Yesterday, Tesla closed up an impressive 22%, as if it were set to capture half of the global car market, effortlessly outpacing Chinese rivals and consumer hesitations about electric cars. While the automaker has certainly shown improved performance, the surge rests entirely on Elon Musk’s rosy growth predictions for next year—despite Musk’s own admission that he has a tendency to be overly optimistic. Nonetheless, analysts remain captivated by his words, as shown by the buzz around his latest conference, which I suggest checking out here. Musk, ever the showman, kept things lively with memorable punchlines, like this one: “To my knowledge, no electric vehicle company is profitable worldwide, nor is any EV division of existing car manufacturers. So, it’s remarkable that Tesla is profitable despite a tough automotive environment, and this quarter is actually a record for us.” Thus, the stock’s 22% leap came with the promise of “20 to 30% growth in vehicle sales next year.” Tesla’s surge nearly lifted the broader markets, but ultimately fell short.

In the U.S., Tesla helped the S&P 500 post its first gain of the week, albeit modest at +0.21%. The Nasdaq 100 fared better, gaining 0.83%. Meanwhile, the Dow Jones recorded its fourth consecutive decline, weighed down by disappointing results from Honeywell (-5%) and IBM (-6%). The next key market events are earnings reports from five of the "Magnificent 7" tech giants between Tuesday, October 29, and Thursday, October 31: Alphabet on Tuesday, followed by Microsoft and Meta on Wednesday, and Apple and Amazon on Thursday. Then, there's the U.S. presidential election on November 5. The Fed's rate decision is scheduled for November 7, with 95% of the market expecting a 25-basis-point cut, while 5% anticipate no change. Yesterday’s U.S. economic stats were all better than expected.

In Europe, markets narrowly avoided closing in the red, with the CAC40 clinging to a slim 0.08% gain after earlier reaching nearly 1%. Confusion between Kering, LVMH, and Hermès helped lift spirits, thanks to Hermès’ upbeat earnings that acted as a defibrillator for its competitors.

On the macro front, the dollar took a breather after its recent rally, driven by Donald Trump’s rising poll numbers. This allowed the yen to recover slightly, despite the Bank of Japan's governor ruling out a rate hike next week. The elections this weekend could see the ruling coalition lose its lower-house majority. In other news, rumors of Middle East peace talks helped ease oil prices. In Europe, opinions are divided over the ECB's upcoming December decision: Northern hawks see a half-point cut as too aggressive, Southern doves welcome it, while the rest fall somewhere in between.

In the Asia-Pacific region, the Nikkei 225's 0.9% decline this morning spells the end of a positive week for the Japanese market. China, on the other hand, continues to rebound, after several sessions of consolidation following the bullish explosion of the indices since the beginning of September. South Korea, Taiwan and Australia gained slightly in the final session of the week. India, on the other hand, lost 0.6%. European leading indicators are bearish.

Economic highlights:

In the US, day has started with durable goods orders at (8:30 a.m.), before University of Michigan sentiment (10:00 a.m.). Full agenda here.

In corporate news:

  • Apple - The tech giant drops 1.2% pre-market as investors worry about declining smartphone sales in China in Q3.
  • Capri Holdings - The luxury group, owner of Michael Kors and Versace, falls 46% pre-market after the Federal Trade Commission blocked its $8.5 billion merger with Tapestry due to competition concerns. Tapestry shares rise 13.6% pre-market.
  • Centene Corp - The health insurer rises 12.3% pre-market, with its quarterly earnings exceeding Wall Street estimates.
  • Deckers Outdoor - The shoe manufacturer rises 14.1% pre-market after raising annual sales forecasts and beating Q2 expectations, driven by brands like Hoka and New Balance.
  • Dexcom - The medical device maker drops 5.1% pre-market despite higher-than-expected Q3 revenue.
  • HCA Healthcare - The largest for-profit hospital operator in the U.S. drops 10% pre-market, with quarterly earnings impacted by Hurricane Helena's effects on some facilities.
  • Microsoft - The Windows maker’s CEO, Satya Nadella, saw his compensation jump 63% in 2024 to $79.1 million, according to a filing on Thursday.
  • Morgan Stanley - The American bank announced Thursday after the session that its CEO, Ted Pick, will become group president on January 1, 2025, replacing James Gorman, who will chair Walt Disney's board.
  • Spirit Airlines - The airline gains 13.2% pre-market after identifying $80 million in annual cost reductions it plans to implement in 2025.
  • Tesla - The automaker drops 2.2% pre-market after a 21.9% jump on Thursday, following surprisingly strong quarterly results.
  • Western Digital - The hard drive specialist rises 10.6% pre-market after surpassing analyst expectations in Q1, driven by the AI boom.

Analyst recommendations:

  • Autozone: Citigroup maintains its buy recommendation with a price target reduced from USD 3787 to USD 3500.
  • Bank Ozk: Piper Sandler & Co maintains its overweight recommendation and reduces the target price from 60 to USD 58.
  • Beazley: Deutsche Bank maintains its buy recommendation and raises the target price from GBX 873 to GBX 977.
  • Centrica: AlphaValue/Baader Europe downgrades to add from buy with a price target reduced from GBX 152 to GBX 150.
  • Comerica Incorporated: Piper Sandler & Co maintains a neutral recommendation with a price target raised from USD 58 to USD 61.
  • Csx Corporation: Barclays maintains its overweight recommendation and reduces the target price from 41 to USD 40.
  • Duolingo: JP Morgan maintains its overweight rating and raises the target price from USD 255 to USD 303.
  • First Citizens Bancshares: Piper Sandler & Co maintains a neutral recommendation with a price target reduced from USD 2150 to USD 2000.
  • Global Payments: B Riley Securities Inc. maintains its buy recommendation and reduces the target price from USD 204 to USD 194.
  • Intel Corporation: President Capital Management Corp maintains a neutral recommendation with a price target reduced from USD 47 to USD 26.
  • Monday.com: Loop Capital Markets maintains its buy recommendation and raises the target price from USD 285 to USD 310.
  • Mondelez International: BNP Paribas Exane maintains its outperform recommendation and raises the target price from USD 78 to USD 83.
  • Ppg Industries: Redburn Atlantic resumes coverage with a neutral rating and a reduced target price from USD 160 to USD 150.
  • Smiths Group: BNP Paribas Exane maintains its neutral recommendation with a price target reduced from 1770 to GBX 1725.
  • The Hershey Company: BNP Paribas Exane maintains its neutral recommendation with a price target reduced from 203 to USD 197.
  • The Sherwin-Williams Company: Redburn Atlantic maintains its buy recommendation and raises the target price from USD 375 to USD 400.
  • Vail Resorts: Morgan Stanley maintains its market weight recommendation and raises the target price from USD 179 to USD 182.
  • Weatherford International: Citigroup maintains its buy recommendation with a price target reduced from USD 155 to USD 130.