—— US Initial Jobless Claims Fall to 6 Month Low; US PPI Rises in October; Manhattan Rents Rise to Highest Since July; Disney Share Rises 12% On Better Profitability; Trump to Cancel $7,500 EV Credit Under Biden
1. US Initial Jobless Claims Fall to 6 Month Low
Applications for U.S. unemployment benefits dropped to their lowest level since May last week, suggesting ongoing robust demand for workers despite recent disruptions.
Last week, initial jobless claims fell by 4,000 to 217,000, slightly below the median economist forecast of 220,000 from a Bloomberg survey. This decrease reflects a stabilizing labor market following disruptions from severe weather in the Southeast and a protracted strike by Boeing Co. workers.
Moreover, the four-week moving average of new claims, which smooths out weekly volatility, also declined to 221,000, marking its lowest point since May, according to data from the Labor Department released on Thursday.
This indicates sustained labor market strength as it adjusts from recent disturbances.
Source: Bloomberg – US Initial Jobless Claims Dropped to Lowest Since May Last Week
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2. US PPI Rises in October
U.S. producer prices increased in October, driven partly by higher costs in portfolio management and other services relevant to the Federal Reserve’s preferred inflation measure.
According to the Bureau of Labor Statistics, the producer price index (PPI) for final demand rose 0.2% month-over-month after a revised 0.1% increase in September. Year-over-year, the PPI went up by 2.4%.
Excluding the more volatile food and energy categories, the core producer prices saw a more significant increase of 0.3% for the month and 3.1% on an annual basis.
This rise in wholesale prices comes after recent consumer price index data indicated that core consumer inflation remains persistently high.
Despite a general cooling of inflation this year, recent stagnation in price reduction, coupled with concerns over potential tariff increases by the upcoming Trump administration, adds to the uncertainties surrounding future inflation and interest rate trajectories.
Source: Bloomberg – US Producer Prices Rise, Risking Pressure in Fed’s Favored Gauge
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3. Manhattan Rents Rise to Highest Since July
In October, Manhattan apartment rents surged to their highest level in three months, reflecting peak-season pricing trends. The median rent for new leases climbed 2.4% year-over-year to $4,295, marking the first annual increase since April, according to a report from brokerage Douglas Elliman Real Estate and appraiser Miller Samuel Inc.
Rental prices also rose in surrounding boroughs. In Brooklyn, the median rent for new leases in October reached $3,600, up 3.2% from the previous year. In northwest Queens, including Long Island City and Astoria, the median rent increased by 4.8% to $3,350.
This uptick in rents follows a brief period of easing, attributed to lower mortgage rates in September that enticed some renters to purchase homes. However, as borrowing costs spiked in October, surpassing 7% by some measures, the pressure on rental markets intensified.
Jonathan Miller, president of Miller Samuel, noted that rental rates tend to correlate with mortgage rates, stating, “The higher the mortgage rate, the higher the rent.”
Source: Bloomberg – Manhattan Apartment Rents Rise to Highest Level Since July
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4. Disney Share Rises 12% On Better Profitability
Walt Disney Co. exceeded Wall Street’s expectations for fiscal fourth-quarter sales and profit and provided a positive earnings outlook for the next three years, a departure from its usual practice of not issuing long-range profit forecasts.
The company reported earnings per share of $1.14, excluding certain items, surpassing the Bloomberg-compiled analyst average estimate of $1.10. Disney has set an optimistic earnings target, predicting high-single-digit growth in adjusted earnings for fiscal 2025, which is higher than the current analysts’ estimates of 4% growth. For fiscal 2026 and 2027, the company anticipates double-digit profit increases.
Disney shares rose as much as 12% in New York trading following the announcement, marking the most significant increase since February. This financial performance is a reflection of the strategic changes implemented by CEO Bob Iger.
Contributing factors to the strong earnings include successful releases from Disney’s film studio, such as “Inside Out 2” and “Deadpool & Wolverine,” and consecutive quarterly profits from its streaming operations, which include Disney+.
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5. Trump to Cancel $7,500 EV Credit Under Biden
Shares of U.S. automakers declined following a Reuters report that President-elect Donald Trump intends to scrap the $7,500 consumer tax credit for electric vehicles (EVs).
According to the report, which cites anonymous sources familiar with the discussions, Trump’s transition team is considering ending the subsidy as part of a wider tax reform initiative. Surprisingly, representatives from Tesla Inc. reportedly support the elimination of the credit.
The repeal of this subsidy, a key element of President Joe Biden’s Inflation Reduction Act aimed at climate mitigation, could severely impact EV adoption in the U.S. Challenges such as high vehicle prices and inconsistent charging infrastructure have already hampered uptake. Trump has vowed to dismantle Biden’s EV policies starting from his first day in office.
Among the major EV manufacturers, Rivian Automotive Inc. experienced the most significant drop, with shares tumbling up to 11% in New York trading. Tesla shares also fell sharply, dropping by as much as 4.7%.
General Motors Co. and Ford Motor Co. saw initial declines in their stock prices, although they later managed to recover some of their losses.
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6. Stock Rally Stalls as Inflation Picks Up
The recent surge that propelled stocks to record highs has diminished, with the stock market losing momentum while Treasury yields spike and the dollar reaches a two-year peak, all unfolding before the release of crucial inflation data.
The decline in equities occurred after the S&P 500 experienced its most substantial five-day rally in over a year. The gains that followed the election dissipated, particularly affecting small caps and banks, while results among megacaps were varied—Nvidia Corp saw an increase, but Tesla Inc faced a decrease. Concurrently, Bitcoin retracted after nearing the $90,000 mark. The dollar achieved its highest level since November 2022, and the euro fell to its lowest in a year. Treasury yields rose in anticipation of upcoming consumer price data, which is expected to indicate an increase in inflation. This potential rise in inflation could dampen expectations for a Federal Reserve rate cut.
Will Compernolle from FHN Financial commented on the situation, noting, “A hot CPI and/or strong retail spending could push two-year yields above 4.45% (from around 4.3%) if a December rate cut starts looking imprudent.”
This reflects concerns that stronger economic indicators might discourage the Federal Reserve from reducing interest rates further, influencing bond yields and overall market sentiment.
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7. ValueAct Takes $1bn Stake in Meta
ValueAct Capital Management has acquired a $1 billion stake in Meta Platforms Inc., the parent company of Facebook, according to a source familiar with the situation.
This investment is described as passive, with ValueAct currently not intending to initiate any activist actions at Meta. The source, who preferred to remain anonymous as the details are not yet public, mentioned that ValueAct might disclose this position in an upcoming filing, potentially this week, coinciding with the Nov. 14 deadline for investors to submit their 13F filings to the Securities and Exchange Commission.
ValueAct, based in San Francisco, has a history of advocating for changes at various companies, including Walt Disney Co.
CNBC was the first to report ValueAct’s investment in Meta. Under the leadership of CEO Mark Zuckerberg, Meta reported last month a 19% increase in third-quarter sales year-over-year.
The company’s growth is primarily driven by its social networks, Facebook and Instagram, alongside significant investments in AI and other advanced technologies. Over the past year, Meta’s stock has increased by 77%.
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本文内容来自《Financial Times》、《Bloomberg》，以及《The Real Deal》等多家财经新闻媒体。