October 29th Market Overview

Happy Tuesday everyone.

Earnings time is always a little nerve-racking 😬 

Earnings season hits full flex today, with major tech reports kicking off after the closing bell starting with $GOOGL. The Nasdaq is making fresh records above 18,700 as traders position ahead of earnings.

Consumer confidence data came in an unexpected bright spot with its strongest monthly gain since March 2021.

Let's dig in...

Executive Summary

• Nasdaq poised for record close amid tech strength, while broader markets remain mixed

• Job openings drop more than expected to 7.44M, signaling potential labor market cooling

• Gold hits fresh record at $2,784/oz on election uncertainty and China stimulus hopes

• Consumer confidence surges to 108.7, marking strongest monthly gain in over two years

Market Overview

The Nasdaq composite is closing at a new all time high.

Market breadth remains weak with 68% of NYSE stocks declining, despite index gains.

Key Market Drivers

1. Labor Market Cooling: September job openings fell to 7.44M from 7.86M, below consensus of 8M

2. Consumer Sentiment Surge: October confidence index jumped to 108.7 from 99.2, vastly exceeding estimates

3. China Stimulus Plans: Consideration of 10T yuan fiscal package boosting global sentiment

4. Earnings Season Peak: Over 150 S&P 500 companies reporting this week

Stock Spotlight

• $VF ▲ 23%: North Face parent posts strongest day on record after beating Q2 expectations with EPS of $0.60 vs $0.37 expected
  

• $CROX ▼ 18%: Despite Q3 earnings beat, guides Q4 EPS significantly lower at $2.20-$2.28 vs $2.73 expected
  

• $SOFI ▲: Reports “strongest quarter in history” with EPS of $0.05 vs $0.04 expected
  

• $DHI ▼: Misses expectations with $3.92 EPS vs $4.17 estimate, cuts FY25 guidance amid mortgage rate concerns
  

• $PYPL: Mixed results with strong US revenue but international challenges; bottom line beats with $1.20 vs $1.07 expected

Big Name Updates

• $GOOGL ▲ 2%: Trading higher ahead of earnings as traders anticipate strong growth despite regulatory issues
  

• $AAPL: Reports $6B iPhone exports from India between April-September, up 33% YoY as China dependency reduces
  

• $META: Developing proprietary AI search tool to decrease reliance on $GOOGL and $MSFT
  

• $MCD ▼: Reports weak international comparable sales, particularly in France and UK markets

Other Notable Company News

• $BA: Completes $21B share sale at $143/share, securing additional $10B credit line
  

• $HSBC: Reports $8.4B profit, announces $3B buyback program
  

• $LDOS: Crushes earnings with $2.93 EPS vs $2.01 expected, raises full-year guidance
  

• $CDNS: Reports strong AI-driven growth with margins significantly above expectations

Sector Watch

Bond Market

Ten-year Treasury yield reaches highest level since July at 4.324%, pressuring equity valuations.

Treasury revises Q4 borrowing estimate down to $546B from $565B, projecting $823B for Q1 2025.

Policy Watch

• Biden administration finalizes restrictions on Chinese semiconductor and AI investments
  

• Treasury projecting $700B cash balance at year-end
  

• China considers expanding fiscal stimulus package if Trump wins election

What to Watch

1. Big Tech Earnings Parade:

   • $GOOGL reports after close today

   • $META and $MSFT report Wednesday

   • $AAPL reports Thursday

   • Focus on AI investments and margin expansion

2. Economic Data Pipeline:

   • ADP employment report Wednesday

   • Weekly jobless claims Thursday

   • October payrolls report Friday

   • Key for Fed policy trajectory

3. Pre-Election Market Dynamics:

   • Five trading days until presidential election

   • Historically elevated volatility period

   • Potential sector rotation based on polling data

P.S. 
Thanks for reading 🙂

- John