October 31st Market Overview

Happy Halloween everyone.

We are closing out this month with a spooky red day. Volatility is expected as election day is right around the corner. Tech really taking most of the beating today.

Global inflation data suggests persistent price pressures.


While I’ve always used Finfiz for stock scanning, this scanner's AI-driven and feels like a peek into the future of market analysis.

Let's dig in...

Executive Summary

• Tech sector weighs heavily on markets with the Nasdaq Composite ▼ 2.46% amid growing AI investment concerns
  

• PCE inflation holds at 2.1% YoY, suggesting continued monetary policy challenges
  

• Global inflation readings from Europe trend slightly hotter than expected, potentially signaling broader price pressures
  

• Initial jobless claims show resilience at 216,000 vs 230,000 expected, suggesting continued labor market strength

Market Overview

Key Market Drivers

1. Tech Earnings Disappointment: Despite beats on current quarters, forward guidance from $MSFT and $META sparked concerns about AI investment costs
   

2. Global Inflation Pressures: Eurozone inflation at 2.0% vs 1.9% expected, while core remains sticky at 2.7%
   

3. Monetary Policy Uncertainty: Markets pricing 96% probability of Fed rate cut next week despite persistent inflation
   

4. Labor Market Resilience: Jobless claims at 216,000 show continued strength ahead of Friday’s NFP report

Stock Spotlight

• $META ▼ 4.6%: Reports strong ad revenue and AI engagement gains with FB time spent up 8% YoY, but higher CAPEX guidance and slight user growth miss weigh on shares
  

• $MSFT ▼ 5.9%: Delivers strong Q3 with $3.30 EPS vs $3.08 estimate, but Q2 revenue guidance of $68.6B disappoints against $69.7B forecast
  

• $CVNA ▲ 29%: Exceeds expectations with $0.64 EPS vs $0.29 estimate, revenue jumps 32% YoY to $3.66B
  

• $SMCI ▼ 13%: Ernst & Young resignation as auditor sparks confidence crisis, Wells Fargo suspends coverage
  

• $DASH: Achieves first profitable quarter since IPO, reporting $0.38 EPS vs $0.20 expected, with revenue growth of 25% YoY

Big Name Updates

• $UBER reports massive EPS beat of $1.20 vs $0.41, but shares slip on bookings miss of $40.97B vs $43.7B expected
  

• $COIN announces fourth consecutive profitable quarter and $1B stock buyback program despite softer crypto conditions
  

• $HOOD ▼ 14.6%: Misses estimates due to aggressive customer acquisition costs, though transaction revenue surges 72% YoY
  

• $HII ▼ 25%: Reports significant earnings miss of $2.56 vs $3.85 expected, citing supply chain challenges

Other Notable Company News

• $CMCSA explores separation of cable networks business after strong earnings beat
  

• $KLAC receives upgrade to outperform with PT raised to $850, citing AI-driven demand
  

• Samsung completes HBM3E memory qualification phase, targeting Q4 ramp-up
  

• $STLA reports 27% YoY revenue decline amid accelerated inventory reduction efforts

Sector Watch

Bond Market

• 10-year Treasury yield climbs to 4.3%, reaching early July levels
  

• Two-year yield settles at 4.17%, marking largest monthly gain in over a year
  

• Rising yields continue to pressure growth stock valuations, particularly in tech sector

Policy Watch

• PCE data shows 2.1% annual inflation, core at 2.7% vs 2.6% expected
  

• BOJ maintains rates unchanged, cuts core CPI forecast to 1.9% from 2.1%
  

• German retail sales surprise at 3.8% YoY vs 1.6% expected
  

• China manufacturing PMI flat, meeting expectations

What to Watch

1. Tomorrow’s NFP Report:

• Consensus expects significant slowdown in job growth

• Wage growth trends crucial for inflation outlook

• Impact on Fed’s next week rate decision

2. After-Hours Tech Earnings:

• $AAPL and $AMZN report Q4 results

• Focus on cloud growth and AI initiatives

• Consumer spending trends in tech products

3. Semiconductor Developments:

• Samsung’s HBM3E memory progress

• South Korea chip output declined 3% in September

• Impact on broader tech supply chain

4. Global Inflation Trends:

• European inflation readings running hot

• Central bank policy implications

• Potential spillover to U.S. markets

P.S. 
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Thanks for reading 🙂

- John