To The Moon

Stock market was pretty quiet and calm for majority of the trading session. We began to see a late afternoon rally effort which helped to close third quarter strong.

Losses were minimal even when we saw the day’s lows during the time around 2.30pm ET when we heard comments from Fed Chair at an NABE Conference.

Fed Chair indicated that if the economy evolves as expected, there would be two more cuts this year of 25 basis points each. The fed funds futures market had anticipated a total of 75 basis points worth of cuts before year-end, causing some initial selling interest that pushed the S&P 500 down by as much as 0.6%.

The probability of a 50 basis point in November is at 38%. However, the market quickly rebounded, buoyed by the understanding that the Fed will still cut rates and will act more aggressively if necessary. This "Fed put" trade, combined with the successful "buy-the-dip" strategy, helped the S&P 500 hit session highs just before the close, ending the third quarter on a positive note.

Manufacturing In The Chicago Fed region Contracted

The September Chicago PMI came in at 46.6 with consensus at 46.2 as compared to 46.1 in August.

A reading below 50.0 indicates contraction, so the September figure suggests manufacturing activity in the Chicago Fed region contracted but at a slower pace than in August.

We will be expecting the following economic data on 01 October 2024.

Note Yield Closed Lower After Increased Due to Late Rally

The treasury market responded positively after the late afternoon rally with 2-year note yield rose nine basis points to 3.65%, while the 10-year note yield climbed five basis points to 3.80%.

But at end of session, we saw 10-year note yield close twelve basis points to 3.775% and 2-year note yield also dropped by four basis points to 3.643%.

S&P 500 Sector Performance Modest

Throughout the session, we are seeing negative performance in most sectors but things start to turn around in late session. Nine of the 11 S&P 500 sectors finished in positive territory with gains ranging from 0.1% to 0.8%.

The energy sector rose +0.83%, influenced by a Washington Post report indicating that Israel has informed the U.S. of an imminent and limited ground operation in Lebanon.

The communication services sector also gained +0.79% received a boost from Alphabet (GOOG) and Meta Platforms (META), along with industry-related M&A news.

The materials sector declined -0.6% and the consumer discretionary sector also declined -0.28% were the only exceptions, with the latter hindered mainly by a loss in Amazon.com (AMZN).

Stocks To Watch

General Motors (GM) subsidiary Cruise has entered a consent order with the National Highway Traffic Safety Administration (NHTSA) due to incomplete reports on crashes involving its automated driving systems. The order addresses a specific incident where a Cruise vehicle dragged a pedestrian post-crash. The order includes provisions to enhance compliance and safety practices at Cruise.

Verizon (VZ) experienced significant service outages affecting nearly 105,000 users across several major cities, including Chicago, Phoenix, and Los Angeles. The company acknowledged the issue and stated that engineers are working to resolve it. The outages began before market opening and peaked around midday.

$Nike(NKE)$ is expected to report a significant decline in revenue for its first quarter, with Wall Street anticipating EPS of $0.53 and revenue of $11.65 billion. This earnings report is the first since Elliott Hill took over as CEO. Analysts have expressed concerns over consumer demand, macro factors, and rising competition.

If we looked at the MACD and KDJ chart, it is pretty opposite, as MACD show that there is upward trend potential, but if we use KDJ for short term, we can see that the KDJ is moving downward signalling a downside, this could mean that investors confidence and sentiment for Nike is going to continue in the negative despite they are having a new CEO.

So how can we take advantage of this trend? I believe we could look at an opportunity to take advantage of the lower stock price, once we get an earnings surprise, we might be able to have a significant gains.

$Intel(INTC)$ and Samsung's (OTCPK:SSNLF) recent issues are likely to impact the semiconductor equipment market negatively, with wafer fab equipment spending projected to be lower than expected. This has earnings implications for companies like Applied Materials (AMAT), ASML (ASML), KLA Corp. (KLAC), and Lam Research (LRCX).

We could be seeing Intel returning its gains over the past few days, as we are seeing that KDJ is signaling a downward trend, so moving into October, we could be seeing Intel trading below $20 again.

$BGC GROUP(BGC)$ announced that its Q3 2024 revenue and pre-tax adjusted earnings are expected to be at the high end of its previously stated outlook. The company had guided Q3 revenue of $505M-$555M and pre-tax adjusted earnings of $110M-$127M.

Summary

I think we could begin October on a quiet trading session, but the sentiment should picked up,as the China economic stimulus did not really encourage US investors to trade more volume. There is actually a slowdown after the bullish rally for the Chinese ADRs stocks.

I would be back focusing on the tech stocks and mega cap in October as we should be seeing the effect of the rate cut coming.

Appreciate if you could share your thoughts in the comment section whether you think October could be a better month as we feel the effect of the rate cut more significantly.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.