This week ushered in fresh highs for US markets lead by the small cap Russell 2000 index which gained over 3%, buoyed by stronger than expected retail sales and lower weekly jobless claims.
The Atlanta Federal Reserve raised its estimate for third quarter GDP to an annualised 3.4% from 3.2%, an acceleration from the prior quarter’s 3% growth clip.
Higher up the market cap food chain, the benchmark S&P 500 was boosted by strong earnings reports from all the big banks, led by heavyweight JP Morgan Chase (JPM:NYSE), confirming strength in consumer spending.
The technology-heavy Nasdaq Composite lagged, impacted by a brutal warning from semiconductor chip machine maker ASML (ASML:AMS) on the demand outlook for the sector which wiped 16% from the company’s market value.
Chipmakers fell across the board, although some semblance of poise was regained following a strong earnings report from Taiwan’s TSMC (TSM:NYSE), driven by strong demand for AI (artificial intelligence) chips, which sent shares in AI darling Nvidia (NVDA:NASDAQ) to a new all-time high of $140, taking gains for the year to 184%.
Elsewhere, travel booking platform Expedia (EXPE:NASDAQ) jumped 5% after the Financial Times reported that ride hailing group Uber Technologies (UBER:NYSE) is exploring a takeover bid.
NETFLIX
Despite Netflix (NFLX:NASDAQ) shares falling over 6% in the week, the stock rallied in after-hours trading (17 October) as the content-streaming company’s third-quarter revenue, earnings and subscriber numbers beat expectations.
Netflix also upgraded its fourth-quarter guidance, which is not surprising considering the appealing content on offer to subscribers including a new season of Squid Game, an adaptation of One Hundred Years of Solitude and season four of Outer Banks plus major events in boxing and American football which are slated for the third quarter.
New subscribers totaled 5.1 million during the quarter, more than the 4.5 million Wall Street expected, meaning in total the streaming service now has 282.7 million memberships across all its pricing tiers.
The company is projecting revenue for full-year 2025 of between $43 billion and $44 billion as it improves its core series and films offerings, with much of that revenue growth expected to come from ‘a healthy increase in paid memberships’.
WALGREENS BOOTS ALLIANCE
Struggling retail pharmacy giant Walgreens Boots Alliance (WBA:NASDAQ) rallied 20% to $10.10 as fourth quarter sales and earnings (15 October) beat Wall Street’s subdued expectations with a cost-cutting boost.
Chief executive Tim Wentworth’s plan to shutter roughly 1,200 stores over the next three years, including some 500 closures in the current financial year, was also positively received.
The Illinois-headquartered owner of Walgreens across the pond and UK-based chemist Boots has roughly 8,700 locations in the US, a quarter of which are unprofitable as the chain contends with weaker consumer spending and low drug reimbursement rates.
Fourth quarter sales rose 6.1% to $37.5 billion, ahead of the $35.76 billion ‘the street’ was looking for, while adjusted earnings per share of $0.39 topped the $0.36 in analysts’ spreadsheets.
Fourth quarter sales at Boots ticked up 2.3% at constant exchange rates, while Boots.com continued to perform robustly with sales up 19%.
