To The Moon

Last Week's Recap

The US Market - The S&P 500 ended a six-week winning streak

• The S&P 500 and the Dow ended a six-week winning streak, as rising bond yields and resilient economic data contributed to sentiment's pause.

• Tesla's rally helped fuel a seventh week of gains and a fresh record high for the Nasdaq. Investors will focus on upcoming tech earnings, with AI monetization trends in the spotlight.

• A big surge in bond yields served as a big hurdle, as a similarly hot number would likely temper rate-cut expectations further as markets see less urgency from the Fed to prop up the economy. The 10-year US Treasury yield notably cooled off from its three-month highs after breaking above the 4.25% mark during Wednesday’s session.

The US Sectors & Stocks - TSLA skyrocketed 22%

• Tesla (TSLA) stole the show last week, notching its biggest day in over a decade on Thursday with a 22% up. Despite its Q3 revenue slightly missing expectations, investors cheered as gross margins jumped on Tesla Energy margins, lower raw material costs and other factors. CEO Elon Musk expects vehicle deliveries to rise for the full year. That require huge Q4 deliveries. Musk sees deliveries rising 20%-30% in 2025.

• McDonald's (MCD) fell 7.57% for the week, as the CDC linked an E. coli outbreak to its Quarter Pounders. A recall on the slivered onions used in those burgers was announced. Before, Donald Trump made fries at a McDonald’s in Pennsylvania on Sunday and answered questions through the drive-thru window.

• Tapestry (TPR) jumped 13.5% on Friday on the heels of a federal judge blocking the Coach owner’s proposed acquisition of Capri Holdings (CPRI). The Michael Kors parent’s stock plummeted nearly 49%.

• ServiceNow (NOW) earnings per share rose 27% year over year, comfortably beating. ServiceNow guided slightly higher on Q4. Germany's SAP (SAP) reported flat EPS as revenue climbed 9% to $9.21 billion, both slightly beat. The business software giants both hit record highs on Q3 results and rose 3% for the week.

• Spirit Airlines (SAVE), which has been exploring a bankruptcy filing, will cut staff, reduce its flight schedule and sell 23 planes for about $519 million. The struggling budget carrier said cost-cutting moves that will go into effect early next year would save it $80 million. The stock price skyrocketed nearly 90% for the week.

• Deckers Outdoor (DECK) was up 4% after the parent company of Hoka sneakers and Ugg boots reported fiscal second-quarter earnings and revenue that smashed analysts' estimates. Sales rose 20% from a year earlier to $1.31 billion. Hoka sales surged 35% and Ugg sales rose 13%. Deckers also issued a forecast that called for a 12% sales increase in fiscal 2025.

• Coursera (COUR) tumbled 10% after the online learning platform cut revenue guidance for the year and said it would reduce its global workforce by about 10% as part of a plan to trim expenses. The company expects revenue for the year of $690 million to $694 million, below its prior guidance of $695 million to $705 million.

Hong Kong Market - HSI lost 1%

• Hong Kong stocks edged on Friday, as a rebound in property sales in China spurred optimism about the growth outlook. However, the Hang Seng Index (HSI) pared the weekly loss to 1%.

• In an encouraging sign for the economy, residential pre-sales for 30 key cities in China rose by 22 per cent from a high base in the previous seven-day period last week.

• “We expect monthly industry sales in the fourth quarter to register year-on-year growth. For 2025, we think industry sales could see positive year-on-year growth for the first time since 2022.” said Raymond Cheng, managing director at CGS International Securities in Hong Kong.

• UBS Group last week raised its forecast for China’s growth in 2025 to 4.5% from 4%, citing better-than-expected third-quarter growth and the government’s stimulus package.

Singapore Market - STI lost 1.3%

• Singapore's stocks edged lower. Benchmark the Straits Times Index (STI) fell 1.3% to 3593.41 last week.

• Citi Research analyst Kaseedit Choonawat has kept his “buy” call on SATS LTD (S58). at a raised target price of $4.25 from $3.76 previously to reflect a more robust air cargo volume growth in outlook into the 2HFY2024/2025.

Australian Market - ASX 200 lost 0.87%

• Australian shares closed lower for the week, as risk-averse investors awaited near-term catalysts. The S&P/ASX 200 lost 0.87% to close at 8,212.30. The domestic third-quarter consumer price index, scheduled for release on Oct.30, may provide a catalyst for traders while waiting for the results of the US presidential elections.

• WiseTech Global (ASX:WTC) founder Richard White will step down immediately as a director and chief executive and take a short leave before transitioning to a consulting role amid a string of controversies surrounding the billionaire businessman. The tech firm's shares rallied 13% on Friday, but still lost nearly 8% during the week.

• Big gold miner $Newmont Corp(NEM.AU)$ had a shocking day, with its shares dropping a precipitous 13.6% to $70.74 after its earnings showed that the gold producer was struggling to deal with rising costs. The big share fall came despite the company reporting the biggest quarterly profit in five years courtesy of rising gold prices.

The Week Ahead

Macro Factors - Inflation & big tech earnings

• In the week ahead, an update on the Federal Reserve's preferred inflation gauge, the October jobs report, and earnings from Big Tech stalwarts Alphabet (GOOGL,GOOG), Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), and Meta (META) will drive the direction of markets to kick off November.

• Thursday will bring the latest reading of the Fed's preferred inflation gauge. Economists expect annual "core" PCE — which excludes the volatile categories of food and energy — to have clocked in at 2.6% in September, down from the 2.7% seen in August. Over the prior month, economists project "core" PCE at 0.3%, compared to 0.1% the month prior.

• The Bureau of Economic Analysis is slated to release the advance estimate for third quarter GDP. Expectations are that the US economy continued on its solid path and grew at an annualized rate of 3% in the quarter, in line with the growth seen in the second quarter.

• On Friday, the Bureau of Labor Statistics will provide a fresh look at the national employment situation. The October jobs report is expected to show 125,000 nonfarm payroll jobs were added to the US economy, with unemployment holding steady at 4.1%, according to data from Bloomberg. In September, the US economy added 254,000 jobs, while the unemployment rate fell to 4.1%.

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2、Earnings

• A busy week of corporate earnings awaits, with 169 members of the S&P 500 expected to report quarterly results. Ford (FORD), AMD (AMD), McDonald's (MCD), Eli Lilly (LLY), and Exxon (XOM) will be among the companies highlighting the schedule.

• Big Tech earnings will test that narrative in the week ahead. FactSet recently pointed out the "Magnificent Seven" tech stocks were set to grow earnings year over year by 18.1% this quarter, while the other 493 companies in the S&P 500 are expected to see just 0.1% growth.

• "We expect big tech earnings next week will display a mix of steady operational performance, AI-led revenue acceleration, and resilient advertising that signals ongoing health and innovation," Global X research analyst Ido Caspi told Business Insider. "We expect to see further evidence of generative AI moving along its growth curve and continued shift from experimentation to widespread monetization," he added.

• With 37% of the S&P 500 having reported quarterly results, the index is pacing for 3.7% year-over-year earnings growth. According to FactSet, this would be the slowest annual growth rate since the second quarter of 2023.