Bloomberg Business
-The Fed decision: At 2 p.m. ET the Federal Reserve will announce its October interest rate decision. Markets are pricing in just a 4 percent chance of a rate move today. All of the attention will be on the accompanying statement, and whether the central bank decides to keep a December rate move open as an option. Even though there’s virtually no chance of a hike today, there should be some major debates happening inside the Fed regarding U.S. economic growth and the inflation outlook.
-Chinese stocks slump: China’s Shanghai Composite Index dropped 1.7 percent overnight and the Hang Seng China Enterprises Index in Hong Kong dropped 1.5 percent, its largest fall in a month, as third-quarter earnings disappoint. Sixty-nine percent of Shanghai-listed companies that have reported third-quarter results so far have missed analyst estimates, putting pressure on stock valuations.
-Barclays names its new CEO: The former head of JPMorgan’s investment bank, Jes Staley, will take over as CEO of Barclays Plc on December 1, the company announced this morning. In a memo to staff at Barclays, Staley said that the ambition is to «complete the necessary transformation and repositioning of the investment bank to a less capital-intensive model.” Shares in the bank were down 0.3 percent at 10 a.m. London time, having recovered most of their earlier session losses.
-The world’s largest sovereign wealth fund drops 4.9%: Norway’s sovereign wealth fund posted its biggest loss in four years, dropping 4.9 percent in the third quarter. The $860 billion fund, which is mandated to hold about 60 percent of its assets in stocks, took its biggest hit on its Chinese and emerging market equities. The fund grew more than six-fold over the last decade during the oil boom.
-Northrop wins gigantic bomber contract: A successful contract pitch, that included a Super Bowl ad, has landed Northrop Grumman Corp. as much as $80 billion to build the U.S. Air Force’s Long-Range Bomber. Richard Aboulafia, an analyst at consultant Teal Group described the deal as “transformational for Northrop Grumman.» Shares in the company are 8 percent higher in the pre-market.
CNN Money
-Apple’s profit soars 31% on the back of strong iPhone and Mac sales: The experts said it couldn’t last, but Apple just keeps finding new ways to maintain its startup-like growth. Apple’s profit jumped 31% last quarter, as customers continued to buy more expensive iPhones. The company sold 48 million iPhones last quarter, which was 22% more than it sold during the same period a year ago. But the money Apple made from those iPhone sales grew even more — 36% — over last year. Customers were also buying Macs in droves. Sales grew 3% last quarter to 5.7 million — an all-time record. Apple’s services, including Apple Music, the iTunes App Store and music store, and iCloud, brought in a record $5.1 billion in sales. Crucially, sales in China, which is Apple’s second-largest market behind North America, grew 99% — even as the economy continued to face struggles there. China is by far Apple’s fastest growing market, and the company still believes that it will one day be its biggest.
-Volkswagen crashes into losses on diesel scandal: Volkswagen crashed to a deep loss in the third quarter as the group’s diesel emissions scandal wiped out earnings. The automaker reported a net loss of 1.7 billion euros ($1.9 billion) for the quarter, down from a profit of nearly 3 billion euros a year ago. That was after taking a charge of 6.7 billion euros for vehicle recalls and other costs associated with Volkswagen’s (VLKAY) cheating of emissions tests in the U.S. and other markets. But that provision will have to rise as the German company is presented with the bill for penalties, fines and customer compensation. «We know this amount will grow,» Volkswagen CFO Frank Witter said on a conference call. He could not say when the additional charges would be taken.
-Is it up or down? America is a tale of 2 economies: America’s economy has two storylines right now. The question is: which one will prevail by the end of 2015? Here are the two main narratives: 1. U.S. trade and manufacturing are getting crushed by the weak global economy and the strong dollar. 2. Americans are spending more on cars, in hotels and at restaurants. We’ll get our latest look at the health of the American economy on Thursday when the report on third quarter U.S. economic growth is published. Overall, it’s expected to be weak. The Atlanta Federal Reserve is projecting an anemic 0.9% growth. Bank of America is forecasting 1.2% growth. Others are expecting an equally tepid quarter of economic activity in the U.S. Compare that to a year ago, when the economy grew 4.3% in the third quarter.