The top 10 things to watch Friday, Oct. 20
1. Will the yield on the 10-year Treasury breach 5% Friday, and how will markets react? U.S. stocks are down in premarket trading, with S&P 500 futures falling 0.27%, potentially leading to another disappointing week for equities. Stocks have been held back by high bond yields and strengthening oil prices.
2. American Express (AXP) reports a big third-quarter earnings beat Friday, with earnings-per-share (EPS) of $3.30, ahead of analysts’ forecasts for $2.94 a share. Revenue climbs by 13%, boosted by travel-and-entertainment spending. Millennial and Gen-Z spending rises by 18% in the U.S.
3. Oilfield services firm Schlumberger (SLB) misses slightly on revenue expectations for the third quarter, but beats adjusted EPS estimates by a penny. The company has reported nine-consecutive quarters of double-digit, year-over-year growth in its international business, and expects sequential revenue growth in the fourth quarter.
4. UBS assumes coverage on a handful of drug stocks, including Club name Eli Lilly (LLY). The bank designates Eli Lilly a buy, with a price target of $710 a share, saying it expects “meaningful upward revisions” for diabetes-and-obesity treatment Mounjaro.
5. Intuitive Surgical (ISRG) reports a mixed quarter, as the company continues to see pressure on its bariatrics business due to the rise in GLP-1 obesity drugs. This used to be the company’s largest source of procedure growth.
6. General Motors (GM) is reportedly close to reaching a tentative agreement with the United Auto Workers union that would resolve a month-long strike, which has also engulfed Club name Ford Motor (F) and Stellantis NV (STLA), according to Bloomberg.
7. Deutsche Bank upgrades Union Pacific (UNP) to a buy rating, while slightly raising its price target to $258 a share, up from $257. The firm cites improving U.S. rail volumes and increasing confidence around new CEO Jim Vena.
8. Wolfe Research upgrades Club holding Morgan Stanley (MS) to a neutral-equivalent rating from underperform, without a price target. Meanwhile, Wednesday’s post-earnings sell-off of the bank stock was an overreaction.
9. JPMorgan reiterates Club holding Amazon (AMZN) as its best idea in the internet sector on the expectation that revenue growth at cloud unit Amazon Web Services will accelerate in the second half of this year, while North American retail margins expand.
10. Goldman Sachs lowers its price target on Club name Walt Disney (DIS) to $125 a share, down from $128, while maintaining a buy rating on the stock. The firm asks: is the stock is now at the point of peak uncertainty?
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