Must read: another market sell-off, Unilever, Meta

GLOBAL MARKETS

Negative momentum from Wall Street has carried forward to the European market open, with equities facing heavy selling pressure. Asian equities also fell sharply, with the Nikkei shedding over 2% as risk-off sentiment grips global stock markets.

In a busy week for bank earnings, Standard Chartered (LSE:STAN) has plunged to the bottom of the FTSE 100, logging its biggest one day drop so far in the session since 1988 after earnings missed expectations, with particular weakness in China. 

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All eyes are on the European Central Bank's rate decision later today when policymakers are seen keeping rates on hold. Amazon.com Inc (NASDAQ:AMZN) is the next tech giant due to report later today and US quarterly GDP figures are also due which should provide clues into the resilience of the US economy.

Morgan Stanley (NYSE:MS) said Ted Pick will become its new CEO taking over from James Gorman at the start of next year. Pick told the Financial Times his appointment was “not a change in strategy.

UNILEVER 

Unilever (LSE:ULVR) reported underlying sales growth of 5.2%, missing analysts’ expectations. While prices grew by 5.8% actual volumes of goods sold fell by 0.6%. However, price growth still slowed from 9.4% in the first half of 2023. Its personal care division outperformed with growth up 8% but ice cream lagged, falling by 2.8%. Unilever has named Fernando Fernandez as its new CFO today who will take over from Graeme Pitkethly. 

New CEO Hein Schumacher who took to the helm in July said “our performance in recent years has not matched our potential. The quality of our growth, productivity and returns have all under-delivered.” He said the company plans to focus on 30 key brands accounting for 70% of its sales and does not plan to carry out any major acquisitions. 

Unilever hopes that Schumacher’s appointment will help the company turn over a new leaf after recent criticisms of ‘profiteering’ from the inflationary environment, and the failed £50 billion bid for GSK’s consumer healthcare division under former CEO Alan Jope, prompting activist investors to fight for a C-suite shake-up. 

Shares in Unilever have fallen sharply today, echoing a similar performance from rival Reckitt which saw its shares slump yesterday. Unilever is down over 10% in the past six months, reflecting the weak consumer backdrop as shoppers trade down to unlabelled, cheaper substitute products.

META 

Meta Platforms Inc Class A (NASDAQ:META) reported third-quarter revenue which came in ahead of expectations. Sales jumped 23% to $34.15 billion, beating analysts’ forecasts to hit the highest quarterly revenue figure as a public company. Its earnings also topped consensus estimates, with net income soaring 164% versus last year and its operating margin reached a two-year high. Meta saw a 7% increase year-on-year in daily active people, which is a measure of users on any of its apps and its ad impressions increased by 31% 

However, the company behind Whatsapp, Instagram, Facebook and Threads warned about the macroeconomic environment, weaker advertising demand, extra spending and regulations headwinds. Plus, its Reality Labs division lost $3.7 billion in the quarter, and more than $21 billion since the start of last year as its aim to grow in the metaverse continues to struggle. 

This has been the year of efficiency, with Meta reducing its headcount by 24% since the start of 2023, although it’s planning to start hiring again next year. Investors have been cheering these cost cuts, piling back into the stock which has rebounded by around 140% since the beginning of January after last year’s ‘tech-wreck’ hit Meta extremely hard. 

In the after-hours session, Meta initially traded higher but later swung into the red as investors digested the mixed report.