October 24th Market Overview

Happy Thursday everyone.

Today’s price action brings some bullish relief after three straight bumpy days. The S&P 500 has found its footing with help from $TSLA's fantastic ER and retreating Treasury yields. One more day and the weekend is here :-)

Tech sector is carrying most of the weight today.

Let's dig in...

Executive Summary

• S&P 500 rebounded 0.3% as Treasury yields retreat from three-month highs

• $TSLA surged 22%, marking its strongest post-earnings performance since 2013

• Corporate earnings broadly missing expectations with 3.4% growth rate vs higher forecasts

• Economic data shows resilience with better-than-expected new home sales and jobless claims

Market Overview

Market sentiment improved today as Treasury yields pulled back from recent peaks.

UBS maintains a bullish stance, targeting S&P 500 at 6,600 by end-2025.

Approximately 160 S&P 500 companies have reported earnings.

Key Market Drivers

1. Treasury Yield Retreat: 10-year yield easing from Wednesday’s 4.25% peak, relieving pressure on equities

2. Strong Economic Data: New home sales reached 738,000 in September, exceeding forecasts

3. Labor Market Strength: Weekly jobless claims dropped to 227,000, below 245,000 estimate

4. Mixed Earnings: Current blended earnings growth rate of 3.4% trailing analyst projections

Stock Spotlight

• $TSLA: Advanced 22% after reporting Q3 earnings of $0.72 per share vs $0.58 expected; CEO Musk forecasting 20-30% vehicle growth in 2025
  

• $IBM: Declined 6.5% as consulting revenue missed estimates amid challenging business environment
  

• $UPS: Gained 7% following strong Q3 results with EPS of $1.76 vs $1.63 forecast

• $NEM: Dropped 14% after reporting Q3 earnings of $0.81 per share, missing $0.86 consensus

Big Name Updates

• $HON: Fell 5% on mixed Q3 results and weak Q4 guidance; aerospace and industrial automation segments missed targets
  

• $VZ: KeyBanc downgrade triggered selling pressure; analyst cites limited growth potential in consumer segment
  

• $RF: UBS upgrade to buy with $26 target, citing improved risk profile and attractive valuation

Other Notable Company News

• $LILM: Air taxi startup plunged 57% after announcing main subsidiaries’ insolvency filing
  

• $MOH: Healthcare provider surged 19% on stronger-than-expected quarterly performance
  

• $SRE: Jefferies initiated coverage with buy rating, highlighting underappreciated growth potential

Sector Watch

Bond Market

Treasury yields down sharply from three-month highs, with the 10-year yield pulling back from 4.25%.

This shift triggered gains in growth stocks while providing crucial support for rate-sensitive sectors. Market is now pricing in possible rate cuts for early 2025.

Policy Watch

Economic resilience continues to challenge Fed policy expectations. Strong new home sales (738,000 units) and lower jobless claims (227,000) suggest persistent economic strength.

What to Watch

1. FOMC Meeting Next Week:

• Impact of recent economic data on policy decisions

• Forward guidance on rate path through year-end

2. Earnings Calendar:

• Tech sector heavyweights reporting next week ($AAPL, $GOOGL, $MSFT, $META)

• Focus on guidance amid uncertain macro environment

3. Economic Data:

• Q3 GDP release tomorrow

• PCE inflation data on Friday

• Consumer confidence readings next week

P.S. 
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Thanks for reading 🙂

- John