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T3's Take 3: Morgan Stanley Sinks on Earnings


Today's financial recap and tomorrow's financial outlook.

Today on T3 Live

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World Equity Markets

US equities opened lower today amid a fall in biotech and disappointing GDP numbers from China. 

The S&P 500 closed down flat for the day after some bounces up and down. The NASDAQ was also volatile, primarily due to action in biotech. The iShares NASDAQ Biotech ETF (IBB) eventually closed up 0.5%, helping push the NASDAQ up 0.4%.

Aside from Morgan Stanley reporting earnings this morning, Halliburton (HAL) and Hasbro (HAS) also released their earnings reports.. Both beat on EPS, but missed on revenue. According to CNBC, of the 58 companies that have reported earnings as of Friday's close, 71% have beaten estimates for EPS, but only 47% beat on revenue. 

The US dollar was mixed among major currency pairings, falling against the yen and British pound but gaining against the euro, Australian and Canadian dollars. 

Asian shares finished mixed today after China's GDP numbers were released.

The world's second largest economy posted a 6.9% increase in GDP, beating the 6.8% analyst expectations. Despite the beat, other economic data indicated some weakness in the economy. Industrial production increased 5.7% last month, missing expectations by 0.3%, and falling below August's 6.1%. Fixed-asset investment was10.3% for YTD through October, missing by 0.5%. Retail sales saw a slight beat, coming in at 10.9%.

The Shanghai Composite closed down 0.1%.

European markets were mixed. The German DAX finished up 0.6%, while the French CAC inched up 0.03%. London's FTSE saw a 0.4% decline. Deutsche Bank rallied 3.7% after it announced restructuring plans that will separate its investment bank and dismiss several key executives. French food giant Danone gained 2% on a solid earnings report. 

Morgan Stanley Falls on Earnings

Morgan Stanley (MS) reported its earnings for Q3 this morning before the open. 

Earnings came in at $0.42 a share, missing analysts expectations by a big $0.20. Revenue fell 13.3% to $7.77 billion, well below the $8.54 billion consensus. 

The disappointing numbers were attributed to declines in revenue from bonds, FX, and Commodities. Revenue from those categories was down 42%. Revenue from equities was flat. 

CEO James Gorman called the results the worst since the financial crisis for the firm's bond trading business.

Morgan Stanley shares fell 4.8% while rivals Goldman Sachs (GS) and JP Morgan Case (JPM) were flat for the day. 

Weight Watchers Soars on Oprah Buy-In

Weight Watchers' (WTW) shares surged an astounding 105% today after media mogul Oprah Winfrey announced she will buy a 10% stake in the company for $43.2 million. 

Oprah will also join the company board of directors. According to the filing with the Securities and Exchange Commission (SEC), Weight Watchers will gain the rights to use Oprah's name, image, likeness, and endorsement.

Winfrey will also gain the rights to use Weight Watchers' marks to promote the company. 

The agreement will last five years, and will have additional successive one-year renewal terms.

Tuesday's Financial Outlook

US economic data for tomorrow will include housing starts, and building permits. The Fed's Dudley Powell will speak at the Market Conference in New York as well.

Overseas economic data will feature Swiss trade balance, Japan's merchandise trade balance, and New Zealand credit spending. 

BNY Mellon (BK), Harley-Davidson (HOG), Lockheed Martin (LMT), Omnicom (OMC), United Tech (UTX), and Verizon (WWW) will release earnings before the open tomorrow. ACE Limited (ACE), Chipotle Mexican Grill (CMG), Chubb (CB), and Yahoo! (YHOO) will announce their earnings after the close. 
No positions in stocks mentioned.
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