October 30th Market Overview

Happy Wednesday everyone.

This gold company is currently running a promotion. They keep sponsoring a ton of newsletters.

Markets are moving sideways today as big tech names prepare to report earnings. Google's strong performance, with cloud revenue up 35%, is helping boost confidence in tech.

U.S. companies added 233,000 new jobs in October - more than double the 113,000 economists expected.


Let's dig in...

Executive Summary

• GDP growth moderated to 2.8% in Q3, missing the anticipated 3.1% expansion
  

• Super Micro Computer faces a crisis of confidence after Ernst & Young’s sudden resignation
  

• Big Tech earnings season heats up with mixed results from $GOOGL and $AMD, while $META and $MSFT report after the bell
  

• U.S. private payrolls surged by 233,000 in October, more than doubling expectations of 113,000

Market Overview

Major indices are hovering near the flatline in afternoon trading.

Trading volume remains elevated as markets process a deluge of corporate earnings and economic data.

Key Market Drivers

1. Q3 GDP growth of 2.8% suggests economic moderation but remains resilient enough to keep recession fears at bay
   

2. October private sector job creation up to its highest level in over a year
   

3. Tech earnings continue to shape market sentiment with divergent results
   

4. Growing uncertainty ahead of the November 5 presidential election is tempering risk appetite

Stock Spotlight

• $GOOGL: ▲ 4% after reporting 35% cloud revenue growth and beating analyst expectations across all business segments
  

• $AMD: ▼ 10% as disappointing Q4 guidance overshadows solid Q3 performance
  

• $SMCI: ▼ 31.4% following Ernst & Young’s resignation and concerns about board independence
  

• $GRMN: ▲ 24% toward record highs after beating Q3 estimates and raising full-year guidance
  

• $RDDT: ▲ 41% after reporting surprise profit of $0.16 per share versus expected loss

Big Name Updates

• $MSFT and $META: Set to report after market close, with AI initiatives in focus
  

• $LLY: ▼ 7.5% after missing Q3 expectations and lowering full-year outlook
  

• $CAT: ▼ 5% on weaker-than-expected Q3 earnings, with construction revenue falling 9%
  

• $BOOT: Management transition raises near-term concerns, but Baird sees 29% upside potential

Other Notable Company News

• Ernst & Young cited serious concerns about $SMCI’s “commitment to integrity and ethical values”
  

• $GRMN hits all-time high of $207.11 on strong device sales
  

• Charles Schwab expanding 24-hour trading to include S&P 500 and Nasdaq 100 stocks

Sector Watch

Bond Market

Treasury yields remain volatile after mixed economic data. The 10-year yield sits at 4.286%, while the 2-year yield has climbed to 4.176%. The yield curve continues to signal economic uncertainty as markets weigh growth prospects against inflation risks.

Policy Watch

Bank of America maintains its base case for a 25 basis point rate cut at next week’s Fed meeting, with 96.7% of traders aligned with this view.

The strong October jobs data adds complexity to the Fed’s decision, but analysts suggest the central bank lacks conviction to keep rates at 5% given broader economic trends

What to Watch

1. Big Tech Earnings Continue: Watch $META and $MSFT after the bell for AI adoption metrics and cloud growth trends

• Both stocks have significant weightings in major indices

• Results could set tone for $AAPL and $AMZN tomorrow

2. Super Micro Computer Fallout: Monitor potential ripple effects across tech sector

• Watch for potential regulatory investigation announcements

• Similar companies may face increased scrutiny

3. Pre-Election Market Sentiment: Options market pricing suggests ±2.1% S&P 500 move on election day

• Certain sectors show heightened sensitivity to potential outcomes

• Volatility expected to increase as election approaches

P.S. 
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Thanks for reading 🙂

- John