S&P futures are down 0.1% in Tuesday morning trading, following a positive Monday session where around 70% of the S&P 500 advanced. Small caps, crowded shorts, non-profitable tech, regional banks, and industrial metals were strong performers, while energy lagged on weaker oil. Treasuries continued to weaken, with yields climbing. Dollar index flat, Gold up 0.3%, Bitcoin futures up 2.3%, and WTI crude up 1%.
Market remains in wait-and-see mode with several catalysts on the horizon: peak Q3 earnings (including 5 of the “Mag 7” names), the October employment report expected to be affected by strikes/weather, the US election next Tuesday, and the FOMC meeting next Thursday. Yield backup is under scrutiny due to recent deficit concerns, but some firms argue stocks can continue upward given the soft-/no-landing narrative, unwinding of election hedges, favorable seasonality, buyback resumption, and 2025 earnings focus.
Economic data today includes August home prices (FHFA and S&P Case-Shiller), September JOLTS, and October Conference Board consumer confidence. Treasury to auction $44B in 7-year notes after softer auctions Monday. The rest of the week is busy with ADP payrolls, Q3 GDP Wednesday; PCE inflation, ECI, and Chicago PMI Thursday; and employment report, ISM manufacturing Friday.
Corporate Highlights:
- Cadence Design (CDNS): Positive on Q4 bookings.
- Ford (F): Guided FY EBIT to low end of prior range.
- F5 Networks (FFIV): Beat estimates with strength in software.
- Crane (CR): Beat and raised, citing strong demand trends.
- Trex (TREX): Beat and raised FY EBITDA margin guidance.
- Amkor Technology (AMKR): Soft guidance, citing smartphone demand weakness.
- Flowserve (FLS): Highlighted bookings strength.
- V.F. Corp (VFC): Up on fiscal Q2 beat, sequential improvement, and guidance resumption.
- Boot Barn (BOOT): Beat and raised but announced CEO departure.
- TransMedics (TMDX): Down on Q3 miss.
- Ross Stores (ROST): Named new CEO.
US equities closed higher on Monday in a relatively quiet, range-bound session. The Dow rose 0.65%, S&P 500 added 0.27%, Nasdaq was up 0.26%, and Russell 2000 surged 1.63%. Small caps led gains alongside sectors like airlines, autos, banks, homebuilders, steel, building products, apparel, machinery, and insurance. Big tech was mixed, while energy lagged sharply due to a 6.1% drop in WTI crude, its biggest decline since July, following de-escalation of Middle East tensions. Treasuries were weaker across the curve, with yields continuing to back up on soft-/no-landing sentiment, election uncertainties, and fiscal concerns. Treasury borrowing estimates for Q4 were revised down by $19B to $546B.
The market remained steady as investors await multiple catalysts, including big tech earnings, the October payroll report, election outcomes, and the upcoming FOMC meeting. Economic data this week includes JOLTS job openings, Conference Board consumer confidence, Q3 GDP, and PCE inflation. The October NFP is expected to show a ~130K gain, with potential distortions from the Boeing strike and hurricane impacts. No Fed speakers are scheduled due to the blackout period before the FOMC meeting.
Company Performance by GICS Sector
Health Care
- PROCEPT BioRobotics (PRCT) +32.3%: Strong Q3 revenue and earnings, attributed to increased system sales, higher ASPs, and stronger consumable sales. FY guidance raised.
- Vera Therapeutics (VERA) +15.2%: Positive phase 2B trial results for atacicept in immunoglobulin A nephropathy, with stabilized kidney function and a strong safety profile, bolstering confidence ahead of Q2’25 phase 3 data.
Information Technology
- Nutanix (NTNX) +4.1%: Upgraded to overweight by Morgan Stanley, citing competitive positioning against VMware and a boost from the Dell partnership.
- ON Semiconductor (ON) +1.4%: Beat Q3 earnings and revenue expectations, noting continued demand in power solutions for key markets; guidance brackets consensus.
Industrials
- Boeing (BA) -2.8%: Announced plans to raise ~$19B through the sale of 90M shares and additional securities convertible to preferred shares, following an earlier statement on plans to raise up to $25B in new capital and a $10B credit facility agreement.
- Sunrun (RUN): Positive sentiment on comments suggesting the company could supply datacenter power, aligning with growing interest in renewable energy solutions for high-demand sectors.
Consumer Discretionary
- Alaska Air Group (ALK) +3.4%: Upgraded to buy by Melius Research due to favorable competitive dynamics and capacity adjustments by peers in Alaska’s West Coast markets.
Communication Services
- Google (GOOGL): Reportedly developing an AI tool to manage users’ web browsers autonomously, indicating potential for advanced browser features and user support applications.
Financials
- Capital One (COF): Benefitted from sector momentum in credit cards, with sentiment bolstered by recent positive earnings.
Energy
- EQT Corp (EQT): In talks to sell stakes in its interstate pipeline assets to Blackstone (BX) for an estimated $3.5B, aligning with broader energy divestment trends.
Eco Data Releases | Tuesday October 29th, 2024
S&P 500 Constituent Earnings Announcements | Tuesday October 29th, 2024
Data sourced from FactSet Research Systems Inc.
