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Pre-markets are on the downslope again this morning, led by the Nasdaq shedding another -2.5% (-750 points) ahead of the open. Q3 earnings season has shown some cracks in the armor for the AI trade, particularly in the forward outlook. The Dow is -65 points at this hour, the S&P 500 is -82, and the small-cap Russell 2000 — which finished up at Thursday’s close — is down -15 points currently.
Oil prices are up again as tensions between the U.S. and Iran grow heavier. The domestic WTI spot oil price of $104 per barrel (/bbl) was the highest level in six weeks, while international Brent crude dialed back a bit to $112/bbl. If there is some good news to all of this, bond yields are also cooling a bit. The 10-year, for instance, which was around +5.35% in the first week of October, is +4.93% this morning.
Employment Costs In-Line with Estimates
This morning’s Employment Cost Index for October came in at +0.8%, in-line with estimates and down -10 basis points (bps) from the prior month. Salaries were up +0.7% while benefits advanced +0.9%. Year over year, wages grew +3.1%, benefits +3.9%. Adjusted for inflation, however, this cost index is +0.5% in October, well off the prior month’s +0.9%.
After today’s open, the ISM Chicago Business Barometer for October is expected to cool slightly to 56.0 from 58.8 reported in the previous month. These numbers are nicely above the 50-level, which determines expansion from contraction.
Q3 Earnings Morning at a Glance: Big Oil & Big Pharma
Three of the biggest integrated oil & gas supermajors reported quarterly earnings ahead of today’s opening bell. Not surprisingly, with oil prices reaching their highest levels in years based on the shutdown of the Strait of Hormuz, all three posted strong earnings numbers: ExxonMobilXOM earned $4.23 per share versus expectations of $3.90, ChevronCVX made $5.28 per share versus the $4.78 estimate, and BPBP reached $3.26 per share against the Zacks consensus $2.66.
Big Pharma is also nicely represented this morning. AstraZeneca AZN made $2.79 per share for a +7.3% earnings surprise, while AbbVieABBV posted a +2.14% earnings surprise to $3.82 per share. RegeneronREGN, while not (yet) considered a Big Pharma stock, blew the doors off expectations this morning: earnings of $20.07 per share beat expectations by +24.8%.
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Weak farm economics and constrained Brazilian credit could continue weighing on Lindsay’s near-term results. North America irrigation weakness is also concerning.
Clorox faces mounting near-term headwinds from inflation, global economic pressures and intensifying competition, all of which threaten to weigh on its profitability in fiscal 2027.
Debt, long equipment lead times, Permian exposure, softer aftermarket demand and rising costs increase execution risk and constrain earnings visibility.
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Bank of America is expected to keep benefiting from robust NII growth, AI-led digital transformation, a dominant deposit franchise, strong investment banking activity and solid capital returns.
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Amgen’s key medicines like Evenity and Repatha as well as newer medicines like Tavneos and Tezspire are driving sales, more than offsetting declining revenues from oncology biosimilars and legacy established products such as Enbrel
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