Stock market news: Opening bell, October 26, 2018

Construction
crew members use basket cranes to work on an elevated area inside
the terminal building at Beijing Daxing International Airport in
Beijing.
AP/Mark
Schiefelbein

Here is what you need to know.

Stocks are set for a big drop at the open. The
Nasdaq is set for a 2.5% drop at the open after Amazon, Google,
and Snap all delivered disappointing results. Meanwhile, the Dow
Jones Industrial Average and the S&P 500 are on track to open
down 1.3% and 1.9% respectively. Overseas, Hong Kong’s Hang Seng
(-1.1%) led the losses in Asia and Germany’s DAX (-1.9%) paces
the decline in Europe.

Amazon’s revenue and guidance come up
short. The e-commerce behemoth tumbled more
than 8% in after-hours trading Thursday after reporting both
third-quarter revenue ($56.6 billion) and fourth-quarter revenue
guidance ($66.5 billion to $72.5 billion) that fell short of Wall
Street estimates. 

Alphabet’s revenue misses. Google’s parent
company said revenue surged 22% in the third quarter to $27.2
billion, but shares fell 5% late Thursday as the number was shy
of the $27.33 billion that analysts surveyed by Bloomberg were
expecting.

Snap
lost 2 million users in the third quarter. The
social-media company plunged 10% in after-hours trading Thursday
after delivering better than expected top and bottom line results
that were accompanied by a drop of 2 million daily active
users. 

Goldman Sachs says the stock market will become a drag on the US
economy in 2019 and there’s one way traders can safeguard their
portfolios. “Looking ahead, our baseline
expectation is a decline in the equity impulse to real GDP growth
to about -0.25pp in the first half of next year,” Jan Hatzius,
the chief economist at Goldman, said in a recent note to clients.

Trump’s trade war with China is starting to get nasty for US
companies. Surveys from the Federal Reserve and
market-research firms released Wednesday showed US businesses are
growing increasingly concerned about goods coming into the US
from other countries being more expensive and that retaliatory
tariffs are making it harder to sell to places like Canada and
China. 

The Chinese yuan hits its weakest level in over a
decade. The yuan fell to 6.9642 per dollar on
Friday, its weakest since May 2008. 

The Bank of Japan continues its “stealth
tapering.” The Bank of Japan keeps saying that
it will purchase around 80 trillion yen of Japanese government
bonds to keep the 10-year JGB yield anchored to 0% — the only
problem is it isn’t.

Earnings
reporting slows. Colgate-Palmolive and Phillips
66 report ahead of the opening bell.

US economic data remains heavy. The advanced reading
of third-quarter GDP and PCE core prices will both be released at
8:30 a.m. ET before University of Michigan consumer confidence
crosses the wires at 10 a.m. ET. The US 10-year yield is down 4
basis points at 3.08%, its lowest since October 2.