The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
1147 ET - Even as businesses increasingly report generating value from AI, they have some work to do to mitigate AI risks, according to research firm Gartner. CIOs and ITs heads surveyed by the firm say that AI risk in their organizations is growing faster than AI value, even as 58% of functional leaders in a 2Q survey said that they saw positive value from AI initiatives. Gartner says this increases the pressure to align technology and business risk, something only 25% of CIOs currently do, according to a survey in 3Q. "The new CIO imperative is to align value with risk and align safety with governance," Gartner analyst Daryl Plummer says. "Alignment is the key." (elias.schisgall@wsj.com)
1134 ET - Investors worried about the artificial-intelligence boom running out of steam should look to European and U.K. stocks, Panmure Liberum's Joachim Klement and Francisca Reis write. AI-related stocks need to perform for 2027 earnings-per-share growth targets in the U.S. to be met, the strategists write. Consensus estimates put EPS growth for S&P 500 stocks next year at 29%--5.1 percentage points of which is made up by Nvidia, they say. Close to 44% of the earnings growth is expected to come from technology stocks, they say. Indexes in Europe and the U.K. are much less concentrated, they add.(josephmichael.stonor@wsj.com)
1128 ET - Victoria's Secret looks like it's gaining steam, particularly with younger consumers, ahead of its fashion show tonight, Morgan Stanley analysts say in a note. The bra retailer's growth accelerated across web traffic, total spend and new customer spend in September, likely helped by earlier marketing, the analysts say. That sets up for stronger momentum entering the event than in prior years, they say. "We think this positions the Show to amplify existing demand rather than having to create it, which has been the case in prior years," they say. The analysts point to particular strength with Gen Z, a group they say has been pivotal in successful turnarounds at other brands like Coach, Abercrombie and Gap. (kelly.cloonan@wsj.com)
1119 ET - Major cryptocurrencies are mostly higher, reversing from losses seen last week. The S&P 500 is up 0.8%, in turn giving cryptocurrencies support to rebound from its recent weakness. "Renewed buying has helped stabilize market sentiment, but the foundations of the recovery remain fragile as interest rate pressures persist and investment flows have yet to improve meaningfully," says Linh Tran of XS.com in a note. Lacking spot buying weighs on the crypto complex, but data from Coinglass shows that volumes being traded are significantly higher in the past 24 hours - with bitcoin volume at $53.9 billion, up 57% in the past 24 hours. Bitcoin rises 1.6% to $82,186, ethereum up 2.4% to $2,405, and XRP up 3.2% to $1.30. (kirk.maltais@wsj.com)
1115 ET - Mortgage rates will likely settle around 7% through the fourth quarter thanks to a mix of higher oil prices and weakness in the stock market, loanDepot's Jeff DerGurahian says in a note. That weakness on the equities side, particularly for tech stocks, is bringing buyers back into the bond market, the economist says. But at the same time, high oil prices are fueling inflation concerns that could force the Federal Reserve to raise rates at least once this year, he says. Until one side takes control, rates are stuck, DerGurahian says. (dean.seal@wsj.com)
1105 ET - A new hard-fork of bitcoin called eCash is expected to go live by the end of the month, providing new features and modernizing a blockchain that has seen only sporadic changes since its inception nearly 20 years ago. In a note, analysts with CoinDesk say that eCash $(ECX)$ will activate seven new sidechains for users that opt in. "eCash brings an app platform to Bitcoin, with seven sidechains going live at mainnet launch, from payments and privacy to prediction markets, identity and tokens," says CoinDesk. The fork will take place at block 973,728, says CoinDesk, crediting users with eCash tokens on a 1:1 basis with whatever bitcoin they hold. Bitcoin is up 1.2% to $81,878. (kirk.maltais@wsj.com)
1058 ET - Mullen Group's acquisition of Wilson International is a prudent way to take advantage of changing and uncertain trade policies between Canada and the U.S., says TD Cowen's Tim James. The analyst views the acquisition as "slightly positive," benefiting the logistics company with accretive margins. At the same time, the acquisition is seen as a strategic fit that complements the existing customs brokerage portfolio. James says that decision to acquire Wilson is "likely a reflection of management confidence and the early success of the Cole Group transaction." Shares are up 2.7% to C$27.85. (adriano.marchese@wsj.com)
0944 ET - Major Gulf stock markets end lower Monday, with Saudi Arabia's Tadawul All Share Index falling 0.7%, while the Dubai Financial Market General Index and Abu Dhabi's benchmark index each loses 0.3%. The declines come as investors assess the prospect of further U.S. interest-rate increases following stronger-than-expected inflation data. Emirates NBD Research says higher borrowing costs could weigh more heavily on Saudi Arabia, where inflation remains below 2% and credit growth has slowed. In contrast, higher inflation and recovering lending activity in the U.A.E. could cushion the impact of tighter monetary policy, the bank says. (farhan.rafid@wsj.com)
0929 ET - European earnings revisions bucked a seasonal trend to strengthen ahead of the third-quarter earnings season, Citi strategists say. Companies on the continent have revised their earnings guidance upward in the pre-reporting period for the second consecutive quarter, only the sixth time this has happened over the past 25 years, the strategists say. The backdrop for European equities going into the third quarter earnings season is more constructive than usual, they say. Markets continue to price in upgrades to earnings-per-share growth forecasts over the next 12 months, they say, which could lift the bar for earnings beats to impress investors. The Stoxx Europe 600 falls 1.1% Monday, but remains up 7.7% for the year. (josephmichael.stonor@wsj.com)
0912 ET--Americas Gold & Silver's 3Q production in at its Idaho mine Galena was below forecasts as the company continues to focus on debottlenecking activities and waste development for the ongoing ramp up, says TD Cowen's Wayne Lam. "Q3 output was below consensus on continued ramp up at Galena, offset by stronger production from Cosala driven by higher grades from the heart of the EC120 Zone," Lam says. The analyst says this ramp-up at Galena will continue to be an ongoing theme. "FY guidance was reiterated and we continue to view focus on ramp up execution ahead," Lam adds. (adriano.marchese@wsj.com)
0909 ET - The dollar could lag many other G-10 currencies if AI concerns lead to further stock-market instability, ING's Francesco Pesole says in a note. "Stock-market turmoil is enough to drastically reduce Federal Reserve tightening plans, even with inflation running hot." This affects the dollar's safe-haven appeal. However, the dollar is unlikely to fall considerably despite, he says. The contagion of lower tech stocks to broader U.S and world equity indices has been contained, while Nasdaq falls look modest. The DXY dollar index could fall to 101.000 in coming weeks but not much further, he says. The DXY trades flat at 101.846 after reaching a two-week low of 101.576 Friday. (renae.dyer@wsj.com)
0906 ET - Bitcoin's role in an institutional portfolio is unaffected by short-term market noise, says Cartwright investment consulting director Sam Roberts. For many pension trustees and long-term institutions, the flagship cryptocurrency is unsuitable for long-term allocation, says Roberts. For those that do invest in it, the exposure should be small enough that a total loss wouldn't derail their objectives, while being re-balanced within the portfolio when needed, he says. Bitcoin is 2% higher at $82,501.
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