Market hit new highs and borrowers get another rate cut - Detroit Free Press

Benzinga

Published 7:00 AM EDT Nov 2, 2019

The S&P 500 finished October up 1.8% on the month, extending its year-to-date gains to 20.9%.

On Monday, the S&P 500 made its first new all-time high since July 26. The index was led higher by Microsoft, which secured a major $10 billion Department of Defense cloud computing contract.

On Wednesday, the Commerce Department said U.S. GDP grew 1.9% in the third quarter, ahead of economist estimates of 1.6% growth. GDP growth slowed slightly from 2% in the second quarter.

Also on Wednesday, the Federal Reserve issued its third interest rate cut of 2019, lowering the fed fund target rate by 0.25% to a range of between 1.5% and 1.75%. This cut was widely anticipated, but the bond market is currently pricing in just a 22.9% chance of another 2019 rate cut, according to CME Group.

The U.S. economy added 128,000 jobs in October, easily beating economist estimates of 75,000 jobs. The jobs number was particularly impressive given the auto industry lost 42,000 jobs on the month due to the General Motors strike.

Strong earnings season rolls on, for some

Apple reported better-than-expected earnings, exceeding Wall Street expectations for earnings, revenue and guidance. Apple’s market capitalization grew to $1.12 trillion after the company said it expects a strong holiday shopping season.

Facebook also reported a third-quarter earnings beat thanks to higher-than-anticipated average revenue per user. Despite concerns over data security, antitrust regulation and election manipulation efforts, Facebook shares are up more than 46% year to date.

Following a disappointing earnings report earlier this month, Twitter shares traded lower after CEO Jack Dorsey said the social media platform will not be allowing political ads on its platform ahead of the 2020 U.S. presidential election.

This week, an impressive earnings season continues with reports from AmerisourceBergen, Cardinal Health, Walt Disney and ArcelorMittal on Thursday.

Roughly 75% of more than 340 S&P 500 companies that have reported third-quarter earnings up to this point have exceeded consensus expectations, according to FactSet.

Economic Data

This week, investors will be watching the Institute for Supply Management’s non-manufacturing PMI number for October on Tuesday. The University of Michigan also releases its monthly Consumer Sentiment Index reading on Friday.

Guess Who?

This company owns one of the most recognizable soft-drink brands. From its humble beginnings, it has since grown to have a presence in over 200 countries with 22 brands across its portfolio. More recently, it revamped its vision statement to “Be the Global Leader in Convenient Foods and Beverages by Winning with Purpose.”

The formula for its iconic drink was developed in 1893 at a pharmacy in North Carolina, where it quickly became a customer favorite. Seeing the opportunity there, the owner trademarked the name of the drink and began selling it in other pharmacies and stores. Soon enough, it was being distributed in 24 states.

Unfortunately, this success was put to a halt when the company went bankrupt due to the founder’s poorly placed gamble on sugar price. Ownership was then passed to Loft Candy Co., which developed a new 12 oz bottle and formula for the drink. 

It later merged with a large American snack-maker brand before entering Japan and Eastern Europe. Its presence only increased as it became the first U.S. product to be produced and sold in the USSR.

Riding this wave of new recognition, it partnered with Michael Jackson to be a spokesman for the brand, further driving up sales. This trend of using celebrities to promote its products is continued to this day.

As it became a global player, it also began focusing on more sustainable production processes.  In 2005, it established its first “green” distribution center for its snack products. More recently, it launched its 2025 Sustainability Agenda.

Answer: PepsiCo

Benzinga is a financial news a data company headquartered in Detroit.

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https://www.freep.com/story/money/business/2019/11/02/markets-hit-new-highs-and-borrowers-get-another-rate-cut/4121996002/

2019-11-02 12:00:00Z
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