The daily business briefing: October 27, 2023

1. US economic growth accelerated in 3rd quarter

U.S. economic growth more than doubled in the third quarter compared to the previous three months, the Bureau of Economic Analysis reported Thursday. U.S. GDP grew at an annual pace of 4.9% in the quarter that ended in September, faster than economists had predicted after the 2.1% growth of the previous quarter. Consumer spending fueled the resilience despite the Federal Reserve's aggressive campaign to slow the economy with interest rate hikes to bring down inflation. Fed Chair Jerome Powell said last week that recent data showing the economy's strength and strong labor demand could "put further progress on inflation at risk." ABC News

2. Amazon shares jump after bullish AI comments

Amazon reported Thursday that its quarterly profit tripled to nearly $10 billion from July to September as strong cloud-computing, advertising, and retail sales helped it bounce back from post-pandemic lows. Amazon shares jumped 6% in pre-market trading on Friday after the e-commerce giant's CEO, Andy Jassy, said the company would rake in "tens of billions" of dollars as customers flock to artificial intelligence opportunities offered through its cloud-computing business, Amazon Web Services. "Our generative AI business is growing very, very quickly," Jassy said. Amazon's quarterly revenue was up 13% to $143.1 billion, exceeding analysts' expectations. The Wall Street Journal, Yahoo Finance

3. Mortgage rates edge closer to 8%

Mortgage rates rose again this week, with the most popular mortgage jumping to 7.79% from 7.63% a week earlier, Freddie Mac reported Thursday. The average rate on a 30-year fixed-rate loan has now been above 7% for 11 straight weeks. With rates approaching 8% and housing prices high as owners show reluctance to sell, homes are out of reach for an increasing number of potential buyers. In response, homebuilders are offering incentives and luring buyers to cheaper but riskier adjustable-rate loans. "Though high mortgage rates and still-high prices weigh on home shoppers, recent new home sales data shows that buyers are finding a way to navigate the challenging environment," said Hannah Jones, senior economic research analyst at Realtor.com. Yahoo Finance

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4. Ford withdraws full-year forecast, citing 'uncertainty'

Ford Motor on Thursday took back its forecast for the full year, citing "uncertainty" as it awaits ratification of its deal with the United Auto Workers union. The UAW's nearly six-week strike halted work at some of the automaker's biggest plants. The two sides reached the tentative deal on Wednesday. It includes a 25% wage increase over 4 1/2 years for 57,000 workers. Ford Chief Financial Officer John Lawler said the new contract would increase the cost of each vehicle by $850 to $900. The concessions "will weigh on margins and affect its competitiveness relative to Tesla and other non-union automakers," CFRA research analyst Garrett Nelson wrote Thursday in an investor note. Reuters 

5. Stock futures struggle to rebound from week's losses

U.S. stock futures bounced early Friday after a week of big losses. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.5% and 0.2%, respectively, at 7 a.m. ET. The tech-heavy Nasdaq's futures were up 0.9%. Tech-related shares got a boost from Amazon's strong quarterly results, which lifted the online retail giant's shares by about 6%. Wall Street took a beating on Thursday. The Dow and the S&P 500 fell 0.8% and 1.2%, respectively, while the Nasdaq dropped 1.8%. The Nasdaq is now in correction territory, down 10% from its recent high. The Dow and the S&P 500 head into Friday trading down 1% and 2%, respectively, this week. The Nasdaq has dropped 3%. CNBC, Dow Jones