MORNING NEWS CALL

TOP NEWS
• Procter & Gamble's first-quarter sales beat estimates
Procter & Gamble Co reported better-than-expected first-quarter sales, boosted by strong demand for beauty and home care prod-
ucts.
• Honeywell profit beats on strong aero, warehouse automation sales
Honeywell International reported better-than-expected quarterly profit and lifted its full-year forecasts for cash flow and margins, driv-
en by strong sales of aircraft parts and warehouse automation products.
• Schlumberger profit rises 18.2 percent on higher oilfield services demand
Schlumberger NV posted an 18.2 rise in quarterly profit , as a recovery in crude oil prices boosted demand for its services in North
America and international markets.
• Ford CEO seeks to rally dealers as shares sink to new low
With Ford Motor's stock at nearly a nine-year low and the company squeezed by tariffs and trade tensions, Chief Executive Jim Hack-
ett sought to restore confidence among dealers gathered in Las Vegas this week, days ahead of third-quarter results.
• OPEC, allies struggle to fully deliver pledged oil output boost -internal document
OPEC is struggling to add barrels to the market after agreeing in June to increase output, an internal document seen by Reuters
showed, as an increase in Saudi Arabia was offset by declines in Iran, Venezuela and Angola.

BEFORE THE BELL

U.S. stock futures edged higher, a day after Wall Street’s major indexes fell more than 1 percent, as investors shrugged off con-
cerns over the European Union’s warning on Italy budget. European equities slipped and the euro fell after the European Union
criticized Italy's spending plans, raising fresh concern over conflict within the common currency zone. Data showing China's economy
growing at its slowest pace since 2009 weighed on shares in Asia, although Chinese shares staged a recovery after the securities
regulator announced a series of measures to aid the market. Signs of surging demand in China pushed oil prices higher. Gold prices
rose, setting the metal on course for a third week of gains. Data on existing home sales is scheduled for release later in the day.

STOCKS TO WATCH
Results
• American Express Co (AXP). The company topped Wall Street estimates for third-quarter profit on Thursday and lifted its yearly
earnings forecast, as a strengthening U.S. economy powered higher credit card spending. American Express now expects 2018 ad-
justed earnings of between $7.30 and $7.40 per share, up from the previous $6.90 to $7.30 range. The credit-card issuer said quar-
terly card customer spending rose 10.3 percent in the United States and 5 percent in overseas markets during the three months end-
ed September 30.
• Honeywell International Inc (HON). Honeywell International Inc (HON). The company reported better-than-expected quarterly
profit and lifted its full-year forecasts for cash flow and margins, driven by strong sales of aircraft parts and warehouse automation
products. Sales in the aerospace division, which makes auxiliary power units, braking systems and other parts for Boeing and Airbus
single-aisle planes, rose about 10 percent to $4.03 billion, while margins expanded by 80 basis points to 22.1 percent. Net income
attributable to Honeywell increased to $2.34 billion, or $3.11 per share, in the third quarter ended from $1.35 billion, or $1.74 per
share, a year earlier. Excluding items, Honeywell earned $2.03 per share, beating analysts' average estimate of $1.99 per share,
according to Refinitiv data.The company's revenue rose 6.3 percent to $10.76 billion, topping the consensus of $10.75 billion.
• Interpublic Group of Companies Inc (IPG). The U.S advertising firm reported a 4 percent rise in quarterly revenue, helped by
higher client spending worldwide. Net income available to the company's common stockholders fell to $161 million, or 41 cents per
share, in the third quarter ended Sept. 30, from $169.7 million, or 43 cents per share, a year earlier. Total revenue rose to $2.30 bil-
lion from $2.21 billion.
MORNING NEWS CALL

