The Reddit logo on the site.
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This report comes from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open tells investors everything they need to know, no matter where they are. Do you like what you see? You can register here.
What you need to know today
Growing cloud revenue for Alphabet
Google-parent The alphabet Third quarter earnings beat expectations. The company’s quarterly revenue was $88.27 billion, up 15% year-over-year, boosted by a 35% increase in cloud revenue from a year ago. Google’s search and advertising revenue also increased. Net income was $26.3 billion, up 33.5% from the prior quarter.
Reddit is turning to profit
Reddit Shares rose nearly 25% in extended trading on Tuesday, breaking the $100 barrier for the first time, on the company’s better-than-expected third-quarter results. Notably, Reddit turned profitable in the third quarter with net income of $29.9 million, compared to a net loss of $7.4 million in the same quarter a year ago.
Mixed purchases
On Tuesday, the Nasdaq Composite rose 0.78% to close at a new high and the S&P 500 added 0.16%, but the Dow Jones Industrial Average lost 0.36%. The pan-European Stoxx 600 the index lost 0.57%. Earnings results from European companies were mixed, making trading in the region choppy.
End of the era of zero interest rates
Larry Fink, its CEO BlackRockbelieves the Federal Reserve will cut interest rates just once, by 25 basis points, for the rest of this year because of high “embedded inflation,” Fink said on a panel Tuesday. At the same event, Morgan Stanley CEO Ted Peek said the era of zero interest rates and zero inflation is over.
[PRO] Citi likes these small-cap stocks
THE Russell 2000 it has gained about 10.4% so far this year. While that follows the S&P 500’s 22% rise over the same period, both analysts and investors are paying more attention to small-cap stocks. As the Fed cuts interest rates, small-cap stocks tend to benefit the most — and those are the small-cap stocks that Citi thinks are good buys.
The essence
A day in the life of an average office worker:
- Move to work. Send a snapshot of the crowded train to a friend
- Browse Reddit. Laugh with cats on r/pics
- Google why orange cats are so bad
- Check out a collection of YouTube videos of cats knocking over jars
- Get to work. Continue your social media browsing in secret
These behaviors are so ingrained in most of us that they are almost automatic and essential.
It’s not too surprising, then, that the companies behind these services – Break, Reddit and Alphabet – reported third-quarter results that beat Wall Street expectations.
Their revenues, in particular, are bright spots. For the third quarter, Alphabet’s ad revenue rose 10.4% year over year. While Snap and Reddit didn’t specifically mention their advertising line, there were signs that both companies are doing well in this area.
Snap’s total active advertisers have more than doubled from the year-ago quarter, according to CEO Evan Spiegel. This is combined with two million more daily active users worldwide than expected. More advertisers and more eyes mean more revenue per ad.
Meanwhile, Reddit swung from a loss a year ago to a profit. This remarkable transformation was helped in part by a 47% year-over-year increase in daily active users and better-than-expected average revenue per user.
All companies reported earnings after the bell. In extended trading, shares of Reddit soared nearly 25%, Snap jumped about 10.6% and Alphabet rose 5.8%.
Of of Meta and of Microsoft come back to the earnings report later today. Microsoft isn’t really involved in the ad market because it’s more focused on enterprise products. But investors will be watching to see if Meta keeps up with the positive trend so far.
Judging by how much time I spend on Meta-owned Instagram and seeing ads that seem to know exactly what I want, the company’s ad revenue is likely to see healthy growth as well.
— CNBC’s Julia Boorstin, Jonathan Vanian and Jennifer Elias contributed to this report.
Note: The CNBC Daily Open will be on hiatus on Thursday, October 31, for the Singapore public holiday. Regular programming will resume on Friday.