The S&P 500 flipped back into positive territory for October last week on continued optimism about improving trade relations between the U.S. and China and a better-than-expected start to third-quarter earnings season.
Hot start to earnings season
Trading got off to a rocky start for the week on reports that China wants another round of trade talks before formally agreeing to the first phase of a trade deal with the United States. Critics of the phase one deal have said it lacks specific details and provides no clear time frames for action.
Despite lingering trade war concerns, stocks got a boost from big U.S. banks. J.P. Morgan Chase, Citigroup and Bank of America all reported better-than-expected third-quarter earnings. Only Goldman Sachs and Wells Fargo missed consensus estimates.
Investors also received good news from Europe on Thursday when the European Union and the U.K. reached a last-minute deal on a Brexit plan. The new deal would keep Northern Ireland as part of the U.K. customs territory, and would not mandate regulatory and customs checks at the border between the Republic of Ireland and Northern Ireland.
Following the latest U.S. economic numbers, Chicago Fed President Charles Evans said U.S. monetary policy is “in a good place right now,” potentially suggesting that the Federal Reserve may hold off on further interest rate cuts.
The bond market is still pricing in an 88.2% chance of at least one more rate cut by the end of the year, according to CME Group.
Other headlines
UAW members are reviewing a deal to end the monthlong General Motors strike. The tentative agreement would involve closing three U.S. plants and would pay most union-represented GM employees an $11,000 ratification bonus.
In addition to big bank earnings, Netflix stock traded higher after the streaming video giant bounced back from a disappointing second quarter and reported third-quarter paid international subscriber growth ahead of consensus analyst estimates.
This week, third-quarter earnings season ramps up with reports from SAP on Monday and Procter & Gamble, Novartis and Travelers Cos. on Tuesday.
Guidance will be key for investors this earnings season. Analysts are currently predicting low single-digit earnings growth in the fourth quarter and high single-digit earnings growth in the first half of 2020, according to FactSet.
Economic data
The International Monetary Fund lowered its full-year 2019 global economic growth estimate from 3.3% to 3% last week. This week, investors will be watching on Thursday to see if the European Central Bank cuts interest rates further after dropping them to -0.5% in September.
Guess who
Based in Switzerland, this business operates in the consumer food products industry. It has more than 2,000 brands in its portfolio and a presence in 190 countries. By 2030, it’s hoping to achieve a zero environmental impact in its processes.
It started in 1867 with its infant milk products, a unique combination of wheat flour, sugar and cow’s milk. While this was extremely successfully, it soon developed a fierce competition with Anglo-Swiss’s condensed milk. This would continue until the two forces combined in a merger in 1905.
About 25 years later, it took over export sales for Peter & Kohler, marking the start of its chocolate sales. This was followed by an acquisition of the Norwegian dairy company Ergon, allowing it to start selling powdered milk product.
Over the years, its growth would remain driven through acquisitions along with innovation.
Eventually, it bought Peter-Callier-Kohler, making chocolate an integral part of the company. It also combined forces with Alimentana, a producer of soups, bouillons and seasonings, before entering the frozen foods industry with Jopa and Jeudebert-Gervais. This was followed by a series of purchases, including Carnation Co., Friskies, Rowntree Mackintosh and Buitoni-Perugina. At the same time, it started developing and selling a powdered coffee extract.
With coffee and cocoa growing to become a main part of its business, it began to focus more on developing sustainable supply chains for these products. More recently, it started working with the FLA to tackle child labor in its processes.
Answer: Nestle Company
Benzinga is a financial news a data company headquartered in Detroit.
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October 20, 2019 at 05:00PM
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