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Hi John, here's what you need to know for October 30th in 3:15 minutes.

⏳ Keep it brief

• US stocks rose to another record high this week, helped by positive company earnings updates
• Oil major BP’s third-quarter profit fell by over 40% versus a year ago, thanks to lower oil prices

Up, Up, And Away

What’s Going On Here?

The S&P 500 – a major US stock market index – has risen about 20% this year. And this week, it hit a fresh record high, suggesting investors are feeling pretty uplifted too (tweet this).

What Does This Mean?

Some of the reasons investors have been steering clear of risky stocks and cozying up to safer government bonds are starting to disappear – or at least not get any worse. Take the US-China trade war, which has increased costs and decreased demand at American and Chinese firms: it might be put on hold if the two countries can finalize their initial agreement next month. And in Europe, a further delay to Brexit – while prolonging uncertainty – decreases the likelihood of an unexpected and economically disruptive no-deal. Throw in the 80% of US companies that have exceeded investors’ third-quarter earnings expectations, and perhaps it’s no surprise stocks are suddenly back in investors’ good books.

Why Should I Care?

For markets: Dessert before dinner.
As many as 90% of investors expect the US Federal Reserve (the Fed) to lower the country’s key interest rate at its meeting on Wednesday. Cheaper access to money today should add up to more profit tomorrow, making stocks more attractive and bonds (and indeed saving) less so. Stock prices, then, tend to rise whenever the Fed announces lower rates. But now that they’ve hit record highs partly in anticipation of that announcement, another boost to prices probably won’t be as forthcoming.

Zooming in: Cyclical and defensive stocks are pushing markets up.
Stronger-than-expected quarterly updates from healthcare companies Pfizer and Merck pushed their stocks higher on Tuesday. That’ll benefit those investors who’ve backed “defensive” industries – those that sell products people need no matter the state of the economy. Likewise, carmaker General Motors’ stock rose after its update showed better-than-expected growth in the US and bigger plans to cut costs. That bodes well for shares of other “cyclical” companies, whose fortunes tend to rise and fall with economic growth.

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Scraping The Barrel

What’s Going On Here?

Shares of BP, the world’s fourth-largest oil company, slipped 4% on Tuesday after it reported a slide in its quarterly profit.

What Does This Mean?

BP’s third-quarter profit was 41% lower than the same time last year – but even that was better than investors expected. Oil prices are lower now than they were a year ago, which meant BP made less from its black gold. That was only partly made up for by earnings from the company’s refining business, which turns crude oil into products that businesses and individuals can actually use.

With global economic growth slowing – and demand for oil dropping as a result – there’s oil slick ahead for BP and its competitors, which could find it harder to grow future profits.

Why Should I Care?

For markets: Refining those refinery estimates.
About a third of BP’s profit comes from refining, compared to between a quarter and a third for a few of its rivals. Investors might look at the size and performance of those refinery businesses to see if they’ll be able to weather falling oil prices and declining demand too. But given all this competition, profit margins in the refinery business might yet come under pressure – so it might not stop some oil firms falling short of expectations. Just look at Shell, Total, and Chevron’s shares, all of which fell on Tuesday.

The bigger picture: Welcome to the party, Aramco.
According to reports on Tuesday, Saudi Aramco – the state-owned oil firm and the world’s most profitable company – will kick off the initial public offering process next week. It’s aiming to raise $20 billion in one of the largest stock market listings ever. First up, investors will meet with company analysts (and the company itself) to determine how much they think a share of Saudi Aramco is worth. And if the company’s happy to sell shares at that price, it’ll have listed by December and you’ll be able to buy (and sell) its shares.

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