US third quarter growth rate of 2.8%
Continued solid growth driven by consumption
ADP October private sector employment of 233,000 ‘exceeds expectations’
MS·Meta performance released after market close
The three major indices of the U.S. New York stock market are showing an upward trend in the early trading on the 30th (local time). While expectations for Big Tech’s performance increased due to the earnings surprise of Google’s parent company, Alphabet, the previous day, the market digested solid U.S. third quarter economic growth and employment indicators.
As of 10:07 a.m. on this day in the New York stock market, the Dow average, centered on blue chips, was recording 42,383.1, up 0.36% from the previous trading day. The S&P 500 index, centered on large-cap stocks, is trading at 5,840.66, up 0.13%, and the Nasdaq index, centered on technology stocks, is trading at 18,744.88, up 0.17%.
By stock, Alphabet, which posted better-than-expected performance after the previous day’s market close due to the strong growth of its cloud business, is rising 5.97%. Alphabet recorded sales of $88.27 billion and earnings per share (EPS) of $2.12 in the third quarter of this year. This level exceeds the market research firm LSEG’s previous forecast (sales of $86.3 billion, EPS of $1.85). Semiconductor company AMD is weak by 9.13% as its fourth quarter sales forecast does not meet investor expectations. Construction equipment company Caterpillar is down 2.12% as its third quarter performance fell below expectations and its annual sales outlook was lowered. Microsoft (MS) and Facebook’s parent company Meta, which are reporting results on this day, are rising 1.13% and 0.55%, respectively.
On Wall Street, it is expected that the continued growth of Big Tech and mentions of artificial intelligence (AI) investment will be the main concerns of investors amidst the increased burden of stock prices.
“Growth-oriented stocks like the Nasdaq are back at the forefront,” said Rob Howarth, senior investment strategist at U.S. Bank Asset Management. “We are closely monitoring the company’s performance,” he said.
The U.S. third quarter economic growth rate announced this morning showed solid figures thanks to resilient consumption. According to the Department of Commerce, the U.S. gross domestic product (GDP) growth rate (preliminary figure) in the third quarter was 2.8% on an annualized basis compared to the previous quarter. Although the growth rate (3.0%) and Dow Jones forecast (3.1%) for the second quarter were below the forecast, it is evaluated that solid growth was continued based on solid consumption. The potential growth rate in the United States, which is estimated to be in the late 1% range, is also significantly higher.
Employment was also solid. According to the employment report released by ADP, a U.S. private labor market research company, new jobs in the private sector increased by 233,000 in October, significantly exceeding experts’ expectations (110,000). The figure from the previous month (159,000) is also significantly higher.
The announcement of major economic indicators continues this week. On the 31st, the September Personal Consumption Expenditures (PCE) price index, which is the price index most important to the U.S. Federal Reserve (Fed), and the number of new weekly unemployment claims are released.
Government bond interest rates are falling. The interest rate on U.S. 10-year maturity Treasury bonds, a global bond interest rate benchmark, is recording 4.2%, down 7bp (1bp = 0.01% point) from the previous trading day. The two-year maturity government bond interest rate is hovering around the previous day’s level of 4.11%.
International oil prices are rising. West Texas Intermediate (WTI) is trading at $68.25 per barrel, up $1.04 (1.55%) from the previous trading day, and Brent crude oil, the global crude oil price benchmark, is trading at $71.85 per barrel, up $1.12 (1.58%).
