Home Depot flags deeper profit hit as weak housing and tariffs stall expected demand boost

South Africa

South African equities weakened on Tuesday, with the Top 40 down 1.71% to 102,999.2 and the All Share 1.71% lower at 110,391.9, mirroring cautious global sentiment. The PIC, which manages R3 trillion in government pension assets, is in advanced discussions with major sovereign wealth funds to co-invest across Africa. ARM confirmed it is assessing a $4–5 billion copper venture in Papua New Guinea with Newmont, while Telkom is negotiating LEO-satellite partnerships to deepen rural coverage. Markets now turn to CPI, retail sales and the SARB’s anticipated 25 bps cut for direction.

Europe

European equities fell sharply, with the STOXX 600 down 1.8% to 561.62, its weakest session since August, as concerns over stretched tech valuations and delayed U.S. rate-cut expectations triggered broad risk aversion. Germany’s DAX fell 1.8% and France’s CAC 40 dropped 1.9%, while industrial tech names underperformed: Siemens Energy –6.4%, ABB –4.1%, and Schneider Electric –2.4%. Spain approved an 8.5% higher 2026 spending ceiling, targeting narrower deficits. The ECB warned banks to brace for more frequent systemic shocks, emphasising stronger capital buffers, modernised technology, and more intrusive supervision over the next three years.

United States

U.S. markets extended losses, with the S&P 500 recording a fourth consecutive decline amid renewed valuation concerns in mega-cap tech, particularly ahead of Nvidia’s earnings. Jobless-benefit data showed a sharp rise in layoff notices into mid-October, reinforcing expectations of labour-market cooling. Home Depot fell 6% after lowering full-year guidance and missing quarterly earnings. Despite the pullback, S&P 500 earnings growth for the season stands at 16.9%, well above early-October forecasts. Investors now await the delayed September jobs report and upcoming PPI, import and export price data for policy cues.

Asia

Asia-Pacific markets traded mixed, tracking Wall Street’s tech-led decline as scrutiny of AI-related valuations weighed on risk appetite. Regional data was mixed: Hong Kong’s unemployment rate eased to 3.8%, while China’s youth jobless rate (ex-students) dipped slightly to 17.3%. Cross-border flows improved, with foreign investors purchasing $368 million in Asian bonds after heavy September outflows. Smartphone maker Xiaomi warned of further device price hikes next year due to rising memory-chip costs. Overall sentiment remains cautious amid global volatility and regulatory uncertainty surrounding China’s trade and technology environment.

Commodities

Gold edged lower as a firmer U.S. dollar and upcoming labour-market data kept investor positioning defensive. Oil markets were mixed: API data showed U.S. crude inventories up 4.45 million barrels, with gasoline and distillate stocks also rising—signalling softer demand. However, geopolitical risks—including Ukrainian strikes on Russian energy infrastructure and potential additional U.S. sanctions—added support. Diesel crack spreads in Europe climbed to their highest since September 2023, reflecting tight middle-distillate markets. Investors await official EIA inventory data for confirmation amid ongoing oversupply concerns.

 Currencies

The rand traded broadly steady ahead of key domestic releases, including CPI, retail sales and the SARB’s policy decision. Globally, the dollar held firm after touching a nine-month high against the yen, supported by safe-haven flows and concerns over Japan’s fiscal outlook. U.S. data showed rising layoff notices and slowing job creation, adding nuance to the Fed’s rate-path assessment. The yen later regained footing as global equities sold off. FX markets remain sensitive to shifting interest-rate expectations and declining risk appetite.

Reinet Investments S.C.A. (RNI) +1.89%

Reinet reported a net asset value (NAV) of EUR 6.7 billion for the six months to 30 September 2025, marking a long-term compound growth rate of 8.6% per year since March 2009. NAV declined 3.7% from March 2025, with NAV per share easing to EUR 36.62. The group committed EUR 298 million to new and existing investments, though only EUR 7 million was deployed. Dividends of EUR 303 million were received from Pension Insurance Corporation (PIC), and Reinet agreed to sell its full PIC stake to Athora, pending 2026 completion. A EUR 0.37 per-share dividend was paid.

