Musk buys Twitter, Amazon shocks, PCE price

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By Geoffrey Smith — Elon Musk finally completes his acquisition of Twitter, a day before a legal deadline. Amazon is plunging after missing guidance for the third quarter and giving disappointing guidance for the current one. Shares are under pressure as a result, but Apple’s robust numbers are helping to steady the ship. Eurozone inflation is raging again, just a day after the European Central Bank raised market hopes for a quick end to policy tightening, and Exxon Mobil and Chevron posted a monstrous third quarter thanks to high crude oil prices. Here’s what you need to know in the financial markets on Friday, October 28.

1. Musk closes the Twitter deal and fires senior staff

Elon Musk completed his $44 billion takeover of Twitter (NYSE: ) and — according to multiple reports — immediately fired CEO Parag Agrawal and CFO Ned Segal.

Musk’s other immediate first step was to reverse the previous administration’s lifetime ban policy, which paved the way for former President Donald Trump’s return to the social media platform he had dominated until recently, early last year.

It remains unclear how Musk raised the money for the deal, which closed just one day before a court-imposed deadline. Cryptocurrency exchange Binance has confirmed that it has joined a consortium of stock buyers led by Tesla’s CEO.

2. Amazon stumbles with disappointing results and weak forecasts

Amazon (NASDAQ: ) ended a miserable week for Big Tech, falling as much as 20% in after-hours trading Thursday after it missed earnings expectations and provided much lower consensus guidance for the current quarter.

CEO Andy Jassy said on a conference call that the group expected revenue of between $140 billion and $148 billion for the fourth quarter, about $11 billion below consensus. Analysts were also spooked by slowing growth in AWS’s cloud-hosting business, confirming weakness described by rival Microsoft (NASDAQ: ) earlier this week.

Amazon opened slightly off pre-market lows, but is still expected to open at a two-and-a-half-year low.

The news was slightly more upbeat from Apple (NASDAQ: ), which is expected to open slightly higher after strong iPhone sales in the third quarter. Reports of new problems at Chinese iPhone assembly plants used by Apple haven’t changed that.

3. Stocks are expected to open lower due to Amazon’s weight and weaker consumer data.

Amazon’s weak update weighs on US stock markets, which are expected to open lower later.

By 1:30 p.m., they were down 1.1%, heading for a 2.3% decline for the week after megacaps’ serial disappointments during the week. Down 0.5%, while , supported by old economy stocks, fared better with a more moderate decline of 0.1% or 16 points.

The morning was to be dominated by the monstrous quarters of the oil and gas giants Exxon Mobil (NYSE:) and Chevron (NYSE: ), while Colgate-Palmolive (NYSE: ), Charter communication (NASDAQ: ), Aon (NYSE: ) and AbbVie (NYSE: ) are also due to announce their results.

The highlight of the data calendar will be the release of September data as well as the price index for personal consumption expenditures, which remains the most reliable guide to real inflation trends in the economy. There is also the index at 16.00 and data for September.

4. Inflation in the euro area forces the ECB to quickly revise its position; national GDP reports are mixed

Shocks in the euro zone brought an abrupt end to the rally in bonds and stocks that had begun as the European Union softened its language slightly on further rate hikes.

In October, prices rose by 4% in Italy and by 1% or more in France and Germany, as the impact of rising energy prices in all their forms was again underestimated by analysts.

Various Eurozone countries also released Q3 GDP data, with {{ecl-113||France} and {{ecl-402||Spain} coming in below expectations but showing better-than-expected growth of 0.3% compared with the previous quarter.

5. Exxon and Chevron Post Massive Quarter on Soaring Oil Prices

Crude oil prices fell slightly last night, but are expected to end the week close to their highs.

Earlier, Exxon Mobil reported earnings 15% better than the consensus forecast, while Chevron posted a profit of $11.2 billion, also beating expectations.

From At 1:45 p.m., U.S. futures were down 0.9% at $88.31, while U.S. futures were down 0.6% at $94.50.

Data from Baker Hughes and the CFTC will conclude the week later.

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