What's moving markets today: October 30, 2019

By CNN Business

Updated 4:23 p.m. ET, October 30, 2019
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2:05 p.m. ET, October 30, 2019

Fed cuts rates for the third time as US economy slows

From CNN's Donna Borak

The Federal Reserve cut interest rates for the third time this year as the US economy continued slowing amid ongoing trade disputes and weak global growth.

The federal funds rate, which affects the cost of mortgages, credit cards and other borrowing, will now hover between 1.5% and 1.75%.

It isn’t clear whether the move will be enough to head off another rate cut in December, the final meeting of the year. Federal Reserve chairman Jerome Powell is set to speak at a press conference later Wednesday afternoon.

2:01 p.m. ET, October 30, 2019

Why today's Fed action is more of an insurance cut

From CNN Business' Anneken Tappe

With the US economy showing solid, albeit slowing, economic growth in the third quarter, market participants are debating whether another interest rate cut is really necessary. But in spite of some pockets of strength, the Federal Reserve action really is needed, said Danielle DiMartino Booth, CEO and chief strategist at Quill Intelligence on CNN Business' digital live show Markets Now.

"Everything will depend on the press release today," she said.

Fed Chairman Jerome Powell could lean on the evidence from this morning's GDP report showing that the American consumer is still strong, said DiMartino Booth.

But strong consumer spending or not, a rate cut today is indeed necessary, DiMartino Booth said. "There are signs that unemployment is ticking up," she said, and other areas of the economy are showing weakness. The manufacturing and mining sectors have faced job cuts, for example. and the jobs numbers will be something to pay attention to in Friday's jobs report, she said.

12:53 p.m. ET, October 30, 2019

Rate cut ahead!

From CNN Business' Anneken Tappe

With only about an hour to go until the Federal Reserve publishes its monetary policy decision, investors are expecting another interest rate cut.

"We're expecting to see a 25 basis point cut today," John Stoltzfus, chief investment strategist and managing director at Oppenheimer Asset Management told Alison Kosik on CNN Business' digital live show Markets Now.

The cut -- the third one in a row for the US central bank -- will mostly be for insurance, rather than meaning that the economy "is in a bad way," Stoltzfus said.

Another cut would turn the market's attention back to the trade war.

"If we get a cut today, we'll have to see what happens with the meeting between Trump and Xi," Stoltzfus said.

President Donald Trump and China's President Xi Jinping were set to meet and sign a "phase one" trade agreement reached earlier this month at the APEC meeting in Chile. But the South American country said today it would no longer host.

11:14 a.m. ET, October 30, 2019

Yum! Brands is a casualty of GrubHub's flame-out

By CNN Business' Paul R. La Monica

The $200 million investment that Pizza Hut, KFC and Taco Bell owner Yum! Brands (YUM) made in food delivery company GrubHub (GRUB) in early 2018 is leaving a bad taste in Yum investors' mouths.

Yum said in its latest earnings report Wednesday that it incurred a $60 million pre-tax expense tied to its GrubHub investment, a charge that lowered Yum earnings by 15 cents a share.

GrubHub's stock plunged more than 40% Tuesday following a brutally bad quarter and concerns about a costly delivery price war brewing between GrubHub, Uber Eats, Postmates and DoorDash. GrubHub blamed free delivery and promotional support for Yum and other big national restaurant partners for the weak results and outlook.

Yum has other problems, though: Pizza Hut's comeback has stalled.

The chain had put up impressive sales growth numbers recently, tied in part to its official sponsorship deal with the NFL. That deal, now in its second year, was inked after the NFL parted ways with troubled Papa John's (PZZA) last year.

But Pizza Hut's same-store sales, which measure how restaurants open at least a year are doing, were flat in the quarter. That bad news, coupled with the hit from GrubHub, was more than Yum investors could stomach. Shares plunged nearly 10% Wednesday.

10:36 a.m. ET, October 30, 2019

A good toy story: Mattel soars on solid sales

From CNN Business' Paul R. La Monica

Shares of toy giant Mattel (MAT) surged nearly 20% Wednesday after the Barbie and Hot Wheels maker reported sales and earnings that topped forecasts and a bullish outlook for the holidays.

That wasn't the only good news. Mattel also said it concluded its internal review of a whistleblower allegation of accounting irregularities. The end result: Mattel said it did understate income tax expenses in the third quarter of 2017 but it also overstated them by the same amount in the fourth quarter of that year. In other words, it was a wash.

Still, Mattel did announce it plans to hire a new chief financial officer and said that current CFO Joseph Euteneuer would be stepping down following a transition period of about six months.

But investors were clearly relieved by the good news regarding sales, especially because of concerns about the demise of Toys "R" Us -- a key retail partner -- and the threat of more tariffs on toys made in China. Rival Hasbro (HAS) has already warned that the tariffs will eat into its holiday quarter profits.

Mattel CEO Ynon Kreiz told analysts Tuesday that the tariffs won't be as big a problem for Mattel. That's because less than two-thirds of its toys are imported from China compared to an industrywide average of about 85%.

9:33 a.m. ET, October 30, 2019

Stocks open higher after GDP report

From CNN Business' Anneken Tappe

US stocks opened higher on Wednesday, after the Commerce Department said the American economy grew faster than expected in the third quarter of the year.

Even so, GDP growth slowed for the second quarter in a row.

Both the S&P and the Dow gave up their modest gains within the first minutes of trading.

Earnings season continues to roar on, with Apple (AAPL), Facebook (FB) and Starbucks (SBUX) due to report after the bell.

9:34 a.m. ET, October 30, 2019

The US economy is slowing

From CNN Business' Anneken Tappe

The US economy grew at an annualized rate of 1.9% in the third quarter, the Commerce Department announced Wednesday.

This is the preliminary reading of US gross domestic product, the broadest measure of the American economy. The Commerce Department will update its estimate twice more.

Although the economy's growth is slowing, it remains relatively strong. However, the third quarter marks the first time since the final quarter of 2018 in which the US economy has grown at a rate slower than 2%.

Read the full story here.

9:06 a.m. ET, October 30, 2019

Private payrolls climb more than expected

From CNN Business' Anneken Tappe

ADP employment data showed that private sector employment expanded by 125,000 jobs in October, more than expected.

The Refinitiv consensus estimate had been 120,000.

Investors watch these numbers closely ahead of Friday's jobs report, which is expected to be weaker thanks to the month-long strike at General Motors (GM).

8:13 a.m. ET, October 30, 2019

Stock futures are flat ahead of GDP data

From CNN Business' Anneken Tappe

US stock futures are pointing to a flat open ahead of the third-quarter GDP report, which will be released at 8:30 am ET.

Futures of the S&P 500 and the Dow are little changed, while Nasdaq Composite futures are up 0.1%.

The American economy is expected to have grown 1.6% between July and September, according to economists polled by Refinitiv.