Calendar

This Week – We count 11 Fed speakers with Powell Monday mattering most. End of quarter rebalancing work likely mostly done. Bond market feels like the driver all week.

Tuesday – NKE earnings, JOLTS, ISM Manufacturing, Vehicle Sales, Vice Presidential Debate

Wednesday – ADP

Thursday – Jobless Claims, Durable Goods

Friday – Non-Farm Payrolls

Trading Observations

• Market shook off 'more hawkish' than expected comments from Powell and October now here

• S&P 5690 support, blue skies above, but keep an eye on IWM $225 - a CLOSE above could really get the animal spirits going

• Breadth very strong - the bull lives on TheCompoundNews [x.com]

Futures

DOW -108

S&P -3

Nasdaq +10

Upgrades – TEAM, BDX, BIO, CLX, DDOG, F, NEM, RRC, ROKU, TTEC

Downgrades – LNT, AR, CDW, CRL, DIS, SATS, FSLY, FIBK, FLNC, GD, GRTS, HOLX, HPQ, IGMS, IPG, MGY, PAGS, PNFP, BPOP, SNV

10-Year Yield

Gold

Consumer/Financial Healthcare

SCHW – CEO said to retire and hand the reigns to the current President. Stock down 1% (is that like flying a flag at half-mast?).

AIG – Added to RBCs top 30 global ideas.

Restaurant Comps – Down w/w. Hurricane Helene being blamed.

TTEC – Small consulting firm that was trading at a 1.5x P/E has a take private offer from the CEO at 6x P/E. If the public markets aren’t going to give you a multiple, this kind of move is brilliant (see Michael Dell).

SYF, PNFP – Downgraded to equal-weight at Wells.

Chinese Housing – Said to have 90MM vacant units with demographics working against filling it – WSJ.

ARCO – Up 15% on a new deal with McDonalds.

DIS: cut @ RayJ saying there are several headwinds, particularly in the company’s parks division

PFE raising over $3.2B from sale of 640M shares in Haleon plc.

NKE reports after the close. Some debate about whether it will cut FY guidance, though also de-risked to some extent given CEO change.

WYNN, MGM, LVS, MLCO): Macau’s gaming revenue rose 15.5% y/y in September, as casinos gear up for one of China’s biggest holidays. Gross gaming revenue (GGR) reached 17.25 billion patacas ($2.2 billion) for the month, according to data released by the Gaming Inspection and Coordination Bureau on Tuesday. The result is compared to the analyst estimate of a 14.2% increase and has returned to 78% of the pre-pandemic level seen in 2019 – Bloomey

Technology

AAPL: up 4 out 5 .... down 1% in pre given back some of Monday gains fueled by increasing confidence iPhone demand (MS, JPM positive ystrdy) … Barclays cutting IP16 builds in sign of weak demand

GOOGL: Pivotal bullish - appears to be in a very strong competitive position with a deep moat around its dominant core search business model and an obvious path to leverage its global device presence, strong AI platform and financial might to increase financial incentives to handset manufacturers for default AI placement

META: Pivotal bullish - expecting strong rev growth outlook from increased social media usage; Other positives incl new products, better ad-targeting, higher prices fueled by cost efficiencies which will be enabled by AI

Hardware/PC: HPQ (-2%), CDW lower on Citi d/g - cautious view on PCs due to the impact of a weakened macro

Semicaps: global spend on 300mm fab equipment is expected to reach a record $400 billion from 2025 to 2027, according to SEMI. The robust spending is being driven by the regionalization of semiconductor fabs and the increasing demand for AI

Memory Slowing: DigiTimes headline nothing new - Memory contract prices are expected to continue their rally in the fourth quarter of 2024, albeit at a slower pace .... shares of MICRON have been drifting back towards $100 level post T+1 pop (competitive risks; HBM oversupply concerns; lower DRAM pricing all contributing to px action)

TEAM shares rise as much as 2.4% in US premarket trading after the software stock is upgraded to outperform from market perform by Raymond James, citing growth potential for the cloud business despite a period of undershooting expectations.

DDOG shares are up 2% in premarket trading, after D.A. Davidson & Co upgraded the software company to buy from neutral.

Industrials 

Alcoa (AA) upgraded to buy from neutral at BofA

Boeing (BA) considering selling $10B in new shares – Bloomberg - People familiar with the discussions say that the company is exploring options with advisers, and that any equity raise probably won't happen for at least a month, because Boeing would like to have a sense of the total bill from the strike it's currently facing

Ford Motor (F) upgraded to buy from neutral at Goldman Sachs

General Dynamics (GD) downgraded to equal weight from overweight at Wells Fargo Securities

Transportation & Logistics - The International Longshoremen’s Association shut down all ports from Maine to Texas on Tuesday, according to a statement from its Facebook page

Transports Baird Preview - Expect transports trade in line overall during reporting, but an East/Gulf Coast port strike would spark a near-term trade higher (inverse also holds). While there is less risk to Q3 estimates, it is harder to see much improvement in near-term run-rate profitability (ex-disruptions), which likely weighs on 1H25 estimates. Incremental demand/pricing benefits from a potential East/Gulf Coast port strike would help bridge the gap until a broader market inflection unfolds.