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Straits Times
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BMV IPC
49,894.16
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Dow Jones
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DAX 30
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FTSE 100
7,630.63
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JSE Top 40
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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.
