Here are the key pieces of news that investors should know before they start trading today:
Stocks came roaring back on Monday after a difficult week. The Dow Jones Index increased by more than 500 points, which was its best performance since June. The S&P 500, after falling into a difficult situation last week, ended the day in a better position.
However, the market faces significant challenges this week, including the Federal Reserve’s decision on interest rates (expected to remain the same) on Wednesday, important company earnings reports like Apple’s on Thursday, and the October job report on Friday. Futures were showing higher numbers on Halloween morning.
2. Scare Tactics
Suddenly, General Motors and Stellantis have reached agreements to halt strikes at their factories. Shortly after the United Auto Workers extended their strike to another GM plant, both the carmaker and the union reached a tentative deal. This effectively put an end to the six-week strikes that had a big impact on the U.S. auto industry.
At the same time, Stellantis reached an agreement with the Canadian union Unifor just hours after the company’s workers in Canada went on strike. With the labor dispute mostly resolved, it’s now the responsibility of the companies and Wall Street to assess the long-term effects.
3. Investors Ghost Tesla
Even though traditional American car companies face their own problems, Elon Musk’s electric vehicle giant, Tesla, is also facing difficulties. Following a tough Monday, Tesla’s stock has dropped by roughly 18% since the company’s third-quarter earnings report earlier this month.
The initial drop occurred when investors reacted to Musk’s warning that high interest rates were putting pressure on the company to maintain lower prices. On Monday, Tesla’s shares declined even further because one of its suppliers, Panasonic, announced a reduction in battery production in Japan. This added more weight to the increasing worries about a decrease in demand for electric vehicles.
4. The Price is Fright
McDonald’s is going to increase its prices in California, similar to what Chipotle is doing. This decision is in response to the rising minimum wage for fast-food workers in the state, which is going up to $20 an hour.
McDonald’s CEO, Chris Kempczinski, mentioned that franchisees in California will likely experience a reduction in their cash flow in the short term. The exact amount of the price increase by McDonald’s is not specified, but Kempczinski indicated that the company will also look for ways to reduce costs.
As for Chipotle, they have already raised their prices four times since June 2021 and have similar plans for California. However, these plans can change. Chipotle stated that in California, they might raise prices by a percentage in the “mid-to-high single digits.”
5. High Spirits at Pinterest
The social media firm Pinterest is expected to see a significant increase in its stock price on Tuesday following its impressive performance in terms of both revenue and profit. When we delve into the details of the earnings report, we find that there were even more pleasant surprises for Pinterest investors.
Pinterest’s revenue increased 11% from $684.6 million in the third quarter of 2022, surpassing what Wall Street had predicted. Additionally, the revenue generated per user was slightly higher than what was expected. Furthermore, the company’s revenue forecast for the current quarter is more optimistic than what was anticipated. As a result, Pinterest’s shares saw a premarket trading increase of over 15%.
Investors should be aware of these key developments in today’s trading landscape. Stocks rebounded strongly, General Motors and Stellantis resolved strikes, Tesla faces challenges, McDonald’s and Chipotle adjust prices due to rising wages, and Pinterest impresses with user and revenue growth. The market holds both opportunities and uncertainties in these dynamic times.