Good morning investors! Big earnings continue to come mixed as stocks slide due to pressure.
Today we cover:
Shutdown continues.
Tesla revenue jumps.
More earnings (SAP, IBM, etc.)
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📊 Economy and News
U.S. Government Shutdown Hits 22 Days, Second-Longest in History
The U.S. government shutdown, now in its 22nd day as of October 22, 2025, is the second-longest federal funding lapse in U.S. history, with no resolution in sight. Both this and the longest shutdown (nearly five weeks in 2018) occurred during President Donald Trump's tenure.
The current standoff stems from Senate Democrats rejecting a Republican-sponsored short-term funding bill, demanding it include extended Affordable Care Act tax credits set to expire in 2025. Without these, health insurance premiums could rise significantly in 2026.
Republicans, holding a 53-47 Senate majority, accuse Democrats of holding the government hostage and refuse to negotiate on health care until the shutdown ends. A stopgap funding bill has failed in the Senate 11 times, and a military-only funding bill also failed last week.
Senate Majority Leader John Thune (R-S.D.) insists Democrats must agree to reopen the government before further talks, while Democratic leaders urge Trump to join negotiations. No votes were scheduled as of Wednesday morning.
Global hits:
UK gilt yields fall as investors ramp up rate cut bets after steady inflation.
UK inflation holds at 3.8% in surprise boost for Reeves and BoE.
South Africa’s inflation rises to 3.4% in September, below expectations.
It’s big: India to cut Russian oil purchases, U.S. to slash tariffs as they near trade deal.
Trump administration port fees slam shipper with $34 million tariff bill.
The entire East Wing of the White House will be knocked down for President Donald Trump’s ballroom project.
Trump says U.S. cattle ranchers ‘don’t understand’ tariffs after some slam Argentine beef plan.
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📈 Stocks
S&P 500 6,699.40 (-0.53%)
DJIA 46,590.41 (-0.71%)
NASDAQ 22,740.40 (-0.93%)
BRENT CRUDE 63.71 (+2.34%)
* Prices as of Oct 23rd, 12:20 AM UTC
Tesla Reports 12% Revenue Growth After Two Declining Quarters
Tesla announced a 12% revenue increase to $28.1 billion in Q3, reversing two consecutive quarters of declines. However, earnings fell short of analyst expectations at 50 cents per share compared to the estimated 54 cents, causing a 1.5% drop in after-hours trading.
Automotive revenue rose 6% to $21.2 billion, while net income dropped 37% to $1.37 billion due to lower EV prices and a 50% rise in operating expenses, partly from AI and R&D investments.
The expiration of U.S. EV tax credits spurred sales, but European sales slumped amid competition and backlash against CEO Elon Musk.
Energy storage revenue surged 44% to $3.42 billion. Tesla aims for volume production of Cybercab, Semi trucks, and Megapack 3 in 2026, while building production lines for Optimus robots.
Deliveries hit a record 497,099 vehicles, though year-to-date deliveries fell 6% to 1.2 million.
Other earnings:
Barclays announced a £500 million ($667 million) share buyback on Wednesday, as it reported third-quarter earnings. It also increased its guidance and said it now expects to deliver RoTE (Return on Tangible Equity) of greater than 11% for the full year. The bank said it plans to move to quarterly share buyback announcements.
Southwest Airlines posted a surprise profit for the third quarter and forecast better travel demand and higher fares for the fourth quarter. The carrier said it expects unit revenue to rise between 1% and 3% during the final three months of the year, with capacity up 6% over the same period last year.
IBM beat Wall Street’s third-quarter earnings and revenues estimates and said it now expects revenue to grow more than 5% this year. CEO Arvind Krishna said IBM’s AI book of business surpassed $9.5 million, up from $7.5 billion reported last quarter. IBM shares have jumped about 30% this year as the company capitalizes on new AI technologies.
AT&T failed to beat revenue expectations but still jumped as it added more wireless subscribers than expected in the third quarter, as bundled plans and heavy promotions around the latest iPhone launch helped it attract more customers in a fiercely competitive market. Revenue from its business wireline unit fell 7.8% in the quarter, hurt by declines in legacy voice and data services.
SAP raised its full-year profit and cash flow guidance after reporting double-digit growth in cloud and total revenue for the third quarter.
What’s new at Amazon: Amazon launched Blue Jay, a robotics system that picks, sorts, and consolidates warehouse packages in one streamlined line. It's rolling out now in a South Carolina facility, with Morgan Stanley estimating up to $4B in annual savings from replacing human workers with robots.
Reminder: Tech Meta lays off 600 employees within AI unit. Elsewhere, GM plans to launch eyes-off driving, Google AI and other new in-vehicle tech by 2028. In other news, Applied Digital signs $5 billion AI factory lease with U.S. based hyperscaler. Lastly, Walmart pauses H-1B visas for job candidates as Trump hikes fees.
Just in: Baidu’s Apollo Go plans to launch taxis with no steering wheels in Switzerland as the race for robotaxis in Europe heats up.
WBD rejected three Paramount takeover offers, the last for just under $24 per share.
💵 Personal Finance
Mortgage Rates Drop, Refinance Demand Surges 81%
Mortgage rates fell to 6.37% last week, the lowest in a month, boosting refinance applications by 4%.
Refinance demand is 81% higher than a year ago, driven by conventional and FHA loans, though VA refinances dropped 12%.
Adjustable-rate mortgage (ARM) applications rose 16%, with ARMs at 11% of total applications due to high home prices.
Home purchase applications fell 5% but were 20% higher than last year. Despite more housing supply and softening prices, some buyers await further rate declines.
Mortgage News Daily noted rates dropped further this week, with some lenders offering their lowest in over three years.
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