October 14th Market Overview

Happy Monday everyone.

So I changed up the look at bit - same format just tried to make it easier to read for everyone. Feel free to message me back and tell me if you liked it or not. 😎

Let's dig in...

Executive Summary

• S&P 500 hits new record as earnings season kicks off

• Technology sector leads gains, with $NVDA reaching all-time high

• Fed Governor Waller signals cautious approach to future rate cuts

• Upcoming retail sales data could bolster “no landing” economic scenario

Market Overview

All major indices are showing green across the board.

This rally comes on the heels of strong earnings reports from $JPM and $WFC, setting a positive tone for the third-quarter earnings season.

So far, 30 S&P 500 companies have reported results, beating earnings estimates by an average of 5%

Key Market Drivers

1. Earnings anticipation: Investors await reports from $BAC, $GS, $UAL, $NFLX, $WBA, and $PG

2. Economic data: Upcoming retail sales report could strengthen the “no landing” narrative

3. Inflation concerns: Deutsche Bank highlights persistent inflation risks

4. Geopolitical tensions: Ongoing Middle East conflicts and rising Treasury yields create uncertainty

Stock Spotlight

• $NVDA ▲2%+: On track for record close, market cap exceeds $3.4 trillion amid surging AI chip demand

• $WMT ▲52% YTD: Named top pick by Oppenheimer, citing strong store execution and e-commerce growth

• $CAT ▼2%: Morgan Stanley downgrade cites concerns in construction sector

• $GE ▲: Bernstein raises price target to $225, expects resilience despite production challenges

• $AMGN ▼: Truist downgrades to hold, citing modest expectations for obesity drug trial results

Big Name Updates

• $GOOG: Inks deal with Kairos Power for nuclear energy to power data centers by 2030

• $BA ▼2.3%: Announces 10% workforce reduction amid ongoing labor disputes and project delays

• $PLTR ▲: Trading at highest levels since February 2021

• $MCD and $UNH: Led Dow gains, offsetting $CAT’s decline

Other Notable Company News

• Retail sector: Barclays predicts bullish sentiment despite challenges

• $UBER: Builds positive momentum ahead of earnings report

• $TSLA: Maintains strength with significant share movement

• Market breadth: 51 S&P 500 stocks hit new 52-week highs

Sector Watch

Bond Market

The bond market was closed today for Columbus Day.

Policy Watch

Fed Governor Christopher Waller signaled a more cautious approach to future interest rate cuts, stating, “Whatever happens in the near term, my baseline still calls for reducing the policy rate gradually over the next year.”

This suggests a measured approach to monetary policy adjustments in the coming months, as the Fed continues to balance economic growth with inflation concerns.

What to Watch

• Retail Sales Report (Thursday): This data could reinforce the “no landing” economic scenario, potentially boosting consumer discretionary and retail stocks. A strong report may also influence Fed policy expectations.

• Earnings from Financial Giants: $BAC, $GS (Tuesday), and $MS (Wednesday) reports will provide insights into the health of the banking sector and broader economic conditions.

• $NFLX Earnings (Wednesday): As a key player in the streaming industry, Netflix’s results could impact the entire communication services sector.

• Middle East Developments: Ongoing geopolitical tensions may affect oil prices and market sentiment, particularly in the energy sector.

• Fed Speakers: Watch for additional comments from Fed officials that could provide clues about future monetary policy decisions.

P.S. 
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Thank you for reading - have a great weekend everyone.

- John