Daily Update: Third Presidential Debate Looms

STOCK NEWS

Morgan Stanley (MS): reported Q3 EPS of $0.81 which beat expectations by 18 cents. Revenues of $8.91 billion were up 21.6% which beat estimates by $740 million. Institutional Securities pretax income was $1.4 billion which more than doubled from last year. Fixed income revenue of $1.5 billion was up from $583 million last year. Equity returns rose to $1.9 billion. Advisory revenue fell from $557 million to $504 million.

Kroger (KR) : The NY Post is reporting that Kroger may not buy the 650 stores that would allow Walgreens and Rite Aid to merge. The FTC told Kroger the stores could not be purchased and closed. However, the FTC and Walgreens are motivated to find a remedy, so the deal is not necessarily off.

Hewlett Packard Enterprise (HPE) : projects 2016 revenue to grow at a rate of 1% to 2% year over year and EPS to reach $1.90 to $1.95 which was the high end of the original outlook. Free cash flow is expected to be $1.7 billion to $1.9 billion and share repurchases and dividends will be $3 billion. CEO Meg Whitman said the following “Hewlett-Packard Enterprise is in a strong position. We have a clear strategy, aligned to the market opportunity, and will be more focused than ever on how we innovate in our business models, our products, our solutions and our go-to-market.”

Halliburton (HAL) : reported Q3 EPS of one cent per share which beat estimates by 8 cents. Revenue of $3.83 billion was down 31.4% from last year and missed estimates by $70 million. North American sales were up 9% quarter over quarter to $1.66 billion. CEO Dave Lesar said Halliburton is cautious about Q4 activity due to holiday and seasonal weather-related downtime but says things are getting better for the firm and its customers.

ECONOMIC NEWS

The big event will be the presidential debate tonight with Trump heading into it down about 6 percent in the latest polls. Given how volatile the swings have been in the polls, the concept that Hillary has already won the election is false. If Hillary is cautious and Trump is aggressive, he can win the debate and regain momentum. This would send stocks lower. If Hillary wins the debate, the market will continue to focus on earnings since it believes she will win.