U.S. Futures Tumble on Peak Profit, Trade Concerns: Markets Wrap [Bloomberg]
The sell-off in U.S. equities put the S&P 500 Index on track for its 12th loss in 14 days as investors grow concerned that the trade war and rising interest rates have put an end to runaway expansion of corporate profits. Caterpillar sank 6 percent in early trading after flagging concern over rising materials costs, while 3M dropped 5 percent after cutting its forecast.
The Stoxx Europe 600 Index slid toward the lowest level since December 2016 as Asian equities teetered on the verge of a bear market. Some of the steepest losses were in Japan, Hong Kong and China, where shares had posted the biggest jump in more than two years a day earlier. Disappointing earnings from Renault and some European tech companies added to the pain in Europe. Gold headed for its highest close in three months and benchmark Treasury yields dropped to 3.16 percent.
Turkey demands to know who ordered 'savage' Khashoggi killing [Reuters]
In a speech to parliament about a case that has sparked outrage around the globe, Erdogan did not mention Crown Prince Mohammed bin Salman, who some U.S. lawmakers suspect ordered the killing.
But he said Turkey would not complete its investigation into Khashoggi’s death until all questions were answered.
“Intelligence and security institutions have evidence showing the murder was planned.... Pinning such a case on some security and intelligence members will not satisfy us or the international community,” he said.
Caterpillar shares dive 7% after industrial giant says material costs are rising because of tariffs [CNBC]
The company reiterated its prior 2018 adjusted earnings guidance to range of $11 to $12 per share, but Wall Street expected the company to raise that forecast. The lower range of that forecast fell short of the $11.65 EPS estimated by analysts surveyed by Refinitiv.
"Manufacturing costs were higher due to increased material and freight costs. Material costs were higher primarily due to increases in steel prices and tariffs," the company said. "Freight costs were unfavorable primarily due to supply chain inefficiencies as the industry continues to respond to strong global demand."
Later in the statement, the company said the impact of tariffs for third-quarter material costs was about $40 million.
SoftBank Chief Is Said to Have Canceled Appearance at Saudi Conference [NYT]
Word of Mr. Son’s decision not to attend came on Tuesday, the first day of the conference. A representative for SoftBank, the Japanese internet, energy and financial conglomerate, did not immediately respond to a request for comment.
High-profile executives from around the world have steadily pulled out of the conference as the furor has grown over Mr. Khashoggi’s killing this month at the Saudi Consulate in Istanbul.
Big Oil’s Flood of Cash Underwhelms Investors [WSJ]
The world’s six largest Western energy companies— Exxon Mobil Corp. , Chevron Corp. Royal Dutch Shell PLC, BP PLC, Total SA and Equinor AS A—are set to generate their biggest profits since 2013. At the same time, they are projected to produce $90 billion in excess cash, the most in a decade, according to S&P Global Market Intelligence.
Yet while the price of the global oil benchmark has surged around 20% so far this year, those six companies have seen their shares rise by an average of roughly just 4%, according to FactSet. In the past, energy stocks have moved more in line with the price of crude. While the European companies have seen their share prices rise this year, both Exxon’s and Chevron’s stock has fallen.
Former Oculus CEO Brendan Iribe is leaving Facebook [Verge]
Iribe was an Oculus co-founder, helping Rift inventor Palmer Luckey to launch the experimental headset on Kickstarter in 2012. He served as CEO until 2016, when he stepped down to lead Oculus’ PC-based Rift VR division, and the CEO position was replaced by a “Facebook VP of VR” role held by Hugo Barra. Iribe was conspicuously absent at last month’s Oculus Connect conference, where fellow co-founder Nate Mitchell handled press interviews — and where PC-based VR was basically an afterthought, compared to standalone mobile headsets. VRFocus confirms that Mitchell will lead the division going forward.