The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
1251 ET - The economics of running Meta's Muse AI agent remain uncertain even following the company's 3Q earnings call, StoneX analysts Mark Zgutowicz and Alex Lavigne say in a note. Meta currently offers paid subscription tiers for Muse, and plans to collect fees on transactions that Muse facilitates. But it's not clear whether this revenue stream will be sufficient to support the activity of free users, around 75% of which is unrelated to commerce, and the compute demands of paid users, the analysts say. "Muse's engagement disclosures provide evidence of utility, but considerably less evidence of incremental monetization," they say. Meta falls 7.4%.(elias.schisgall@wsj.com)
1157 ET - IBM will need to strike some deals in order to hit its target for 5% constant-currency revenue growth next year, Morgan Stanley analysts write in a note. Even assuming a better-than-expected infrastructure cycle and an acceleration in organic software growth next year, the company is not on track to hit the target, the analysts write. "This means we are on IBM M&A watch for the remainder of the year, as it's the final bridge towards IBM reaching Street revenue forecasts in 2027, in our view," they write. They maintain an equal-weight rating and bump up their price target by $2 to $240. Shares of IBM fall 1.3% to $248.27. (elias.schisgall@wsj.com)
1126 ET - Hermes reported a mixed set of numbers for the third quarter, which could be seen as disappointing, Deutsche Bank analysts say. The French luxury house recorded a 4.3% increase in revenue for the quarter ended September, missing consensus estimates of a 5.3% increase. The performance in the Americas, Japan and Asia excluding Japan came in below expectations, the analysts write in a note to clients. The miss at the group level, coupled with weakness in the ready-to-wear and accessories division and softer regional growth outside Europe, outweighs the strong performance of the leather goods segment, the bank says. Shares are down 6.8%. (andrea.figueras@wsj.com)
1125 ET - Although much of the focus among prediction markets is coming from attracting more institutional money to the space, retail investors have been wielding more power in directing markets than many realize, says JB Mackenzie of Robinhood. Speaking at the NEXTPreidict summit in New York, Mackenzie uses the example of airline stocks during the Covid-19 epidemic as retail investors flexing their control. With the advent of widespread proliferation of smart phones, these investors are not much behind in computing capabilities to other more-established technologies trading, Mackenzie says. (kirk.maltais@wsj.com)
1124 ET - The sharp pullback in artificial-intelligence stocks is driven by uncertainty over companies' ability to monetize the technology, M&G Investments' head of global equities Dan White says. Higher borrowing costs are forcing investors to scrutinize more closely the balance sheets of chip makers and data centers, White says. "Rising borrowing costs doesn't kill AI monetization, but it does make capital discipline far more important," White says. "Cheap capital can mask weak economics, and expensive capital tends to reveal [them]." Technology stocks will underperform the broader market, White says. The Nasdaq is on track for its worst day since June as the Philadelphia Semiconductor Index falls 6%.(josephmichael.stonor@wsj.com)
1121 ET - Prada's main brand is showing strength, but the company still has more to prove, analysts at Citi say in a research note. The Italian fashion house said sales were flat in the third quarter. Prada recorded a 1% increase on year, while Miu Miu posted a 3% drop. A slight revenue beat at the group's namesake brand should be well received despite Miu Miu turning negative for the first time since the pandemic, the analysts say. "A sustained reacceleration at Prada, stabilization at Miu Miu and greater visibility on Versace's path to profitability are likely required for a more constructive investment case," they add. Citi maintains its neutral rating on the stock. Shares closed at 38.60 Hong Kong dollars. (andrea.figueras@wsj.com)
1121 ET - Comcast's theme-parks sales declined in the third quarter, with Co-Chief Executive Mike Cavanagh citing pressure on demand in Orlando and certain international markets. The company was behind its competitors in recognizing the weak trends and adapting its marketing strategy, Cavanagh says. He also points to continued capacity challenges and ride throughput at Epic Universe, which opened last year. "We are taking action to address both of these challenges," he says during a call with analysts. Cavanagh says he sees the softness as temporary, and expects performance to improve moving through 2027. "While the path may not be linear, particularly given the broader operating environment, we remain confident in the underlying strength of the business," he says. (kelly.cloonan@wsj.com)
1114 ET - Retail investors are spurring an evolution in what's the most interest-grabbing of prediction market contract offerings. Speaking at the NEXTPredict Summit in New York, JB Mackenzie, general manager and vice president of futures and prediction markets at Robinhood, says that interest is moving away from things like 'mention markets' and sports and toward other economic questions. "The handling of the U.S. economy has been the top topic," says Mackenzie, noting big volumes in contracts ahead of last month's Fed decision. It's also potentially signaling that the U.S. economy is the biggest issue for voters in those year's midterm elections. (kirk.maltais@wsj.com)
1105 ET - While Canada has ambitious infrastructure goals, Mullen Group sees mining as the only sector delivering growth. Speaking to investors, Chair and Senior Executive Murray Mullen notes that capital will eventually flow toward Canada's major infrastructure builds, the timeline isn't certain. "This is Canada," Mullen says. "It sometimes takes a long time to get these projects off the drawing board and to shovels working." Until then, Mullen expects the company will be mindful of its capex until projects are confirmed. As a result, he says the logistics company plans to hold back on major capital expenditures until projects are officially approved, continuing to direct capital toward active growth areas like mining. (adriano.marchese@wsj.com)
1055 ET - Bitcoin's outlook depends on whether inflows into bitcoin exchange-traded funds hold up if equities continue to fall, Nexo Dispatch analyst Iliya Kalchev says in a note. Worries about the cost of the AI buildout have triggered a global selloff in technology shares, sending bitcoin lower, he says. ETF buying has returned, albeit at a slower pace, he says. "U.S. spot funds attracted more than $1.08 billion across the first three sessions of the week, per SoSoValue, yet their average since July 1 is only about $86 million a day, well below the $200 million-plus daily average during each of the three strong rallies since 2024." Bitcoin falls 3.5% to $81,649, LSEG data show. (renae.dyer@wsj.com)
1044 ET - Without fund traders throwing their full weight into participating in the prediction markets, young traders utilizing AI tools are making a lot of money in these markets. "The majority of really sharp money in the space right now is what we call 'garage band traders,'" says Seni Thomas, CEO of Edge Markets, during a panel discussion at the NEXTPredict Summit held in New York this week. While fund traders are expected to take the lead in the market segment, some analysts anticipate that trading may soon serve as an alternative to working a traditional job. (kirk.maltais@wsj.com)
1027 ET - Comcast's streaming service Peacock ended 3Q with 48 million paid subscribers. That's up 17% year-over-year, but flat with 2Q. Peacock, home to shows like "Love Island," hiked subscription prices in August. Other streaming players like Disney, Netflix and Paramount have similarly raised prices for their services this year. Peacock's revenue rose 34% year over year to $1.82 billion in the quarter.
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