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.

Wednesday – ADP

Thursday – Jobless Claims, Durable Goods

Friday – Non-Farm Payrolls

Trading Observations

• China continues to ramp

• Pullback in US with war drums (think this is short-lived and noise personally, but we shall see)

• 5690 holds for now, and the level to watch is 5640 below.  5765 is clear resistance now

• ADP says US Firms added 143k jobs in Sept, est 125k.

• Keep an eye on the SOX - three red days in a row - hasn't gone four since March

• II BULLS edge higher to 55.7% from 52.5% (over 60 usually a headwind)

Upgrades – BOH, CVBF, DQ, HAFC, HD, PARR, CRM, SAIC, SPHR, TMP, TOWN, HD

Downgrades – BAH, ESQ, FMBH, GEV, GRTS, HOG, IBM, KZR, MELI, MBLY, NKE, OXY, PBF, PVH, SSTK, SITC, TMUS, ZIM, TMUS

Futures

DOW -46

S&P -4

Nasdaq +26

10-Year Yield

Oil

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?).

LPLA down big on CEO termination.

NKE reported FQ1 EPS upside thanks to solid GMs and cost controls, but the FQ2 guide fell short and mgmt. said it’s F25 outlook has moderated (although it withdrew an explicit forecast for the FY).

CMG /SBUX – Bill Ackman reiterated his praise for Chipotle despite the company recently losing its CEO and criticized Starbucks, noting the firm has raised prices too much while allowing the experience to degrade – Barron’s 

HUM – Lower after preliminary Medicare advantage data. about 25% of members enrolled in 4+ star plans for 2025 – Bloomey. Hit yesterday but more numbers released last night. Expects 2024 $16 eps from $29.10. Health care costs continue to plague the industry.

• Downgraded to Equal weight at Stephens PT $250

HOG – Baird Downgrading to Neutral PT $40 from $44. We contacted HOG dealers for an update on Q3 trends. Dealers reported weak retail, excess inventory, and caustic sentiment – all of which suggest risk to guidance.

HD is upgraded to buy from accumulate at Gordon Haskett, which see home improvement demand increasing as mortgage rates fall. Its shares edge higher by 0.4% premarket.

Technology

AAPL will unveil a new low-end iPhone SE and fresh iPads early next year – Bloomey

AAPL shares edge lower, falling 0.4% in premarket trading as JPMorgan analysts follow their peers at Barclays and Citi to trim their estimates for iPhone units.

TWLO: +4% anncd integration with OpenAI’s realtime API for Building Conversational AI Applications .. odd delay as was anncd ystry

Samsung Electronics is cutting thousands of jobs in Southeast Asia as the firm looks to reduce headcount - bloomey

Google working on Reasoning AI, chasing OpenAI’s efforts – Bloomey

OpenAI is betting on AI agents hitting the mainstream in 2025 – FT

ORCL plans to invest more than $6.5 billion to establish a public cloud region in Malaysia, aiming to meet the country's growing demand for artificial intelligence and cloud services.

BABA: Alibaba Group Holding Ltd. discloses it repurchased 414M shares for $4.1B during Q2 under its existing buyback program

TMUS shares are down 0.8% in premarket trading, after Raymond James downgraded the wireless network operator to outperform from strong buy.

Industrials 

Prompt crude trades up by over $2/bbl this morning, extending yesterday’s rally following Middle East tensions in the overnight session. After yesterday’s attack (more below), Israel’s Prime Minister Netanyahu stated that “Iran made a big mistake tonight, and it will pay for it.”

Port strike impact: many companies took precautions in anticipation of the US port strike, which means the fallout on inventory availability should be fairly limited for the time being.

F on Tues said it would slash the subscription price for its BlueCruise hands-free driving technology – Reuters

GM on Tues reported US new vehicle sales down 2.2% in Q3, w/the drop driven largely by weakness to fleet customers – Detroit Free Press

TSLA - Deliveries 462,890, estimate 463,897