Last week's earnings teasers have given way to a full-course feast of corporate results. Tesla and Coca-Cola are the anticipated highlights this week, while Apple and Microsoft will serve their surprises next week. According to FactSet, 14% of S&P 500 companies have reported Q3 2024 results, with 79% surpassing EPS estimates—outpacing the 5-year average of 77% and the 10-year average of 74%. Investors appear unfazed by last week's revelations.

Western markets continued their upward trajectory, with Wall Street hitting yet another record high. I've lost track of how many times this has happened—perhaps nearing the 50th instance since January 1. The S&P 500 is up 23% in 2024, more than double the Stoxx Europe 600's 9.6% gain. The macroeconomic scene is bustling. China's central bank (PBOC) cut its benchmark interest rates by 25 basis points, as expected.

The one-year LPR dropped from 3.35% to 3.1%, and the five-year LPR, a real estate loan benchmark, fell from 3.85% to 3.6%. Stock market reactions were muted, as this move was anticipated. It remains a key part of China's ongoing stimulus narrative.

In the US, the November 5 presidential election pendulum swings back toward Donald Trump. Bitcoin's rise is seen as a harbinger of his potential victory, with the former president's newfound crypto enthusiasm adding fuel. Bitcoin is the only asset class outperforming gold this year.

Trump's rising ratings have also bolstered the dollar, as financiers anticipate his policies could maintain high US interest rates due to their inflationary nature. Israel intensifies its offensive in Gaza and Lebanon following the death of a Hamas leader.

A drone attack on Prime Minister Benjamin Netanyahu's holiday home, which caused no casualties, has reignited speculation of an Israeli strike on Iran. Nuclear sector companies are the new darlings of investors, who recognize the massive energy needs for powering data centers and have noted Silicon Valley's recent nuclear power agreements.

From October 22 to 24, Vladimir Putin hosts a BRICS summit in Kazan, Russia, welcoming representatives from Brazil, India, China, and even UN Secretary-General Antonio Guterres. It's a significant week for Asian IPOs, with Tokyo Metro and Hyundai Motor India among the first to list.

This week's earnings agenda features around thirty mega-capitalizations, including GE Aerospace, Tesla, Coca-Cola, T-Mobile US, and IBM in the US, and SAP, L'Oréal, Roche, Hermès, Unilever, and Sanofi in Europe.

These headline acts will be joined by several hundred other companies. On the macro front, the week is quieter. The Bank of Canada's monetary policy decision is due Wednesday, followed by Thursday's closely watched PMI activity indicators for major economies, and concluding with US durable goods orders and University of Michigan consumer sentiment on Friday.

In the Asia-Pacific region, Japan and Taiwan remained flat, India declined 0.3%. Australia gained 0.7%, and South Korea ended 0.4% higher. In China, mainland indices were up, while Hong Kong's Hang Seng lost 1.5%. European indices are bearish, with the EURO STOXX 50 down 0.9%, and futures on Wall Street are also down, with the Nasdaq 100 down 0.5% and the Dow Jones and S&P 500 down 0.2%.

Today's economic highlights:

On the agenda today, the German Producer Price Index and the US Leading Indicator Index. The full agenda is here. 

The dollar is worth EUR 0.9211 and GBP 0.7680. The ounce of gold rose to USD 2,734. Oil remains low, with North Sea Brent at USD 74.17 a barrel and US light crude WTI at USD 70.20. The yield on 10-year US debt stands at 4.13%. Bitcoin is hovering around USD 68,230.

In corporate news:

  • Boeing is offering a 35% pay rise over four years to end the strike, but the pension issue remains under discussion.
  • Cigna has resumed merger talks with Humana, according to Bloomberg.
  • CVS Health is once again in turmoil on Wall Street following the dismissal of its CEO.
  • IBM releases new AI models for enterprises.
  • Starboard acquired a stake in consumer healthcare products maker Kenvue, according to Reuters.
  • Metlife is in talks to buy PineBridge's assets in China for $1-1.5 billion, according to Bloomberg.
  • Activist fund Elliott and Southwest Airlines will begin settlement discussions, according to Bloomberg.
  • AT&T ratifies agreement with striking CWA union.
  • Today's main publications: Nucor, Alexandria Real Estate, TFI International, Medpace...

Analyst recommendations:

  • Ally Financial Inc.: Raymond James upgrades to market perform from underperform.
  • Essex Property Trust, Inc.: Raymond James downgrades to market perform from outperform.
  • Extra Space Storage Inc.: Wells Fargo downgrades to equalweight from overweight with a target price of USD 175.
  • Mohawk Industries, Inc.: Baird upgrades to outperform from neutral with a price target raised from USD 160 to USD 196.
  • Old Dominion Freight Line, Inc.: Stifel downgrades to hold from buy and reduces the target price from USD 209 to USD 197.
  • Prologis, Inc.: Goldman Sachs downgrades to neutral from buy with a price target reduced from USD 142 to USD 132.
  • Saia, Inc.: Stifel downgrades to hold from buy and reduces the target price from USD 440 to USD 437.
  • United Parcel Service, Inc.: Barclays downgrades to underweight from equalweight with a target price of USD 120.
  • Comerica Incorporated: Citigroup remains neutral recommendation with a price target raised from USD 51 to USD 63.
  • E.l.f. Beauty, Inc.: Baird maintains its outperform rating and reduces the target price from USD 240 to USD 175.
  • IBM: Jefferies remains at hold with a price target raised from USD 200 to USD 245.
  • Mcdonald's Corporation: Wells Fargo maintains its overweight recommendation and raises the target price from USD 285 to USD 350.
  • Mohawk Industries, Inc.: Baird upgrades to outperform from neutral with a price target raised from USD 160 to USD 196.
  • Sharkninja, Inc.: Goldman Sachs maintains its buy recommendation and raises the target price from USD 102 to USD 123.
  • Snap Inc.: Morgan Stanley maintains its market weight recommendation and reduces the target price from 16 to USD 10.
  • The Ensign Group, Inc.: RBC Capital maintains its outperform rating and raises the target price from USD 133 to USD 167.
  • The Travelers Companies, Inc.: Roth Capital maintains its buy recommendation and raises the target price from USD 240 to USD 300.
  • Intertek Group Plc: RBC Capital downgrades to sector perform from outperform with a target price reduced from GBX 5200 to GBX 5000.
  • M&G Plc: Barclays upgrades to equalweight from underweight with a target price raised from GBP 2.20 to GBP 2.30.
  • Wizz Air Holdings Plc: Goodbody downgrades to hold from buy with a price target reduced from GBP 19.35 to GBP 13.10.