Business

Amid the Dow Jones making fresh all time highs on the back of solid earnings by key Dow components, a largely unreported adverse development for the critical - for tech companies - ad sector has gone largely unnoticed this morning, when ad giant Interpublic reported a miss on 3Q adjusted EPS and revenue estimates, with CEO Michael Roth warning that "organic revenue was negatively impacted by broader trends that are being felt throughout much of the industry."

Interpublic now sees FY organic revenue growth of 1%-2%, below Jefferies' estimate of 2.1%.

Submitted by Bill Blain of Mint Partners

“Rate yourself and rake yourself, take all the courage you have left, wasted on fixing all the problems that you made in your own head.”

All the usual uncertainty, but are global stocks really so highly overvalued relative to GDP?

Via VariantPerception.com,

In August, we had reviewed a few charts showing that US high yield valuations were divorced from fundamentals, as well as to other yield products. This week, refreshing those charts, we can see that things are just as bad.

The top-left chart shows that US high yield spreads are diverging from the tightening of bank lending standards relative to credit demand.

 

Dow futures are higher by over 100 points following a spate of big beats among Dow components including 3M, GM, UTX, but none more so than Caterpillar which just announced blockbuster Q3 EPS of $1.95, nearly 50% higher than the $1.22 consensus estimate (and above the highest forecast), on revenue of $11.4 billion, which also was well above the $10.73 billion expected, which also was at the top end of the range.

European shares are modestly lower as investors monitor tense events in Spain and as focus turns to Thursday’s ECB meeting; US equity futures have rebounded from yesterday's sharp but shallow selloff and are in the green amid rising odds of U.S. tax reform and the imminent unveiling of the next Fed chair while Asian shares rise and Japan extends its winning streak to a record 16 days. The euro edged higher after data showed Europe’s economy is maintaining momentum, while the USDJPY managed to recover all of yesterday's sharp losses.