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.

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

Friday – 1 Fed Speaker.

Trading Observations

• Fed today - would be very surprised at anything other than 25

• If Powell benign at presser, major events out of the way thru year-end and should have a tailwind for equities - Once the calendar turns, we see

• For perspective, back in 2016, when Trump won, the SPX traded at 18.5-19x, 10-year yields were below 2%, the corporate tax rate was 35%, and the nation’s debt/GDP was around ~75%

• Now, those numbers are ~22.1x (based on a ~$268 EPS number for 2025), ~4.4%, 21%, and ~125%

• APP LYFT ZG HUBS QCOM higher. MELI MTCH DUOL lower on earnings

• IWM finally CLOSED above $225, and on heavy volume

• TRANSPORTS broke out to a 3-YEAR high

• Blue skies above, 5875 first support

• Inflation expectations rising SoberLook [x.com] with lumber exploding Barchart [x.com]

Futures

DOW +17

S&P +15

Nasdaq +95

10-Year Yield

Oil

Consumer/Financial Healthcare

JPM – Downgraded at Baird. XLF had one heck of a run yesterday following the election on anticipated deregulation and M&A heating up.

DUOL: -5% crowded long; 3Q Revs $193mn (est $189mn) and Bookings $211mn (+38% y/y) vs est $196mn. Guides 4Q revs $202.5-205.5mn (est $201.5B). Commentary: “This momentum came from contd execution against our plan to grow users and daily engagement, increase family plan adoption, and roll-out Duolingo Max more broadly"

MTCH: -15% softer ... mixed with miss on revs/Tinder revs/payers above, but Q4 guide looks bad; Q4 Revs $865M-$875M vs street at $905M ... Tinder direct rev also a bit worse than expected along with the MSD y/y decline in payers vs bogeys of closer to flat

Wayfair/Housing: names weak on rising yields: Z -6.5%; OPEN -7%; RDFN -4%; W -11% .. Wayfair also to get hit by Tariffs

ELF jumps 10% in premarket trading after the cosmetics company boosted its full-year guidance and reported second-quarter adjusted earnings that were ahead of the average analyst estimate.

Technology

AMC: -4% Q3 revs better; reveals 'GO Plan' for theater upgrades. "greatly improving industry-wide box office throughout the Q3"

AMD: 9000-series X3D desktop CPUs to debut

ANSS: Q3 EPS eats; software license revs well ahead. ACV $540.5m, +18% Y/Y (est $513M). Cont to expect FY 2024 ACV growth to be double-digit.

APP: +27% blowout of night - beats 3Q EBTIDA by ~13%; revs $1.2bn (+39% y/y) vs cons $1.131bn (+31% y/y) - strength was driven by continued improvements to the AXON machine-learning algorithm during 3Q ..... Mmgt confident in 20-30% growth in AppLovin’s ad network despite the high bar; cont leverages the power of AI ... from call: fact that APP’s new e-comm pilot is the "best product they’ve ever released"

ARM: -4.5% solid F2Q Revs beat / big License revs beat vs weaker royalty revs. BUT guides 3Q revs slightly BELOW / INLINE with street at midtpt $920-970mn (est $951mn). Reit FY guidance .... forecast suggests “growing broad-based weakness, particularly in industrial/auto, potentially offsetting moderately improved smartphone expectations into the Dec quarter

BMBL: -5% visibility on turnaround limited; inline print post major miss in Q2 but timing of improvement remains cloudy. Fundamental still poor / just not much appetite for these type of stories at moment

DDOG: -2.7% revs +26% (inline to slight miss); 100k customers rose ~8-9% y/y; Q4 guide meh ($709-713M vs est $712M). FY guide taken up slightly .. conf call 8am ET 1 844 543 0451 password: 429

LYFT: +23% much better with better bookings and EBIDA + strong Q4 bookings/EBITDA guide ... sentiment had been mixed going into the print given mixed 3p data and structural bear case fears so this will be received well; have to think benefits from UBER story being less clean than was case just a month ago

PLTR: Jefferies cutting to UNDERPERFORM - trading at 38-times estimated 2025 revenue makes Palantir the most expensive software name while insider selling has picked up on 10b5-1 plans. Co's fundamentals are alive, but it would have to accelerate growth to 40% for four yrs straight and trade at 12x est 2028 rev just to hold its stock price, which seems unlikely

PANW: -2% cut to Negative from Mixed at OTR

QCOM: +8% crowded short - Strong results across the board espc given neg sentiment around handsets (AAPL, QRVO misses) coming into the print. Rev/EPS beat while guide also looks very good with rev guide 3.5% above street. Stock rolled during call w/ ppl citing lack of commentary around March Q

TTWO: +3.8% Q2 bookings beat (outperformance from GTA + Borderlands franchises); Mobile worse vs PC better; reit FY net bookings for next yr and year after - mix shift between RCS and full game seeming generating some buzz

SOCIAL MEDIA Australia will ban social media for children under 16 (Bloomberg)

Industrials 

Array Technologies (ARRY) downgraded to neutral from buy at Guggenheim and downgraded to neutral from buy at BofA

Autoliv (ALV) upgraded to outperform from neutral at Oddo

D.R. Horton (DHI) downgraded to Market Perform from Outperform at Raymond James

Ford Motor (F) downgraded to market perform from outperform at Bernstein

SolarEdge Technologies (SEDG) downgraded to underweight at Piper Sandler and downgraded to underperform from neutral at BofA

SEDG) shares slump as much as 21% in US premarket trading after the renewable-energy-equipment provider took a $1-billion writedown and issued underwhelming guidance for the fourth quarter.

Sunnova Energy (NOVA) downgraded to neutral from buy at Guggenheim

SunRun (RUN) downgraded to neutral from buy at Guggenheim