Traders on the floor of the NYSE, October 20, 2022.
Here are the most important news items investors need to start their trading day:
1. Weak end?
The good news: Stocks are on pace to have their best week since the beginning of last month. The bad news: It’s been a losing two days for US markets, and things weren’t looking so great before the bell on Friday, either. After an optimistic start to the week, fueled by relatively strong earnings reports from major banks and others, bond yields rose, sending conventional shares lower. On Thursday, the 10-year Treasury yield hit 4.239% for the first time in 14 years. 2-year and 30-year returns also reached levels not seen in more than a decade. Read live market updates here.
Read more: An often overlooked economic measure is a sign that big trouble is ahead
2. Snapped again
Co-founder and CEO of Snap Inc. Evan Spiegel at the Viva Technology conference dedicated to innovation and startups, at the Porte de Versailles exhibition center in Paris, France June 17, 2022.
Benoît Tessier Reuters
It didn’t look like that Jump posted adjusted earnings per share while Wall Street expected a loss. Or that its revenue increased, or that its number of users increased. It wasn’t good enough, and it doesn’t look like it’s going to get any better as the advertising market gets tougher. Snap shares, already down 77% since Thursday’s close, fell 25% in after-hours trading. The company’s 6% year-over-year revenue gain was the first time quarterly sales growth fell into single digits since the social media company went public in 2017. Its user gain was offset by a decline in revenue per user. “We are finding that our advertising partners across many industries are reducing their marketing budgets, particularly given the operating environment, inflationary cost pressures, and rising capital costs,” Snap told shareholders.
3. More twists in the Twitter saga
In this photo, the image of Elon Musk on a computer screen and the twitter logo on a mobile phone are shown in Ankara, Turkey on October 06, 2022.
Muhammad Selim Korkutata | Anadolu Agency | Getty Images
The Washington Post reported on Thursday afternoon that Elon Musk is planning to eliminate 75% of it Twitterworkforce of 7,500 people if he takes over the company. One former executive said the cuts would be so drastic, it could leave users exposed to security threats and images of children in sexual abuse cases. But, the Post added, the current Twitter regime is planning dramatic layoffs of its own — about a quarter of the company’s workforce — and going through with Musk’s $44 billion deal to buy the social network would prevent them from making painful decisions. Twitter’s top lawyer, in response to the Post article, told employees in an email that the company’s plan was put on hold after the merger agreement was signed. Musk has until October 28 to complete the deal. Elsewhere, Bloomberg reported that the Biden administration was considering national security reviews of Musk’s Starlink satellite internet service and its Twitter contract.
Read more: Facebook shuttle bus drivers are losing their jobs
4. Ukraine presses on
Ukrainian President Volodymyr Zelenskyy visits the Wall of Memory of the Fallen Defenders of Ukraine, amid Russia’s attack on Ukraine, during the commemoration of Defenders of Ukraine Day in Kyiv, Ukraine October 14, 2022.
Press Service of the Presidency of Ukraine | Reuters
Ukrainian forces continued to withdraw territory in the nation’s Kherson region, while Russian forces retreated and evacuated the area. The Ukrainian government accused the Russians of forcibly removing the Ukrainians, but the Kremlin denied it. Volodomyr Zelenskyy, the president of Ukraine, also warned that Russia could attack a hydroelectric dam in Kherson. His comments come as Ukraine tries to fix its electrical infrastructure after waves of Russian missile and drone attacks on city centers and other key hubs. Read live war updates here.
5. Who is next?
British Prime Minister Liz Truss announces her resignation, outside Number 10 Downing Street, London, Britain October 20, 2022.
Henry Nicholls | Reuters
After a month and a half in the job, Liz Truss said on Thursday that she would resign as the Prime Minister of the United Kingdom. Although her tenure was short, it was impactful. His government’s tax cut economic plans shook British markets to their core and weakened the pound significantly when the country was already struggling with a rising cost of living. So who is next? Rishi Sunak, a former finance minister who was Truss’ second-in-command, is considered the favorite to succeed her. Penny Mordaunt, who finished a surprise third in the Conservative leadership race, is also in the mix. Defense Minister Ben Wallace is popular, but it is not clear that he would run. And there is always Boris Johnson. Seriously. CNBC’s Karen Gilchrist break down the situation as it is here.
– CNBC’s Alex Harring, Jonathan Vanian, Natasha Turak and Karen Gilchrist contributed to this report.
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