At 828 words, today's newsletter will take you 3 minutes to read...
Illustration: Sarah Grillo/Axios
With Q3 earnings season nearly over, investors are cheering corporate earnings: even applauding companies that fall short of expectations or signal next quarter won't be as rosy as previously thought.
Why it matters: Investors' renewed optimism that's pushed stock prices to all-time highs is giving businesses more leeway than in the past.
By the numbers: S&P 500 companies reporting fatter profits than what analysts expected have seen average share prices pop 2.3% days before and after their report — above the five-year average of 1%, according to FactSet.
The bottom line: Investors' glee for just-OK earnings is a shift from the year-ago period. On-edge investors then weren't rewarding the slew of companies that exceeded analysts' profit expectations.
S&P 500 profit estimates have dropped heading into next year. The downgrades, per UBS, are no worse than normal.
What's going on: Analysts scaled back future earnings estimates for 288 of the 461 S&P 500 companies that have reported Q3 results so far.
What they're saying: "The companies report and they lower their guidance. And then the analysts take their estimates a little bit lower from there," Nick Raich, CEO of earnings research firm The Earnings Scout, tells Axios.
In a tweet last night, President Trump offered more pointed details about his meeting with Fed chair Jerome Powell and Treasury Secretary Steven Mnuchin on Monday at the White House.
Why it matters: Trump says the two men — who met for just the second time since Powell took the helm of the Fed — talked about a range of topics, including interest rates and monetary easing.
The bottom line: The economy was growing at a healthy clip when Trump initiated his attacks on the Fed. So while recession fears have retreated (for now) and the stock market has bounced back, it shouldn't be expected that Trump's public pressure on Powell will let up.
American Express is doling out as much as $450,000 to businesses in an effort to lure them to begin taking its cards, the Wall Street Journal reports.
Between the lines: "AmEx has long lagged behind Visa and Mastercard in the race for American businesses," as it opted for well-heeled customers rather than mass-market appeal, the story notes.
What's believed to be the first congressional hearing in recent years squarely focused on the practices of private equity firms is happening later this morning.
Why it matters: Private equity is facing "the most serious political challenge it has seen in years," per the WSJ.
What they're saying: Drew Maloney, the head of the American Investment Council, private equity’s largest lobbying group, will tell members of the House Financial Committee the industry "creates jobs, powers the economy and strengthens the retirements of millions of Americans."
Bankrupt utility PG&E is reportedly near a $1.7 billion settlement with California regulators for its responsibility in sparking wildfires in 2017. (Bloomberg)
President Trump missed the deadline to put national security tariffs on cars and auto parts imported from the EU, Japan or South Korea. (Reuters)
California is suing Juul Labs for marketing vape products to teens and failing to warn consumers about the potential health risks associated with using its products. (Axios)
See you back here tomorrow.