• PayPal Holdings Inc (PYPL). The company on Thursday reported a third-quarter profit that beat analysts' estimates as the compa-
ny signed up more new customers and volume of payments processed rose. Net income rose to $436 million, or 36 cents per share,
in the third quarter, from $380 million, or 31 cents per share, a year earlier. For the fourth quarter, PayPal expects revenue between
$4.20 billion and $4.28 billion, in line with analysts' estimates of $4.21 billion estimate.
• Procter & Gamble Co (PG). The company reported better-than-expected first-quarter sales, boosted by strong demand for beauty
and home care products. The world's largest consumer goods maker said net income attributable to the company rose to $3.20 bil-
lion, or $1.22 per share, in the first quarter ended, from $2.85 billion, or $1.06 per share, a year earlier. Net sales rose marginally to
$16.69 billion beating analysts' average estimate of $16.46 billion.
• Schlumberger NV (SLB). The world's largest oilfield services company posted an 18.2 rise in quarterly profit, as a recovery in crude
oil prices boosted demand for its services in North America and international markets. The company said net income rose to $644
million, or 46 cents per share, in the third-quarter ended Sept 30, from $545 million, or 39 cents per share, a year earlier. The compa-
ny's revenue rose to $8.5 billion from $7.91 billion.
• VF Corp (VFC). The apparel maker topped analysts' estimates for revenue, boosted by thriving demand for its high-margin Vans
shoes and North Face apparel. The company's income from continuing operations rose to $507.1 million, or $1.26 per share, in the
second quarter ended, from $473.8 million, or $1.19 per share, a year earlier. Net revenue rose 15 percent to $3.91 billion, beating
analysts' average estimate of $3.87 billion, according to Refinitiv estimates.

In Other News
• Amazon.com Inc (AMZN). The company is opening its first office in Manchester, northern England, and expanding two other cen-
tres to house 1,000 new R&D roles in what it said was a major new investment in British innovation. Amazon's UK country manager
Doug Gurr said Britain was taking a leading role in the company's global innovation.
• American International Group Inc (AIG). The insurer said on Thursday it expects third-quarter pre-tax catastrophe losses, net of
reinsurance, of between $1.5 billion and $1.7 billion. The insurer said initial pre-tax loss estimates for Hurricane Michael were about
$300 million to $500 million, which will be recorded in the fourth quarter. Hurricane Michael caused destruction in Florida and six oth-
er U.S. states this month.
• DowDuPont Inc (DWDP). The company said on Thursday it would write down the value of its agriculture business by $4.6 billion
when it reports third-quarter results, as global seed makers face shifts in demand linked to the U.S.-China trade war. The company, in
a regulatory filing, also said its agriculture unit would see reduced cash flow, hit by weak sales and margin growth in North America
and Latin American markets.
• Ford Motor Co (F). With stock at nearly a nine-year low and the company squeezed by tariffs and trade tensions, Chief Executive
Jim Hackett sought to restore confidence among dealers gathered in Las Vegas this week, days ahead of third-quarter results. In
closed-door meetings with members of Ford's national dealer network, Hackett and other top Ford executives showed off future ver-
sions of the popular Explorer and Escape SUVs as well as new the Ranger mid-sized pickup truck and an unnamed smaller off-road
utility vehicle, attendees said. Ford has said it will refresh 75 percent of its North American lineup over the next two years. Investors
on Thursday sold Ford shares down another 2.9 percent to $8.51, a new 52-week low. Ford is expected to report a decline in third
quarter profits on October 24.
• Twenty-First Century Fox Inc (FOXA). Fox Business Network said on Thursday it is withdrawing as a sponsor of the Future In-
vestment Initiative Summit to be held in Saudi Arabia next week, joining a host of media companies to drop out after the disappear-
ance of a Saudi journalist. "FOX Business Network has canceled its sponsorship and participation in the Future Investment Initiative
conference in Saudi Arabia. We continue to seek an interview with Crown Prince Mohammad bin Salman," the network said in a
statement.
• Micron Technology Inc (MU). The company said on Thursday it planned to take full control of IM Flash Technologies joint venture
with Intel. The deal terms include payment of about $1.5 billion in cash, as well as taking over Intel's debt to the venture, which was
about $1 billion as of Aug. 30, Micron said. The company can exercise a call option starting Jan. 1, 2019 and the transaction is ex-
pected to close between six and 12 months after Micron exercises the option. IM Flash will become a wholly-owned subsidiary of
Micron after the deal closes.
• Morgan Stanley (MS). The largest U.S. brokerage told its top brokers on Thursday that if they commit to handing off their clients to
another broker at the firm when they retire, they can score bigger retirement bonuses. Starting in 2019, the firm is offering to contrib-
ute 10 to 50 percent of the revenue top brokers produce in their final year to their post-retirement bonus, according to a memo Vince
Lumia, Morgan Stanley wealth's head of field management, sent to staff.
• Pfizer Inc (PFE). Australia's competition watchdog said the High Court dismissed its special leave application to appeal a court's

