Calendar

This Week – Heavy earnings week and heavy on economic data the Fed cares about. Watch Capex spending by the MANGMAN as an AI indicator as well as interest rates.

Thursday – PCE Index (Fed cares), Initial Jobless Claims

Friday – Non-Farm Payrolls

Trading Observations

• Earnings taking center stage - GOOGL RDDT SYK V SNAP higher,  AMD LLY CAT FSLR CMG  QRVO (2nd night in a row AAPL supplier guiding lower) htsfhickey [x.com]) lower

• ADP, Q3 GDP, pending home sales all premkt

• 5875 resistance, 5760 support 

• Oscillators pushing further oversold

• II Bulls drop slightly to 57.6% from 58.3% (over 60 a headwind)

• Institutional traders big net sellers last week Barchart [x.com] and while still exposed and not stretched Dailychartbook [x.com] 

Futures

DOW -74

S&P -7

Nasdaq -40

10-Year Yield

Oil

30 Year Fixed Mortgage Rates

Consumer/Financial Healthcare

UBS would like to buy another U.S. wealth management firm to bolster the Paine Webber business it bought in 2000, but it's in no rush, Chairman Colm Kelleher said on Tuesday, according to a media report

UBS – Higher on a surge in profit as the Credit Suisse integration looks to be adding value. Best earnings since 2008.

Visa – Nice beat with F25 guidance in line. October trends look better than September slightly. Baird is out touting it as a long-term compounder. I doubt this print scares anyone.

Weekly Retail traffic decelerated from the previous week sharply, but Columbus Day shift is at play here so we would wait another week to judge.

ESS – Large costal apartment player reported and missed on higher expense ratio. New lease rates don’t look great either.

CHWY -1.6% Keith Gill Reports Exit From Chewy Stake (ie Roaring Kitty)

CMG - Expectations were high heading into the print, and shares were indicated down ~5% after hours (after being up 17% since the Q2 report vs. S&P 500 +7%), perhaps due to slight headline revenue miss (related to new units, as comps performance was in-line).

LLY traded -11% on their #’s. Weakness historically bought, we will see.

Technology

AAPL chain lower: Apple suppliers are falling after Qorvo (#1 custy AAPL) gave poor rev/profit outlook ... SWKS-5.7%, STM-3%, QCOM-2.8%, MU-1.2%, AVGO-0.7% (CRUS was -2% aftr hrs) ... Qorvo has ~46% rev exposure - highlights fears about smartphone-demand amid reports of order cuts by Apple

QRVO: -19% poor guide; neg read for AAPL / handset supply chain (SWKS QCOM CRUS MU) .. pretty poor here and mgmt lbaming unfavorable product mix shift in 5G Android smartphones (selling more lower end handsets; doesnt mention AAPL but not great read for all)

AMD: -8% not enough + raises AI chip outlook to >$5B (no magic from Lisa this time around); largest changes are arguably opex being a bit higher and GMs being a bit lower ...... Qrtr fine with rev beat driven by DC and Client, better GMs - guide roughly inline ... “Looking forward, we see significant growth opportunities across our data center, client and embedded businesses driven by the insatiable demand for more compute.”

• AMD Some thinking the AMD reaction a "bit harsh". NVDA continues to have "most favored nation status"… the stock traded +8% into the print. NVDA’s first mover advantage evident in training and software. AMD also said that it believes it gained share in the server CPU market, citing wins from enterprises such as Meta.

OpenAI/chips: OpenAI is working on a custom AI chip in partnership w/Broadcom while also adding AI silicon from AMD as the firm looks to reduce its reliance on Nvidia (Reuters)

SMCI – 30% Super Micro Says Auditor Ernst & Young Resigned Amid Review

GOOGL: +6.4% closing gap from Jully puke / back to ~$180 .. very solid vs light positioning / neg sentiment. Search/YT cleared bar; great cost discipline as they also invest .... beat driven by higher rev and better oper margins. Main sources of rev upside were subscriptions/platforms/devices ($10.65B vs St $9.7B) and Cloud ($11.35B vs est $10.8B) while Search and YouTube ads were only slightly ahead .... Google Cloud was particularly strong when it comes to profitability ($1.95B vs est $1.1B). GOOGL read (Azure/AWS): Google Cloud acceleration to +35% y/y in qtr

RDDT: +23% crowded long delivering - Ad revs accelerated to +56% y/y - crowded for right reasons adn will remain widely held given scarcity of quality growth. Qrtr huge beat, raised above (sees Q4 rev $385M-$400M, est $357.9M). EBITDA 94M vs street at $59M; DAUs 97.2M vs est 96.4M (~91M last qrtr)

SNAP: +11% UW name. EBITDA, revs inline. Guide inlinish - not trainwreck which is a win (low bar). Users: DAUs 443M (est 441.16M); FCF $71.8M vs negative $60.7M y/y (est $44M) ... Q4 guide mixed (revs below; EBITDA inline)

Apple - Thurs night; it seems on any given day there is a “iPhone 16 sales are tracking poorly” followed by an “iPhone 16 sales are tracking well” headline, leaving investors a bit nervous into the report; it’s likely iPhone sales are fine with a favorable mix while mgmt. reiterates its optimism around Apple Intelligence

AMZN - Thurs night; this is probably the consensus favorite among Mag7 over the long-term, but investors are nervous in the near-term about heavy spending putting a dent in op. income

INTC - Thurs night; the bar is so low after the disastrous Q2 update that Intel won’t have to do much to come off seeming “better-than-feared”, although sentiment remains quite gloomy on the medium and long-term prospects

META - Wed night; this seems to have become the most loved of the Mag7 stocks, at least in the near-term, as investors anticipate continued bullish trends in the core business while the maligned Reality Labs unit shows some signs of light; in addition, Meta is under less regulatory scrutiny than its mega-cap peers.

MSFT - Wed night; this HAD been the consensus top pick among Mag7 and its still much loved, but some of the AI sheen has come off the stock amid worries about the OpenAI relationship, rising competition, huge capex, etc.

Industrials 

Solar on watch – FSLR traded down big on their qtr. Lowered their guide as well… Called out India

Boeing (BA) downgraded to market perform from outperform at Bernstein

CAT – Q3 Revs and EPS miss, stock down 5%

GE Vernova (GEV) upgraded to buy from outperform at Daiwa

Graphic Packaging (GPK) Cut to Hold at Truist Secs; PT $30

Kratos (KTOS) Cut to Neutral at B Riley; PT $26

Lear (LEA) Cut to Equal-Weight at Barclays; PT $120

Masco (MAS) Cut to Sector Perform at RBC; PT $80

Newmont (NEM) downgraded to neutral from buy at UBS

Wallbox (WBX) Cut to Hold at Stifel; PT $1.50

MEGACAPS: GOOGL kicking things off nicely for megacap tech complex which has lagged / been source of funds over the last 2-3 months .. reminder of performance below. Positioning cleanest its been in a while – META MSFT up tonight; AMZN AAPL tmrw night … Nvidia closer to Thanksgiving