Wells Fargo rises on quarterly profit results


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Last Week’s Highlights

Wells Fargo’s quarterly profits rise

Wells Fargo beat earnings estimates in the third quarter, raising its annual interest income forecast as customers paid more to borrow, driven by tightening monetary policy in the U.S. Despite the economic resilience, the bank is experiencing a decline in loan balances and a moderate deterioration in charge-offs. Although the stock rose 2% in response to the results, Wells Fargo remains cautious about the economic future. The bank also faces challenges in its commercial real estate office portfolio. Despite this, quarterly earnings beat expectations, and Wells Fargo plans to return more capital to shareholders despite regulatory proposals to increase capital levels.

JPMorgan beats estimates

JPMorgan Chase beat third-quarter earnings expectations, driven by higher borrowing costs and the acquisition of First Republic Bank. The purchase of billions of dollars in loans from First Republic strengthened net interest income to record levels, leading to a 30% increase in net income. Although the bank released reserves and the outlook for investment banking improved slightly, economic uncertainty remained. The bank continues to expand in the consumer business, but executives expressed concerns about proposed tighter capital regulations.

Coming Up This Week

OpenAI plans a stock sale

OpenAI plans a private equity offering that would value the company at $90 billion, marking significant growth from an earlier estimate of $80 billion. The investment is driven by investor interest, mostly from the Middle East, although fundraising may be affected by the ongoing conflict between Israel and Hamas. OpenAI has also earmarked its proceeds to invest in AI operations, such as an $8 million investment in Anysphere, a company focused on developing native AI software. Microsoft (MSFT), on the other hand, has a bullish Wall Street projection for 2023, with a Strong Buy valuation and an average price target of $397.19 per share, implying a potential upside of 20.76%.

Victoria’s Secret to bring back successful formula

Victoria’s Secret is looking to revitalize its brand, returning to the successful formula of a decade ago by reintroducing effective sales pitches and diversifying its product offerings to adapt to current trends. Despite its stagnation in the North American market, the company plans to boost its growth internationally. Wall Street analysts maintain a “Hold” rating on shares of VSCO, the parent company of Victoria’s Secret, with an average price target that suggests an upside potential of 30.61%, indicating some optimism in the brand’s recovery.

All information provided was collected up to the last business day of the previous week of the release of this NewsFlight. The purpose of NewsFlight is to summarize and make accessible information on a variety of topics within the world of investing and personal finance, and thus cannot be considered formal research or reports. All sources utilized to compile the NewsFlight newsletter are considered trustworthy by the FlexInvest team. FlexInvest is not affiliated with and does not receive remuneration from the news sources used to compile NewsFlight. As well, any images or logos incorporated into the NewsFlight newsletter are not necessarily property of FlexInvest and may solely be included to provide context for the news covered. NewsFlight should not be taken as advice to sell or buy securities or to make any investment. When investing in securities or other financial products, there is always the potential to lose money or asset value. FlexInvest recommends that its users consider their investment objectives and risks before investing. Additionally, any projections or analysis made by authors of NewsFlight cannot be considered as a promise of future trends or returns. Opinions expressed in NewsFlight are not representative of FlexInvest.

Market News

On Friday, the S&P 500 and Nasdaq closed lower due to falling consumer confidence and concerns about the situation in the Middle East, overshadowing positive quarterly results from US banks. Despite a bullish open on Wall Street, deteriorating U.S. consumer confidence and news of incursions into the Gaza Strip by Israel influenced investors’ decision to avoid riskier assets.

Even though, the S&P 500 had a modest weekly advance of 0.45%, while the Nasdaq fell 0.18% and the Dow experienced gains of 0.79%, breaking its two-week losing streak.

Wild Card

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