Calendar

This Week – We have a Presidential Election and potential results, the Fed, and a crescendo of earnings cycle all working in the markets this week. We think energy stocks could be the most interesting play into a decision.

Tuesday – Election, ISM Services

Wednesday – Election Results?

Thursday – Fed Meeting (25 bps expected), Jobless Claims

Friday – 1 Fed Speaker.

Trading Observations

• Election day, finally

• Hope for a result before the open tomorrow

• Encouraging that breadth positive despite market lower

• PLTR DLTR ALAB higher LSCC NXPI WYNN lower on earnings

• Would think a quiet day, but we shall see.  5700 support, 5775 resistance...

• Oscillators oversold

• Hedge funds net long VIX for first time since 2019 Barchart [x.com] though many betting on vol coming out post-election jasongoepfert [x.com]

Futures

DOW +19

S&P +6

Nasdaq +28

10-Year Yield

Oil

Consumer/Financial Healthcare

FIS – Strong beat including one from Worldpay on good margins.

JELD – Door and window maker Jeld-Wen down 22% premarket on a miss and guidance cut.

ADM – Down 8% on a miss of expectations on “preliminary earnings” and a kick out of full estimates due to financial restatements.

APO – Broad based beat. Alternatives are making a lot of money….for those who sell them. Flagship PE was only 0.3% higher for the quarter. Credit however was +3.3%. They saw $42B in inflows int the quarter as well and originated on $62B in deals. Assets are now $733B.

MAR – Baird out positive on strong RevPAR trends on strong group bookings. Organic unit growth looks decent as well.

VNO (Office REIT) – NOI headwinds persist as volume and pricing was weaker. NYC leasing was down 66% Q/Q but up 92% y/y, so who knows where this will shake out. NYC occupancy sits at 88% down from 89% last quarter on a META move out.

MQ – Down 38% on weak guidance. Pre-paid debit card business with a 100 P/E.

DLTR – Up 4% on announcement of a CEO change and in-line numbers.

HIMS had a big EBITDA beat and raised guidance.

ABNB: MScience - Q4TD Nights trend has improved on a global basis, with recovery in the U.S., contd strength in Europe, & stable-to-improved trends in other intl geos

CVNA: Hearing 3p (yipit?) showing a bit of a decel to mid 50s rev growth in the latest week, still tracking well above street for Q4

EXPE: MScience - Q4TD global volumes have paced ahead of Q3 and have improved from the exit rate in Sept; Global AOVs have seen a modest recovery in Y/Y growth versus Q3

WYNN shares drop 2.8% after the casino operator reported adjusted earnings per share for the third quarter that missed the average analyst estimate.

Technology

ALAB: +20% beat + raise cadence intact; heavily shorted. AI commentary v bullish on contd demand acceleration / strong pipeline. Put up revs of $113M vs est $97.5M and guided for $126-130M vs cons est at $108M

CRUS: -10% guides F3Q well BELOW street at midpt to $480-540mn or $510mn at midpt (down ~6% q/q) vs cons $593mn (inline at the HE). “Revenue was near the top end of our guidance range due to strong demand for products shipping into smartphones”

ICHR: beat + raise; 2 biggest customers AMAT/LRCX

LSCC: -17% poor guide; magnitude greater than feared. Anncd cutting their workforce by 14%. We proactively implemented operating expense reductions in the third quarter to help drive further improvements in profitability, and efficiency.”

GFS: +10% Q3 revs enough; adj EBITDA well ahead. Guides above .. v low expectations / negative positioning

NXPI: -6% guide worse than buyside whispers / sentiment is low in analog and MCU stocks and many are guiding below. Inline revs and slight beat to GM. Industrial down seq but all other end mkts up seq. DSO increased from 27 days to 30 days while days of inventory rose from 148 days to 149

PLTR: +13% BLOWOUT QRTR. Talking up massive AI demand - 'unwavering'; accelerated deal momentum .. 4% beat to revs accelerating 3% on a 4 ppt tougher comp and big beat to Operating Profit. Rev guide for Q4 also better .. steep acceleration in its US government sales growth of 40% in 3Q may have been propelled by greater defense technology spending amid fighting in the Middle East

VMEO: +20% Q4 rev forecast above - marking sustained growth in Enterprise with improving profitability and FCF even as Self-Serve remains under pressure

Industrials 

Boeing (BA) ticking up 2% - International Association of Machinists and Aerospace Workers members ratify new Boeing contract

Celanese (CE) downgraded to equal weight from overweight at Wells Fargo Securities. CE shares slide 17% after the chemical manufacturer’s fourth-quarter profit guidance disappoints following “severely constrained demand” in the third-quarter.

Cognex (CGNX) downgraded to hold from buy at Truist

Emerson (EMR) trading +5% - Q4 was inline - Q1 and FY guidance brackets the street - This move is all about the AZPN proposal - EMR proposes to acquire rest of AspenTech for $240/Share in cash - EMR also announced a review of its Strategic Alternatives for Safety & Productivity Segment

MasTec (MTZ) upgraded to buy from hold at Truist

Timken (TKR) Q3 misses, FY EPS lowered, stock offered down 5% – reported Q3 of $1.13B/$190M/$1.23, compared to cons of $1.12B/$201M/$1.38 – sees FY24 EPS $5.55-$5.65, down from prior $6.00-$6.20 and compared to cons of $6.06