To The Moon

Last Week's Recap

The US Market - Stocks rallied after a difficult October

• Stocks rallied Friday to kick off November as Amazon led big technology stocks into the green and traders ignored a disappointing jobs report.

• A strong start to November came after a difficult October for the market. The blue-chip Dow fell 1.3% in October. The benchmark index pulled back 1% over the month, while the Nasdaq dropped 0.5%. However, the major averages also all hit record highs at one point or another in October.

• The jobs report showed the U.S. economy added just 12,000 jobs in October, far below the Dow Jones estimate of 100,000. This marked the weakest level of jobs creation since December 2020. However, the unemployment rate held at 4.1%, in line with estimates. The dismal data was affected by hurricanes and a Boeing strike.

• As a result, the market expects that the Fed's target will be lowered by a quarter percentage point in November, according to the CME FedWatch tool.

The US Sectors & Stocks - Big tech earnings are mixed

• Apple (AAPL) slid 3.67% last week on soft guidance. The iPhone maker beat estimates for its fiscal fourth quarter thanks to strong iPhone and services sales. But it fell short of its weaker-than-expected sales growth target for the current holiday quarter.

• Microsoft (MSFT) spooked the market on its weak outlook. The giant topped fiscal Q1 estimates on both the top line and bottom line. Sales in its Azure cloud computing business rose 34%, also beating. But its guidance was lower than expectations in the current quarter, while also forecasting big capital spending for fiscal 2025.

• Alphabet (GOOGL) rose more than 3% for the week. The Google parent company beat both EPS and revenue. Google Cloud, internet search advertising revenue and YouTube revenue growth all topped views. Capital spending came in at $13.06 billion, ahead of estimates of $12.66 billion.

• Amazon (AMZN) jumped near record highs after it beat Q3 earnings. Amazon Web Services growth was in line While Amazon's forecast for fourth quarter revenue growth of 9% was slightly below expectations, the tech giant gave strong guidance for operating profit, helped by improving retail margins.

• Meta Platforms (META) cruised past earnings estimates, helped by a 19% jump in sales in the third quarter. But Meta also slightly increased its guidance for 2024 capital expenditures to $39 billion at the midpoint of its range and plans "significant capital expenditure growth in 2025." Meta shares a slightly loss for the week.

• Nvidia (NVDA) will join the blue-chip Dow index after a 25-year run to replace Intel, underscoring the shift in the chipmaking market. Otherwise, paint-maker Sherwin-Williams (SHW), which will replace Dow, will join the Dow.

• Digital advertising's strength was evident from the social media firms' earnings. Reddit (RDDT) skyrocketed nearly 40% for the week. The company turned profitable a quarter ahead of schedule. Meanwhile, Snap (SNAP) reported a 300% earnings gain. Revenue climbed 15% to $1.37 billion, just beating top-line growth slows. Shares jumped 20%.

• AMD (AMD) matched Wall Street's earnings target on better-than-expected sales. But revenue guidance for Q4 was a bit light. AMD shares fell 9.2% last week. Meanwhile, rival Intel (INTC) posted a much larger-than-expected loss in Q3 due to restructuring charges but sales were ahead of expectations.

• Super Micro Computer (SMCI) plunged 45% after the data center specialist revealed that its accounting firm, Ernst & Young, had resigned over financial reporting concerns.

• Uber (UBER) easily beat earnings, helped by the pretax benefit of unrealized equity investment gains. But shares tumbled as its Q3 gross bookings were slightly shorter than estimates.

• Carvana (CVNA) defied auto retail challenges and continued a massive turnaround. The online used-car seller raised 2024 guidance after smashing quarterly earnings estimates. Margins and gross profit per unit, two closely watched metrics, both swelled in Q3 vs. a year ago. Carvana stock soared to fresh highs.

• Ford's (F) stock price tumbled, despite its EPS and revenues beating estimates. But its full-year guidance implied a weak Q4. Meanwhile, Ford's inventory glut continues to raise fears about incentives.

