Trading Observations

• Friday fatigue after a big earnings week.

• Yesterday was a tough one following big cap tech sell off, nasty close.  Down ~3.8% from highs, is that enough?

• Large Cap Tech Theme – CAPEX remains strong, bodes well for NVDA etc into 2025.

• Employment numbers this am were soft, giving fed some room for further cuts.  Yields down.

• 5760 was support 5875 resistance....

Futures

DOW +188

S&P +26

Nasdaq +89

10-Year Yield

Oil

Consumer/Financial Healthcare

TROW – Down 2% - AUM continues to leak out at $16.1B in equities this quarter.

MasterCard – Key October trends are stronger than September. American spending has never been the problem.

PYPL – Down a hair on a valuation downgrade at Phillip.

MBUU – Malibu boats downgraded at DA Davidson as their upgrade catalysts have played out in a higher stock price.

EL was downgraded to neutral from overweight at JPMorgan following the beauty company’s first-quarter results Thursday, where it withdrew its full-year guidance. Shares are little changed in premarket trading after yesterday’s record 21% drop.d +4%, COIN +2%

Technology

AAPL: -1% mixed Q4/Sept earnings (iPhone beat; iPad/Services/Wearables missed). China missed slightly at $15B (Est $15.8B); iPhone beat at $46.2B (est $45B). Services miss at $25B (est $25.27B). EPS 5c ahead. Guide mixed (rev growth below; margins stronger)

AAPL addtl: iPhone 16 sales grew FASTER than iPhone 15 sales a year earlier and said customers are downloading the new iOS 18 with AI features at 2x the rate a year ago ... Q&A implied analysts think the outlook from Apple is conservative. Apple management wouldn’t be drawn on that but Tim Cook said “we have a lot of things on the docket and it's definitely the strongest lineup we've ever had going into the holiday season”

AMZN: +6% strong margins, AWS recovery (although AWS viewed underwhelming). OI beat across all 3 divisions - guide $20B (well ahead of buy side) - continue to invest big in GenAI as AWS and its intl retail business drive strong profits ... entering a profitability inflection point in story?? .... AWS AI a multi-billion dollar business growing triple-digit, 2)

AMZN capex/AI commentary (NVDA etc): $75B 2024 capex guide; to 'likely' spend more than that in 2025 -> increased bumps from GenAI .... on call, noted AI is becoming a significant growth driver for AWS - AI biz is a multibillion-dollar rev run rate business that cont to grow at a triple-digit y/y % and is growing >3x faster at this stage of its evolution as AWS itself grew. NVDA: Hyperscalers cont to spend aggressively

AVGO: held 50D ystdry .. shrs hit post Ming-Chi Kuo saying AAPL would “rapidly reduce its reliance” on Broadcom Wi-Fi chips

MRVL: +3.6% from Jassy: the 2nd version of Trainium, Trainium2 is starting to ramp up in the next few weeks and will be very compelling for customers on price performance .. "customers have expressed a need for better price performance for their AI workloads, especially as they scale up"

SMCI shares fall as much as 5.5%, putting the stock on track to drop for a third consecutive day, since Ernst & Young resigned as the company’s auditor, citing concerns about governance and transparency

TEAM: +20% another strong SW print / big beat + raise; Cloud growth +31% good number vs rough expects ~28-30%

ASML: +50bps, TSM will receive its first next-gen EUV machine from ASML this quarter (Nikkei)

Industrials 

Boeing (BA) ticking up 2.3% - Boeing, International Association of Machinists and Aerospace Workers reach tentative agreement - IAM is planning to vote this proposal on Monday 4-Nov.

Boise Cascade (BCC) initiated buy at Loop Capital Markets

Huntington Ingalls (HII) Cut to Hold at TD Cowen

NIO (NIO) delivers 20,976 vehicles in October, +30.5% y/y.

XPeng (XPEV) delivers 23,917 vehicles in October, +20% y/y