Telkom SA SOC Limited (TKG) +1.71%

Telkom delivered solid interim results for the six months to 30 September 2025, with group revenue up 3.4% to R22.1 billion, supported by strong mobile data growth (+10.3%) and a 12.3% rise in fibre-related data revenue. Data now contributes 59.1% of total revenue. EBITDA increased 7.4% to R6.0 billion, expanding the margin to 27.2% as cost-efficiency initiatives took effect. Net debt to EBITDA remained low at 0.7x, underpinning balance-sheet resilience. Free cash flow was stable at R724 million, while HEPS rose 16.4% to 305.6c, and BEPS increased 12.7% to 325.7c, reflecting improved profitability and disciplined execution.

Coronation Fund Managers Limited (CML) -2.51%

Coronation reported a resilient performance for the year ended 30 September 2025, with revenue rising 10% to R4.29 billion. Fund management earnings per share, excluding the SARS matter, increased 12% to 452.2c, reflecting solid underlying operations. Headline earnings per share fell 25% to 474.3c due to the prior year’s once-off tax provision reversal, while gross dividends per share declined 20% to 454.0c. Management noted that fund management earnings—its preferred operating metric—fell 26% to 454.0c. The board declared a final gross dividend of 254c per share, reinforcing continued capital returns despite normalised earnings.

Pick n Pay Stores Limited (PIK) -6.06%

Pick n Pay announced the successful completion of an accelerated bookbuild involving 64.0 million shares sold by Ackerman Investment Holdings, representing 8.5% of the company’s issued ordinary share capital. Priced at R25.50 per share—a 6.4% discount to the prior close—the placement raised approximately R1.6 billion. Following the transaction, the Ackerman Family retains 135.4 million shares, though its voting interest will fall from 49.0% to 36.8% as attached ‘B’ shares lose voting rights and are cancelled. Despite the reduced economic and voting stakes, the family reaffirmed its long-term commitment to the business, with a 90-day lock-up agreed. Settlement is expected on 21 November 2025.

 Old Mutual Limited (OMU) -2.16%

Old Mutual delivered a steady operating performance for the nine months to 30 September 2025, supported by improved strategic focus on execution, efficiency and capital allocation. Life APE sales rose 1% to R10.2 billion, driven by strong risk product demand in Mass and Foundation. Gross flows were broadly flat, with robust inflows across Africa Regions offset by weaker performance in Old Mutual Investments. Net client cash flow deteriorated to –R6.7 billion due to large expected indexation outflows. Gross written premiums increased 5%, underpinned by strength in Old Mutual Insure. Loans and advances declined marginally amid tighter credit and portfolio clean-ups.

Home Depot Inc. (HD) -6.02%

Home Depot warned of a deeper full-year profit decline after missing quarterly earnings expectations, as tariff-related uncertainty and persistent housing market weakness continued to suppress demand for large renovations and DIY projects. Management noted that the anticipated boost from lower U.S. interest and mortgage rates has not materialised, reinforcing concerns over softer consumer spending. Q3 comparable sales were flat, with transactions down 1.6%, though revenue of $41.35 billion slightly exceeded forecasts. Adjusted EPS of $3.74 missed estimates for a third consecutive quarter. The group now expects full-year adjusted EPS to fall 5%, with only marginally positive same-store sales growth.

PDD Holdings Inc. - ADR (PDD) -7.33%

PDD delivered a stronger-than-expected third quarter, with adjusted EPS up 14% to 21.08 yuan, well above forecasts, as aggressive discounting and elevated marketing spend continued to lift domestic demand. Revenue grew 9% to 108.28 billion yuan, reflecting firm demand for general merchandise despite intensifying competition from Alibaba and JD.com. Adjusted net income rose to 31.38 billion yuan, though U.S.-listed shares fell amid concerns over pricing pressure, rising regulatory risks and the impact of new U.S. and upcoming EU duties on low-cost imports. Management cautioned that results may fluctuate as the group invests further in merchant support and platform upgrades.

Medtronic PLC (MDT) +4.69%

Medtronic beat Q2 expectations and lifted its full-year organic revenue growth forecast to ~5.5%, supported by strong demand for cardiovascular products. Revenue rose to $8.96 billion, with the cardiovascular division up 10.8% to $3.44 billion, driven by rapid adoption of its pulsed field ablation portfolio, which analysts say is taking share from Boston Scientific. Adjusted EPS of $1.36 exceeded forecasts, helping shares gain nearly 5%. Management highlighted continued tuck-in M&A ambitions in cardiology and neuroscience and confirmed the diabetes division’s planned 2026 spin-off. Fiscal 2026 profit guidance was raised at the lower end despite expected tariff impacts.

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