• SoFi Technologies (SOFI) narrowly beat Q3 profit views while revenue rose 30% to $697.1 million, easily beating. The fintech lender also guided higher. Shares fell on earnings but rebounded.

• Twilio (TWLO) shares jumped 20% as its earnings were strong and beat estimates. The communications software maker hiked its full year 2024 organic revenue growth guidance to 7.5% to 8%, compared with 6% to 7% previously.

• Warren Buffett's Berkshire Hathaway (BRK.B) extended their retreat from stocks in the third quarter, further slashing holdings in Apple and boosting cash to a record $325.2 billion.

3. Hong Kong Market - HSI lost 0.4%

• Hong Kong stocks bounced back on Friday, driven by positive news from the recent FII summit. However, the Hang Seng Index (HSI) pared the weekly loss to 0.4%.

• Hong Kong's economic growth slowed in the third quarter, with GDP increasing by 1.8% year-over-year, a deceleration from the 3.2% growth in the previous quarter. For the first nine months of the year, GDP expanded by 2.6%.

• Hong Kong's biggest business delegations secured billions of dollars in financial commitments from Saudi Arabia, with the Saudi sovereign wealth fund announcing a $1 billion accord on the final day of the 2024 FII summit.

• Xiaomi-W (1810.HK) logged a weekly gain of 5.2% to fresh a 3-year high, as its October car deliveries exceeded 20,000 units, with the company expected to meet its annual delivery target of 100,000 units ahead of schedule.

Singapore Market - STI lost 1.06%

• Singapore stocks fell this week, with the STI down 1.06% in 4 trading days. The market is closed on Thursday for the Deepavali public holiday.

• SGX Starts Trading five mega-cap companies listed in Hong Kong including BYD, Alibaba, Tencent, HSBC and BOC, via new Singapore Depository Receipts (SDRs). The SDR is an unsponsored depository receipt that provides holders with a beneficial interest in an underlying security. Each SDR can be converted into the underlying security through an issuance and cancellation process on a one-to-one basis.

• Core inflation should end the year around 2% while near-term growth has been stronger than anticipated, the MAS said in its twice-yearly macroeconomic review published Monday. MAS core inflation is expected to average around the midpoint of its 1.5-2.5% forecast range in 2025.

Australian Market - ASX 200 lost 1.13%

• Markets saw a dip this week, with the ASX 200 declining 1.13% to close at 8118.8 points. However, the index remains up 6.44% for the year.

• Australian inflation has dropped to its lowest point since the early pandemic, though an interest rate cut is still unlikely. New data from the Australian Bureau of Statistics shows the annual CPI fell to 2.8% in September, down from 3.8% in June, the lowest rate since March 2021. Quarterly inflation came in at just 0.2%, a level last seen in June 2020, influenced at the time by COVID-related policies like free childcare.

The Week Ahead

Macro Factors - U.S. Election & FOMC

• A split or united government coming out of a consequential U.S. presidential election this week could hold the key to how stocks perform going forward. Americans head to the polls on Tuesday to elect a new president, members of Congress, and numerous state and local offices. The latest NBC News poll shows that both contestants are locked in a dead heat.

• It's not the only big event of the week ahead. On Thursday the Federal Reserve will announce its latest policy decision, with markets largely anticipating that the central bank will cut interest rates by a quarter percentage point.

• But greater attention will be paid to Fed Chair Jerome Powell’s comments during the press conference, which may give some clarity to what the central bank will do going forward and whether the central bank will sneak in another rate cut in December.

Read more >>

Earnings

• Earnings season rolls on with a week headlined by reports from Palantir (PLTR), Super Micro Computer (SMCI), Arm (ARM), Qualcomm (QCOM), and Moderna (MRNA).

• More than two-thirds of S&P 500 companies have already reported earnings, but there are still key names slated to post their latest quarterly figures. So far, the season has been solid. FactSet data shows about 75% of companies have beaten earnings estimates. S&P 500 profits are also on pace to have grown more than 5% year on year.

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