The news shaping the markets today

The deputy secretary of the Security Council of the Russian Federation, Alexander Venediktov, warned that Ukraine’s admission to NATO could result in World War III. The ongoing tensions sent WTI crude oil prices higher this morning.

China’s annual inflation accelerated to 2.8% year-over-year in September, from 2.5% in the previous month. This being the highest reading since April 2020 exerted pressure on the CNY/USD forex pair.

India’s total passenger vehicle sales climbed by 9.3% to 307,389 units in September, following a 4.3% decline in the previous month. Despite this, the INR/USD pair fell slightly in forex trading this morning.

Singapore’s economy grew by 4.4% year-over-year in the third quarter, following a 4.5% expansion in the previous quarter. The latest reading also exceeded market estimates of 3.4% growth, which lent support to the SGD/USD forex pair.

New Zealand’s BusinessNZ Performance of Manufacturing Index declined to 52.0 in September versus 54.8 in the prior month. The manufacturing sector continues to be in the expansion zone sending the NZD/USD pair higher in forex trading this morning.

What’s happening: Shares of Walgreens Boots Alliance surged on Thursday, after the company released results for its fourth quarter.

What happened: Although Walgreens swung to a loss in the quarter, it managed to exceed market expectations.

The drugstore chain was adversely impacted by some factors that could continue to impact its business ahead.

How were the results: The Deerfield, Illinois-based company reported a decline in sales and earnings in the quarter that ended August 31, but both metrics still topped market views.

• Sales declined by 5.3% year-over-year to $32.4 billion, also down 3.2% on a constant currency basis, but still surpassed the consensus estimate of $32.12 billion.
• Net loss came in at f $415 million, or 48 cents per share, versus a year-ago profit of $627 million, or 72 cents per share.
• Adjusted earnings came in at 80 cents per share, down 30% on a constant currency basis, but exceeded market expectations of 77 cents per share.

Why it matters: Walgreens had been benefiting from the administration of covid-19 vaccines, which helped minimise losses from lower prescription volumes and sales of over-the-counter wellness products. However, the company warned that vaccination demand is likely to ease in the ongoing quarter.

The pharmacy chain’s US pharmacy sales fell 8.8% last quarter, as it reported the administration of 2.9 million covid-19 vaccinations and 3.4 million PCR tests, down significantly from the 13.5 million vaccinations in the year-ago period. The unit was also negatively impacted by the contraction of its AllianceRx business.

Comparable sales at the UK-based division, Boots, climbed 15.2% year-over-year, despite a 6.9% decline in overall pharmacy revenues.

Adjusted operating income fell 38.2% to $744 million. The company posted a loss for the quarter amid an increase in operational costs and an impairment charge associated with its Boots division.

“Our resilient business achieved growth while navigating macroeconomic headwinds. Fiscal 2023 will be a year of accelerating core growth and rapidly scaling our U.S. Healthcare business,” CEO Rosalind Brewer said during the earnings call.

Management guided to adjusted earnings of $4.45-$4.65 per share for fiscal 2023, versus market estimates of $4.53 per share, with strong growth in the company’s core business being offset by currency headwinds.

How shares responded: Shares of Walgreens gained 5.4% to close at $33.65 on Thursday following the release of quarterly results. The stock had lost around 25% over the past six months.

What to watch: Investors will keep an eye on the spread of covid-19, as a decline in vaccinations is expected to impact the company’s overall results in the ongoing quarter. Markets will also monitor the US dollar, which has been exerting pressure on the company’s overseas business.

The markets today

US stocks will be in focus today ahead of a basket of economic reports

Context: Wall Street stocks rose sharply on Thursday following the release of inflation data.

Details: US stocks staged a sharp rebound on Thursday, after a sell-off earlier in the session as investors bought back riskier assets after monitoring the latest US inflation data.

The US Labor Department released its CPI (consumer prices index) data, which showed headline prices rising 8.2% on an annualised basis in September, down from 8.3% in August. However, the data came in higher than market expectations of 8.1%. The core rate, excluding volatile food and energy prices, rose to 6.6% last month, the highest since August 1982.

The higher-than-expected inflation reading for September increased speculations of the US Federal Reserve announcing a big rate hike at its November meeting.

The US dollar fell versus most major currencies following the data. The greenback also pared gains against the Japanese yen, after briefly climbing to a 32-year high.

The S&P 500 climbed 2.6% to settle at 3,669.91 on Thursday, after declining by 5.7% over the past six sessions. Earlier in the session, the benchmark index had fallen around 2.3% to its weakest level since November 2020.

The Dow Jones index surged 827.87 points, or 2.83%, to close at 30,038.72, while the Nasdaq 100 jumped 2.3% to 11,033.58.

What to watch: Traders await the release of economic data on retail sales, import prices, export prices, and consumer sentiment from the US today. Retail sales in the US, which grew by 0.3% in August, are expected to rise by 0.2% in August. Analysts expect import prices to decline by 1.3%, while export prices are projected to rise by 0.8% in September. The University of Michigan’s consumer sentiment data is expected to ease slightly to 58.3 in October, from 58.6 in September.

Other Markets: European trading indices closed higher on Thursday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 up by 0.35%, 1.51%, 1.04% and 0.85%, respectively.

Support & resistances for today

Market snapshot

What else to watch today

Germany’s wholesale prices, France’s inflation rate, Spain’s consumer prices, Eurozone’s balance of trade, Turkey’s total motor vehicles production, India’s monetary policy meeting minutes, wholesale price inflation rate, foreign exchange reserves, total passenger vehicles sales, the balance of trade, exports and imports, Canada’s new motor vehicle sales, manufacturing sales and wholesale sales, US business inventories and Baker Hughes crude oil rigs, as well as Argentina’s inflation rate.

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