1
RBA deputy governor Andrew Hauser says Australia's inflation outlook is 'materially worse', raising odds of a November rate hike
Reserve Bank of Australia Deputy Governor Andrew Hauser said the inflation outlook is "materially worse" than the bank forecast in August, citing higher oil prices, technology and AI-related price pressures, and a data center construction boom. He warned that some businesses see 3.5% inflation as the "new normal", a shift that could require higher rates to reverse. Market pricing for a fifth hike at the November 3 meeting rose from 30% to around 40-45%, according to The Guardian and Reuters, while ABC reported 42%. Economist Diana Mousina of AMP said she still found a November hike hard to see, pointing to weakening jobs data. Hauser also described the labour market as weaker than expected, with unemployment at 4.7%, and called the choices facing the board "hard".
Key facts
- Hauser said the inflation outlook is "materially worse" than the RBA's August forecast.
- Markets priced the chance of a November 3 rate hike at roughly 40-45% after his comments.
- Annual inflation stood at 4% in the year to August.
- Unemployment rose to a five-year high of 4.7% in September.
- Brent crude traded at $108 a barrel, about a third above the RBA's August forecast.
Commentary
Sources: Bloomberg.com, The Guardian, ABC News & Headlines – Australian Broadcasting Corporation, Rock Hill Herald
2
US stocks rise on strong corporate earnings as oil prices retreat
US stocks rose Tuesday as strong quarterly profits from Equifax, Hasbro and 3M lifted shares, while oil prices eased back from near their highest level since the war with Iran began in late February. The Associated Press put the Dow up about 1% in early trading, though its versions gave slightly different intraday figures for the S&P 500 and the Dow. Kiplinger reported the Dow closing 1% higher while the Nasdaq slipped marginally. Braze surged on Salesforce's buyout offer, while General Motors fell despite a bigger profit because the midpoint of its full-year forecast fell short of expectations. AI stocks stayed volatile amid worries that high bond-market interest rates will curb the borrowing that funds AI chip purchases.
Key facts
- Hasbro said its Magic: The Gathering game made over $600 million in a quarter for the first time.
- Salesforce will buy Braze for $47.50 per share in cash, valued at roughly $5.66 billion.
- General Motors plans to return up to $20 billion to investors through share buybacks.
- Elice shares fell 32% on their first day of trading in Seoul.
- Housing starts fell 5.2% in September to 1.2 million, Kiplinger reported.
Commentary
Sources: GMToday.com, Kiplinger, Yahoo Finance, Times Leader
3
Oil prices hit a five-month high amid attacks on ships and facilities before easing
Oil prices reached their highest level in five months on Tuesday, according to ABC News, after Iran and its Houthi allies claimed attacks on oil infrastructure and ships in the Middle East. ABC reported Brent briefly topping $111 a barrel, while CNBC reported that prices fell as traders hoped for diplomatic progress between the U.S. and Iran, with attacks on tankers and Saudi Arabia continuing. Iran's Revolutionary Guard Corps said two tankers were set ablaze after hitting mines in the Strait of Hormuz, while Houthi militants claimed a wave of strikes on Saudi Arabia the previous day. The U.S. imports little Middle East crude, but because oil is sold on a global market, the shortage is raising costs for American drivers ahead of the midterm vote, where affordability is a leading voter concern.
Key facts
- Kpler counted at least 18 commercial vessels under fire in the Strait of Hormuz over two weeks.
- CNBC reported Brent December futures settled at $108.79 a barrel, down 0.7%.
- ABC News put WTI at $105.75, while CNBC reported November WTI closing at $101.79.
- U.S. gasoline averaged $4.27 a gallon on Tuesday, according to AAA, up nearly $1.30 since late February.
- Trump said American forces will not attack Iran before the Nov. 3 midterm elections.
Commentary
Sources: ABC7 New York, CNBC
4
Salesforce to Acquire Braze in $5.66 Billion Deal
Salesforce has agreed to buy Braze, a customer engagement and personalized marketing software provider, in a deal that sent Braze shares sharply higher. The purchase extends Salesforce's acquisitive run, following its earlier buy of AI customer service firm Fin, and fits its push to place AI at the core of its offerings after a partnership with Anthropic. Braze is not yet profitable, and the Motley Fool said Salesforce is paying roughly seven times trailing sales. Yahoo Finance reported that completion is expected over the coming year, while the Motley Fool cited a 2027 close.
Key facts
- Salesforce will pay $47.50 per share in cash for Braze.
- Braze shares closed at $45.57, up 51.70% on the day.
- Braze traded 64.6 million shares, about 1,799% above its three-month average.
- Braze has fallen 51% since its 2021 IPO.
- Salesforce shares closed at $242.44, essentially flat.
Commentary
Sources: Yahoo Finance
5
Netflix third-quarter revenue rises 12%, shares fall after the close
Netflix reported third-quarter revenue of $12.9 billion, up 12% year over year, which Yahoo Finance linked to pricing power. Diluted earnings rose to $0.87 per share from $0.59, and the streaming service beat every metric it gives quarterly guidance for, with larger profit surprises than revenue surprises. Shares fell 5.1% after the close as of 4:31 p.m. ET, as investors weighed fourth-quarter guidance that the Motley Fool called muted, with slower sales growth and lower profits. Management tied the weaker margins to seasonal effects and impairment costs from recently announced job cuts.
Key facts
- Netflix closed at $68.66, down 1.70% before its after-close earnings report.
- Trading volume reached 51.3 million shares, about 47% above the three-month average of 34.9 million.
- The S&P 500 rose 0.26% while the Nasdaq Composite fell 0.02% the same day.
- Walt Disney closed up 1.88% at $111.65; Amazon.com rose 0.07% to $262.63.
Commentary
Sources: Yahoo Finance