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MORNING NEWS CALL

decision on whether Pfizer’s local unit used its market power to limit competition for its cholesterol-lowering drug Lipitor. The court
had found that Pfizer took advantage of its substantial market power, but did not accept the ACCC's argument that Pfizer had acted
to lessen or deter competition. Pfizer Australia said, in an emailed statement to Reuters, it welcomed the High Court's decision to
dismiss ACCC's case.
• Tesla Inc (TSLA). The company on Thursday introduced a new $45,000 version of its Model 3 sedan on its website, launching the
car as U.S. tax breaks for Tesla cars are about to decrease. According to the website, the rear-wheel-drive model has a "mid range"
battery, a range of 260 miles, 50 miles less than the long-range battery that the more expensive Model 3 is equipped with. The new
version has a delivery period of six to 10 weeks, according to the website, which would customers eligible for the current $7,500 U.S.
tax credit if they take delivery by the end of the year. The tax credit for Tesla cars will drop by half on January 1.

POLL
U.S. economic policy toward China to get tougher, say economists
U.S. trade policy towards China over the next few years will become more confrontational, according to a majority of economists in a
Reuters poll who remain convinced U.S. growth has peaked and will slow substantially next year.

ANALYSTS' RECOMMENDATION
• American Express Co (AXP): Barclays raises target price to $115 from $113 after the company raised its full year earnings fore-
cast following third-quarter results beat.
• Danaher Corp (DHR): RBC raises target price to $108 from $107 after the company's quarterly profit beats expectations led by
strength in life sciences and water quality units.
• East West Bancorp Inc (EWBC). Wedbush cuts target price to $68 from $74 following the company’s third-quarter results that
showed an unexpected decline in net interest margin.
• Textron Inc (TXT). JP Morgan cuts target price to $72 from $77 on disappointing results from the company’s specialized vehicles
unit after the company’s quarterly earnings were in line with estimates.

ECONOMIC EVENTS (All timings in U.S. Eastern Time)

1000 Existing home sales for Sep: Expected 5.30 mln; Prior 5.34 mln
1000 Existing home sales for Sep: Expected -0.7 pct; Prior 0.0 pct
1030 ECRI Weekly Index: Prior 148.6
1030 ECRI weekly annualized: Prior 0.6 pct

COMPANIES REPORTING RESULTS

Kansas City Southern (KSU). Expected Q3 earnings of $1.57 per share

CORPORATE EVENTS (All timings in U.S. Eastern Time)

0800 SunTrust Banks Inc (STI). Q3 earnings conference call
0830 Honeywell International Inc (HON). Q3 earnings conference call
0830 Interpublic Group of Companies Inc (IPG). Q3 earnings conference call
0830 ManpowerGroup Inc (MAN). Q3 earnings conference call
0830 Procter & Gamble Co (PG). Q1 earnings conference call
0830 Schlumberger NV (SLB). Q3 earnings conference call
0830 Synchrony Financial (SYF). Q3 earnings conference call
0830 VF Corp (VFC). Q2 earnings conference call
0845 Kansas City Southern (KSU). Q3 earnings conference call
0900 Citizens Financial Group Inc (CFG). Q3 earnings conference call
0900 Euronet Worldwide Inc (EEFT). Q3 earnings conference call

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MORNING NEWS CALL

0930 Gentex Corp (GNTX). Q3 earnings conference call

0930 State Street Corp (STT). Q3 earnings conference call
1000 Celanese Corp (CE). Q3 earnings conference call
1100 Bank Ozk (OZK). Q3 earnings conference call
1200 Western Alliance Bancorp (WAL). Q3 earnings conference call

EXDIVIDENDS
Apache Corp (APA). Amount $0.25
Caterpillar Inc (CAT). Amount $0.86
Graco Inc (GGG). Amount $0.13
Hormel Foods Corp (HRL). Amount $0.19

(All analysts' estimates are according to Thomson Reuters I/B/E/S)

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MORNING NEWS CALL

PICTURE OF THE DAY

U.S. Ambassador to the United Nations Nikki Haley speaks at the 73rd Annual Alfred E. Smith Memorial Foundation
Dinner in New York City, New York, October 18. REUTERS/Mike Segar

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