EB Daily Market Report - Wednesday, October 30, 2024

Tom Bowley - October 30, 2024

Executive Market Summary

Futures were lower overnight and we gapped down at the opening bell
We saw improvement in our indices, especially small caps, early in the trading session, but more weakness followed in the afternoon
Commodities were mostly higher, especially the 2.51% jump in crude oil ($WTIC) to nearly $69 per barrel
The 10-year treasury yield ($TNX) began the day dropping about 7 basis points, but finished near the unchanged level
Sectors were bifurcated with 5 higher and 6 lower; Alphabet's (GOOGL, +3.81) earnings gave both internet ($DJUSNS, +1.51%) and communication services (XLC, +0.65%) a lift
Technology (XLK, -1.50%), yesterday's winner, was easily today's loser; semiconductors ($DJUSSC, -2.06%) were a primary contributor to the weakness
Q3 GDP was released and it came up a bit short of expectations; meanwhile, the ADP employment report was hotter than expected - all eyes will be on the Friday nonfarm payrolls report
Garmin Ltd (GRMN, +23.14%) led all S&P 500 stocks after posting excellent quarterly results

Market Outlook

Bitcoin ($BTCUSD) challenged its all-time high near 74000 on Tuesday and, thus far, is being turned away at that key price resistance level:

The red arrows mark the key price resistance, while the green arrow highlights the rising 20-day EMA. The two lower panels are interesting too, as bitcoin clearly is outperforming etherium ($ETHUSD). After months of underperforming the S&P 500, bitcoin has finally broken its relative downtrend channel and is now outperforming the S&P 500.

Sector/Industry Focus

Two huge earnings reports will be released after the bell, one in software (MSFT) and the other in internet (META). META has been a clear relative strength winner, while the same cannot be said about MSFT:

MSFT:

META:

Both stocks remain in uptrends, but their relative strength varies considerably. We'll find out in the next few minutes whether relative strength/weakness leads to higher/lower price. I'd say Wall Street has favored META a bit more than MSFT, but both stocks are in industries that have been underperforming the S&P 500, though internet ($DJUSNS) did get a nice relative boost today from Alphabet's (GOOGL, +3.81%) reaction to its earnings report released on Tuesday afternoon.

ChartLists/Strategies

It was nice to see a couple gaps higher from two of our portfolio stocks, though a third (CMG, -7.85%) didn't give us the trifecta:

GRMN:

Both the AD line and relative strength remained fairly strong and we now see the quarterly results and GRMN's price reaction. I love stocks that gap up above key candle body resistance after reporting solid results. I believe it's a sign of more strength to come.

EXEL:

This chart setup looks quite similar, with a strong AD line and improving relative strength.

Earnings Reports

Here are the key earnings reports for the next two days. I include all companies with market caps of $10 billion or more and also include notable companies with market caps below $10 billion. Finally, any portfolio stocks that will be reporting results are highlighted in BOLD. If you decide to hold a stock into earnings, please understand the significant short-term risk that you are taking. Please be sure to check for earnings dates for any companies that you own or are considering owning.

Wednesday, October 30 - after market close (AMC):

MSFT, META, AMGN, BKNG, SBUX, KLAC, EQIX, AFL, DASH, MET, PSA, COIN, ALL, PRU, AEM, MPWR, CVNA, ACGL, MSTR, CTSH, EBAY, EQR, AWK, VTR, HOOD, GDDY, INVH, CLX, LPLA, MAA, RYAN, GEN, EG, CF, UDR, FTAI, CW, CHRW, MGM, SFM, HLI, TWLO, FND, ROKU, COKE, SCI, OHI, PPC, OLED, PCTY, MUSA, PAYC, FRT, BIO, AUR, PCOR, ALTR, AR INFA, PEN, SPXC, AM, WSC, CFLT, SUM, AXS, CGNX, WTS, CWST, KRG, BECN, ETSY, MMSI, THG, MGY, TENB, ACHC, WHD, NXT, COLM, ACA, MATX, IRT, KMPR, AEIS, ALKT, AX, RIG, EPR, BNL, FORM, GRBK, CRK, HTGC, NSA, NVST, HCC, RIOT, BHC, RELY, PSMT, COMP, FCPT, HUBG, HWKN, RSI, IRTC, AIN, TRUP, MCW, GLPG, MYRG, CNMD, CMPR, TTMI, SIMO, CNX, TNK, TDOC, VRE, CODI, BHE, NVEE, STAA, LMND, MAX, DAWN, NMFC, ARI, EIG, ALGT, PGRE, IMAX, JBSS, PLSE, ERII

Thursday, October 31 - before market open (BMO):

MA, MRK, LIN, SHEL, UBER, CMCSA, TTE, ETN, COP, BMY, REGN, SO, ICE, CI, MO, PH, CNQ, ING, GWW, PWR, TAK, KVUE, IQV, LNG, STLA, AME, ALNY, IDXX, XEL, OWL, XYL, EL, WEC, CVE, WTW, ETR, K, LI, STM, RBLX, ASX, CMS, EME, BALL, APTV, IP, KIM, H, SN, INSM, TFX, LECO, MBLY, NCLH, SIRI, HII, GNRC, APG, OTEX, WCC, DINO, CFR, BWA, MIDD, GIL, ARW, NSIT, JHG, LAZ, LNC, IDA, VNT, FSS, DNB, LANC, BDC, ITRI, BGC, OGN, MDGL, AVNT, KTB, ALGM, PBF, WEN, IDCC, VAL, GVA, CNK, NSP, BTU, PATK, CWT, KYMR, TRN, AGIO, LAUR, UTZ, DRVN, SWI, PTON, PHIN, DFIN, CIFR, GEL, UPBD, SABR, UNIT, FDP, TVTX, CRAI, MGPI

Economic Reports

October ADP employment report: 233,000 (actual) vs. 115,000 (estimate)

Q3 GDP (initial estimate): 2.8% (actual) vs. 3.0% (estimate)

Q3 PCE - annual rate: 3.7% (actual) vs. 3.0% (estimate)

September pending home sales: +7.4% (actual) vs. +1.0% (estimate)

Happy trading!

Tom