker demand as a result.
    

    The cut also comes ahead of an EU embargo on Russian oil and a plan by the Group of Seven wealthy nations to cap oil prices, both of which analysts warn could further undermine global energy supplies.
    

    Russia has said it would cut production and withhold supplies from nations participating in the price cap mechanism. Meanwhile, time was running out for EU states to find alternative sources of energy to compensate for the still-high levels of oil currently imported from Russia, the IEA said.
    

    Russia’s oil exports to the EU fell by 390,000 barrels a day in September, to 2.6 million barrels a day, the IEA said. The EU has just two months until the embargo on Russian crude imports comes into force, but still needs to find an alternative source for 1.3 million barrels a day of Russian oil, it warned.
    

    OPEC has said its production cut is aimed at stabilizing oil markets and countering declining oil-demand growth. On Wednesday, in its own report, the group sharply slashed its forecasts for global economic growth and oil demand.
    

    For 2022, the IEA now expects total oil demand of 99.6 million barrels a day and 101.3 million barrels a day in 2023.
    

    The agency cuts its forecast for global oil supply next year by 1.2 million barrels a day to 100.6 million barrels a day and by 200,000 barrels a day to 99.9 million barrels a day for 2022.
    

    Write to Will Horner at william.horner@wsj.com
    

    

    

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