Rate Path and Recession Worries Dominate Volatile Global Markets

Benchmark indexes advanced on the final day of a gloomy week as investors dealt with labor market data, rising interest rates and a batch of corporate earnings.

At least for now, stocks rallied after nonfarm payrolls expanded in October and wages rose in October, reflecting the resilience of the US economy.

Stocks jumped in early trading after employers expanded payrolls in October and bond yields traded near 15-year highs.

Nonfarm payrolls rose by 261,000 in October from a revised 315,000 in September, according to the monthly jobs report from the US Bureau of Labor Statistics Friday.

Health care, professional and technical services and manufacturing led payroll expansion in the month.

A separate department survey showed the unemployment rate rose to 3.7% in October from a 29-month low of 3.5% in September,

Stronger-than-expected labor market data also supported the Fed’s case that it needed to cool the economy and raise key lending rates.

The yield on 2-year Treasury notes rose to 4.66%, 10-year Treasury notes jumped to 4.17% and the 30-year Treasury bond reached 4.26%.

Resource stocks led the gainers after oil jumped more than 4% and gold advanced from recent lows.

The S&P 500 index closed up 1.4% at 3,770.55 and the Nasdaq Composite index advanced 1.3% at 10,475.26.

For the week, the S&P 500 index fell 3.3% and the Nasdaq Composite index fell 6.0%.

Crude jumped $4.50 to $92.45 a barrel and natural gas rose 51 cents to $6.48 a thermal unit.

Gold jumped 3.1% or $51.66 to 1,680.59 an ounce and silver rose 6.2% or $1.37 to $20.86 an ounce.

US Stock Mover

Carvana Company fell 37.2% to $9.01 after the online used car retailer said gross sales fell 3% and vehicle sales fell 8% and net loss margin widened to 15%.

DraftKings Inc fell 26.7% to $11.49 after the online sports betting company reported a quarterly loss that was smaller than some analysts had expected.

DraftKings fell after the company said the company’s business is vulnerable to an economic downturn and could be negatively impacted if consumer spending weakens.

DoorDash Inc rose 6.30% to $50.66 after the local delivery services provider said September quarter orders rose 27% to 439 million, total order volume rose 30% to $13.5 billion.

Third quarter revenue rose 33% to $1.7 billion from $1.28 billion a year ago.

Net loss jumped to $295 million from $101 million and diluted loss per share rose to 77 cents from 30 cents a year earlier.

Funko Inc fell 57.3% to $8.32 after the maker of licensed collectibles reported weaker-than-estimated third-quarter results and guided for a fourth-quarter loss.

Net sales in the third quarter increased 36.6% to $365.6 million and net income decreased 39.3% to $11.1 million from a year ago.

Diluted earnings per share fell to 19 cents from 28 cents last year.

The company guided full-year 2022 revenue between $1.29 billion and $1.33 billion and guided fourth quarter gross margin to decline due to seasonality and inventory management.

Starbucks Corporation rose 8.2% to $91.66 after the coffee chain said fiscal fourth quarter results were negatively impacted by travel restrictions in China but comparable sales in North America jumped 11%.

September quarter revenue rose 3% to $8.4 billion from $8.1 billion a year ago.

Net income fell to $878.3 million from $1.764.6 million and diluted earnings per share fell to 76 cents from $1.49 a year ago.

During the quarter, the company opened 763 net new stores globally for a total of 35,711 stores.

Sales in North America rose 6%, or 15% adjusted for an additional week last year, to $6.1 billion on an 11% increase in comparable store sales.

Twilio Inc fell 34.6% to $42.74 after third-quarter revenue growth slowed to 33% and the company guided fourth-quarter revenue growth between 18% and 19%.

Cloud computing stocks have taken a beating on concerns that the industry may be slowing faster than estimated.

ZoomInfo Technologies fell 6.3%, Cloudflare fell 18%, Bill.com fell 8.4% and ServiceNow fell 6.5%.

European Markets Extend Weekly Gains

European markets rose after investors focused on domestic earnings and shrugged off concerns over rising rates, supply chain difficulties and a looming recession.

The DAX index rose 3.1% to 13,528.64, the CAC-40 index advanced 3.5% to 6,459.83 and the FTSE 100 index rose 2.5% to 7,363.28.

The euro held steady at 99.29 US cents and the British pound traded near $1.13.

Brent crude gained $3.40 to $98.14 and TTF natural gas rose 4.8% to 119.40 euros a MWh.

Energy and metals stocks led the gainers after crude oil prices jumped 4% and natural gas prices rose 6%.

Anglo America, Antofagasta, BHP Group and Rio Tinto led the gainers and rose between 5% and 10%.

Societe Generale SA jumped as much as 5% after the French bank reported weaker third-quarter earnings on rising profits despite a challenging economic environment.

Telefonica SA rose 3% to €3.62 after the Spanish telecom service provider reported higher revenue and organic operating profits in the third quarter.

Euro Zone Wholesale Inflation Remains Elevated

Producer price inflation in the euro zone fell to 41.9% in September from a record high of 43.4% in August, according to data released by Eurostat on Friday.

On an annual basis, energy costs rose 108.2% in September from 117.1% in August and non-durable consumer goods prices slowed to 15.2% from 14.7% in August. Durable goods price inflation was unstable at 9.8%.

Excluding energy prices, producer price increases slowed to 14.5% in September from 14.6% in August.

French Production Eases, German Factory Orders Fall

French industrial production fell 0.8% in September from an increase of 2.8% in August, French statistics office Insee reported on Friday.

The agency also reported construction output rose 1.8% in September after falling 0.8% in August, the agency said today.

German factory orders declined to accelerate to 4.0% in September from 2.0% in August, German statistics office Destatis reported on Friday.

The monthly decline was larger than expected, showing a 7.0% drop in foreign orders.

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