Calendar

This Week – Earnings heavy with over 100 S&P 500 names reporting, but TSLA the only MANGMAN(T). The Fed Speakers are almost all non-voting, so we would expect irrelevance.

Tuesday – Philly Fed, Earnings – GM, KMB, PHM, RTX, LMT, FI, GE, ENPH, TXN

Wednesday – Existing Home Sales, Beige Book. Earnings – T, BA, HLT, KO, IBM, TSLA, LVS, COF, NOW

Thursday – Jobless Claims, KC Fed, New Home Sales, Earnings – LUV, TSCO,

Friday – Durable Goods, Earnings - HCA

Trading Observations

• Selling continues

• Breadth was over 3:1 negative Mon with only Tech higher

• All chatter is about rates on an otherwise quiet morning, no obvious catalyst

  • 10yy had a 1.5z move yest, many cite 4.25%+ as problematic for stocks

  • Now up 50bps since Fed cut in September and above the 200D [x.com]

• STX and TXN tonight and LRCX tomorrow as only 47% of the SOX is currently above their 200-day avg (S&P500 is 80%)

• Near-term support is 5842, then 5820

Futures

DOW -130

S&P -21

Nasdaq -83

10-Year Yield

Oil

Gold

Consumer/Financial Healthcare

FI – Down 1% as the stock has had a solid run into earnings. Bottom line beat on good margins. Clover growth was +28%, which is flat sequentially. Guidance looks solid. I see nothing to worry about here except expectations.

ZION – Up 3% as NII continues to improve.

BKU – Down 5% - PPNR missed on higher costs and slightly lower revenue than expected. NII wasn’t great either. Most banks have been nothing but positive so they stick out as a negative outlier.

IVZ – Down 6% on what read to me as good earnings outside operating margin at 6.6% vs 15.8% y/y. Flows are solid, and investors must have been hoping for better margins.

TGT fires off a sweeping round of price cuts. https://finance.yahoo.com/news/target-reduce-prices-more-2-100100813.html [finance.yahoo.com]

NKE signs extension with NBA/WNBA through 2037

DIS names Gorman to serve as next chairman… anticipates naming new CEO in early 2026.

Technology

APP: init Buy @ Loop / PT $181 .. "company has become indispensable infrastructure for the mobile gaming industry and is proving itself as a big data and AI play for investors"

Semis/Chip Wars: ASML CEO said he expects the US to continue pressuring allies to further restrict sales of its chip technology to China (BBerg)

PINS: -3.1%....Cleveland negative / Q3 spend looks slower vs expectations on pressure to brand (higher DR focus), PINS lower prioritization for retail / CPG

SNOW: heard Clev downgrade

QCOM: chatter that QCOM is the exclusive supplier for Samsung flagship S25, instead of previously suggested MEDIATEK (-1.5%) Dimensity 9400 chips

Software/SAP: +4% Cloud rev +27% ccy acceleration (est +26%); raised 2024 outlook for cloud and software rev, oper profit, FCF ... Signifcnt part of cloud deals in Q3 incl AI use cases. Solid execution / not a ton to pick at here

NOW: #s Wed night .... bogeys are for 23.5-24% cRPO vs street at 22%

STX: #'s tonight | 5.6% implied move .. Wedbush bullish on better shipments/pricing in CQ3; supply chain continues to suggest that HAMR is still

TXN: #s tonight | 4.8% implied move ....sentiment pretty negative / ongoing debates on cylical trends ... mgmt last Q pointed to continued rolling recovery. Data points remain choppy @ best - the recovery in the co’s largest end markets, Auto (34% of CY23 revs) and Industrial (40%), continues to lag expectation

Industrials 

Aspen Aerogels (ASPN) 4.3M-share secondary priced at $20/share through Goldman Sachs, Morgan Stanley

Canadian Solar (CSIQ) downgraded to sell from neutral at Citi

First Solar (FSLR) upgraded to buy from neutral at Citi

Fluor (FLR) upgraded to buy from neutral at Citi

GE Aerospace (GE) trading down 5% - Q3 Revs/EPS beat, FY EPS/FCF/Operating Profit guidance raised

General Motors (GM) ticking up 1% - Q3 Revs/EBIT/EPS ahead, FY EPS/EBIT midpoint raised. High prices boost profits; lift low end of ’24 outlook. GM has been able to hold the line on high-demand vehicles like its gas-powered GMC Yukon SUV and Chevy Silverado pickup

RTX Corp (RTX) trading up 1% - Q3 Revs/EPS beat, FY Revenue and EPS outlook raised (FCF reaffirmed)

Sherwin-Williams (SHW) trading down 8% - Q3 top/bottom miss - Reports Q3 EPS $3.37 ex-items vs consensus of $3.55

Tecnoglass (TGLS) downgraded to market perform from strong buy at Raymond James

MMM +4%...beats; updates FY guidance