Wall Street began the day with the enthusiasm of a cat facing a bath. Dow Jones futures slipped by 0.4%, S&P 500 futures edged down 0.1%, while Nasdaq futures remained unchanged. Investors are in suspense, awaiting earnings revelations from tech titans like Alphabet, Visa, and AMD. Alphabet is the star of the show, with everyone eager to see if it can outmaneuver AI competitors like ChatGPT.

Oil prices are climbing, while new data reveals the US trade in goods deficit widened to $108.23 billion in September, exceeding Bloomberg's forecast of $96 billion.

In the political arena, Trump Media, bookmakers, bitcoin, polls and cristal balls all hint that the Donald Trump/Elon Musk team is ahead in the race for the White House. While JD Vance is Trump's official running mate, Elon Musk has been his right-hand man lately. Trump, speaking in Atlanta, promised, "I will find a job for Elon Musk if I win." Financial experts speculate that a Republican win might boost equities in the short term but worry it could disrupt plans for the US central bank to cut rates. Historically, post-election periods are favorable for equities, regardless of the winning party. Interestingly, Democratic administrations have statistically been more beneficial for the S&P 500 than Republican ones, despite Republicans facing more crises.

Debate will continue about the election's impact on assets, given the market's perception of unprecedented polarization between the parties. The likely scenario is a return to Wall Street's 'business as usual' approach, albeit with some volatility.

Yesterday, equity markets advanced, though the Nasdaq remained static, missing a chance to break its July record. US indices were hit by falling oil prices but buoyed by a strong financial sector, with the S&P 500 rising 0.3% and the Dow Jones 0.65%. Neither index has reclaimed its October 18 peak, as earnings season has been underwhelming. Companies are beating forecasts, but the margin is slimmer than usual, with earnings overruns at their lowest in nearly two years. In Europe, markets started the week with gains, particularly those rich in financial stocks.

Today's earnings reports promise surprises, AMD and Super Micro Computer will also feature, alongside stalwarts like Novartis, McDonald's, Pfizer, and Saint-Gobain. On the macro front, the Biden administration has finalized restrictions on US investments in China's cutting-edge technologies, including semiconductors, AI, and quantum computing, much to Beijing's displeasure.

In the Asia-Pacific region, Japan (+0.7%), Hong Kong (+0.4%), India (+0.5%), and Australia (+0.3%) are up, though the picture is mixed elsewhere. Taiwan fell by 1.1%, Bombay by 0.4%, and Shanghai by 1%. European indices are bearish, with the STOXX Europe 600 down 0.2%.

Economic highlights:

Wholesale inventories, the FHFA house price index, consumer confidence from the Conference Board and JOLTS job offers are on the calendar today. 

The dollar is up to EUR 0.9275 and GBP 0.7706. The ounce of gold rose to USD 2,756. Oil regained some ground, with North Sea Brent at USD 71.38 a barrel and US light crude WTI at USD 67.67. The yield on 10-year US debt rose to 4.32%. Bitcoin is just over USD 71,000.

In corporate news:

  • McDonald's reported pre-bell Q3 adjusted earnings and revenue that exceeded analysts' expectations.
  • Pfizer raised its full-year 2024 guidance, now expecting adjusted earnings per share (EPS) between $2.75 and $2.95 and revenues between $61 and $64 billion, driven by strong vaccine sales and its oncology division.
  • PayPal announced better-than-expected earnings and raised its EPS forecast, but its revenues fell short of consensus.
  • Ford lowered its adjusted EBIT forecast for 2024.
  • Royal Caribbean exceeded Q3 expectations and raised its full-year profit forecast, benefiting from increased prices and bookings.
  • DR Horton saw a significant drop in its stock due to lower-than-expected earnings and cautious buyer sentiment amid high interest rates.
  • VF Corp, owner of brands like Vans and North Face, reported better-than-expected earnings, with its stock rising 18%.
  • CVR Energy and TransMedics Group both reported disappointing earnings, resulting in significant stock declines. 
  • Boeing launched a capital increase at USD 143 per share, a slight discount to the previous day's price of USD 150.69.
  • Apple rolls out its generative AI on its devices.
  • A Brazilian institute sues the social media giants, in particular Meta, for $525 million for excessive use by minors.
  • Estee Lauder appoints insider Stéphane de La Faverie as CEO, according to the WSJ.
  • FactSet Research Systems acquires investor relations management platform Irwin.
  • AbbVie acquired Aliada Therapeutics for $1.4 billion to strengthen its neuroscience portfolio.

Today's main earnings reports: Alphabet, Visa, AMD, McDonald's, Pfizer, Stryker, Chubb, American Tower Corporation, Mondelez, PayPal, Chipotle Mexican Grill, Ecolab, DR Horton, Phillips 66, Super Micro Computer, Electronic Arts...

Analyst recommendations:

  • 3M Company: Baptista Research upgrades to outperform from hold with a price target raised from USD 136.90 to USD 144.50.
  • First Solar, Inc.: Janney Montgomery Scott upgrades to buy from neutral with a target price of USD 260.
  • General Motors Company: Baptista Research downgrades to hold from outperform with a price target raised from USD 54 to USD 57.40.
  • Tapestry, Inc.: TD Cowen downgrades to hold from buy with a target price of USD 52.
  • Amkor Technology, Inc.: Needham maintains its buy recommendation and reduces the target price from USD 45 to USD 34. 
  • Cava Group, Inc.: Citigroup remains neutral recommendation with a price target raised from USD 115 to USD 140.
  • Exact Sciences Corporation: Canaccord Genuity maintains its buy recommendation and raises the target price from USD 75 to USD 95.
  • F5, Inc.: Piper Sandler & Co maintains a neutral recommendation with a price target raised from 186 to USD 246.
  • Ibm: Baptista Research upgrades to hold from underperform with a price target raised from USD 183.20 to USD 235.
  • Klaviyo, Inc.: TD Cowen maintains its buy recommendation and raises the target price from USD 35 to USD 45.
  • Pinnacle West Capital Corporation: Mizuho Securities maintains its outperform recommendation and raises the target price from USD 75 to USD 98.
  • Robinhood Markets, Inc.: Mizuho Securities maintains its outperform rating and raises the target price from USD 24 to USD 29.
  • Targa Resources Corp.: Seaport Global maintains its buy recommendation and raises the target price from USD 141 to USD 174.
  • V.f. Corporation: BNP Paribas Exane maintains a neutral recommendation with a price target raised from 17 to USD 21.
  • Northumbrian Water: AlphaValue/Baader Europe downgrades to reduce from add with a target price of GBX 389.
  • Moonpig Group Plc: HSBC maintains its buy recommendation with a price target raised from 2.40 to GBP 3.30.
  • Brookfield Asset Management Ltd.: TD Cowen maintains its buy recommendation and raises the target price from USD 50 to USD 61.