Tiger Weekly Insights:2024/10/21—2024/10/27

I. Performance and Valuation of Global Equity Indices

Data source: Bloomberg, 2024/10/21-2024/10/27, compiled by Tiger Brokers

II. Key Market Themes

i. Countdown to the U.S. Election: Markets Betting on a Trump Rally, Caution Needed During Macro Super Week!

• The highly anticipated U.S. 2024 election is entering its final countdown, with both the Republican and Democratic parties actively campaigning to make a last push. Interestingly, there is a wide disparity in polling data across different media platforms. For instance, CNN's recent poll shows support for both sides nearly tied, while The Economist’s model predicts a 54% chance of Trump returning to the White House. Additionally, external betting site Polymarket indicates a 66% probability for a Trump win.

• Recently, capital markets have been eagerly betting on a "Trump rally." The 10-year U.S. Treasury yield has continuously risen, approaching 4.3%, while the U.S. dollar index has strengthened again. Trump Media & Technology Group (DJT.US) surged nearly 200% in a single month. It’s worth noting that multiple economic data points are set for release this week: Q3 GDP initial value on Tuesday, PCE inflation on Thursday, and non-farm payrolls, unemployment rate, and services PMI on Friday. Each of these data points could impact next week’s FOMC meeting and, in extreme cases, influence the trajectory of the election.

Data source: Tiger Brokers

ii. Tesla's Earnings Preview Heats Up: What Lies Ahead for Tech Giants in the Biggest Earnings Week?

• Recently, Tesla $特斯拉(TSLA)$ released an intriguing Q3 earnings report. Despite revenue falling short of market expectations, its gross margin surged to an impressive 19.8%, far exceeding forecasts. Additionally, even with expanding capital expenditures, Tesla's free cash flow beat expectations significantly, reaching an astonishing $2.74 billion. This contrast not only demonstrates the robust cash-generating power of Tesla's automotive business but also highlights the company's strong commitment to Full Self-Driving (FSD) technology.

• Moreover, Tesla’s management has provided exciting guidance for the future. The CFO stated that the per-unit cost of car production is hitting record lows and is expected to decrease further. Elon Musk went a step further, projecting that by Q2 2025, FSD's safety capabilities will surpass human driving. For the first time, management also confirmed that a new affordable model will be launched in the first half of 2025, and the Cybertruck, which has now achieved positive gross margins, is on track for mass production in 2026.

• Tesla's impressive single-day rally of over 20% has primed the market ahead of the upcoming earnings super week. So far, around 37% of S&P 500 companies have released their earnings, with notable profit growth seen in sectors like communication services, information technology, and finance. In contrast, energy and industrial sectors have lagged.

• This week, major tech giants including Microsoft $微软(MSFT)$ , Google $谷歌(GOOG)$ , Apple $苹果(AAPL)$ , and Meta $Meta Platforms, Inc.(META)$ are set to release their earnings reports. Interestingly, implied volatility for these big tech companies remains relatively low as earnings approach. This is partly due to tempered market expectations and a gradual reduction in market divisions.

Data source: Tiger Brokers

Data source: Tiger Brokers

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