Traders Market Weekly: US Elections, Rates and Inflation

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    Hope everyone having a great weekend. I see so much going on this week. Bull market or bear trap – great question 🙂

    We have FOMC, Starbucks, BP QCOM. UBER and Pfizer earnings, Boeing and AMD events for starters and we end with jobs on Friday.

    Here we go:

    • This reply was modified 1 month, 1 week ago by Truman.

    Monday – October 31

    All day – The two-day Gabelli 46th Annual Automotive Aftermarket Symposium begins on October 31 with a lineup promised to run the cradle-to-grave life cycle within the automotive ecosystem. Some of the more interesting presenters on watch for potential share price jolts include Wallbox NV (WBX), Dana Inc. (DAN), AutoNation (AN) and

    8:00 a.m. Wolfspeed (WOLF) will host an Investor Day event. Wolfspeed’s executive leadership team will provide an update on the business and the company’s long-term outlook. Shares of Wolfspeed tumbled last year after the same event.

    8:30 a.m. Criteo (CRTO) will hold its rescheduled Investor Day. The company said it will provide an update on its mid-term financial outlook and make the Criteo’s executive leadership team available for a question-and-answer session.


    Tuesday – November 1

    All day – Watch Chinese automakers Nio (NIO), Li Auto (LI), and XPeng (XPEV) with updates on September deliveries due in. The Chinese EV stocks have seen large share price swings the last few times the deliveries reports hit.

    All day – The three-day LA Blockchain Summit begins with the cryptocurrency world looking for a spark. Notable speakers include MicroStrategy’s (MSTR) Michael Saylor, SkyBridge Partners Anthony Scaramucci and Apple co-founder Steve Wozniak.

    M&A watch – The walk date for Dupont’s (DD) purchase of Rogers (ROG) hits. While the deal is likely go past the closing deadline with Chinese approval still needed, Dupont and Rogers are said to remain committed to the transaction. Shareholders with Turquoise Hill Resources (TRQ) vote on the Rio tinto buyout.

    8:30 a.m. Blueprint Medicines Corporation (BPMC) will host an Investor Day for analysts and investors with presentations from top exec and a panel discussion with key opinion leaders in the fields of mastocytosis, allergy and immunology.

    9:00 a.m. Ocugen (OCGN) will host an in-person Research & Development Day.


    Wednesday – November 2

    12:30 p.m. SpartanNash (SPTN) will host its Investor Day. The SpartanNash executive team will present more details about the company’s Winning Recipe initiative and long-term financial targets.

    10:30 a.m. Boeing Company (BA) will hold a key investor conference by webcast. Senior management team will discuss strategic priorities, business updates, and financial objectives.

    2:00 p.m. The FOMC will release its statement on interest rate and monetary policy. The Fed’s policy-making committee is anticipated to raise rates by 75 basis points.

    2:30 p.m. Federal Reserve Chairman Jerome Powell will hold a highly-anticipated press conference.


    Thursday – November 3

    10:00 a.m. The National Retail Federation will hold a media call to release its forecast for 2022 holiday retail sales. The NRF forecast will be another key data point for investors sizing up Target (TGT), Best Buy (BBY), Dick’s Sporting Goods (DKS), and Walmart (WMT) following the Amazon (AMZN) guidance shocker.

    1:30 p.m. Twilio Inc. (TWLO) will hold a virtual Investor Day to follow its Q3 earnings release.

    4:00 p.m. AMD (AMD) will hold a livestream event with the tagline “together we advancegaming.” The chipmaker plans to unveil the next generation of AMD Radeon graphics and provide details on the new high-performance, energy-efficient AMD RDNA 3 architecture.


    Friday – November 4

    All day – Shareholders with VMWare (VMW) meet to vote on the Broadcom (AVGO) deal.

    8:30 a.m. The jobs report for October will be released. It will be one of the last major economic reports before the U.S. midterm election.


    Barron’s mentions:

    Visa (V) attracted a bullish recommendation from the publication this week with shares down sharply amid the broad market sell-off this year. Visa has fallen all the way back to where shares were in January of 2020 before supercharged growth in digital payments drove the stock higher during the pandemic. On the plus side, Visa is noted to have impressive free cash flow, no net debt, and continues to be a double-digit sales and earnings compounder. The kicker is that on a valuation basis – Visa looks cheaper than it has been in years. While concerns about a possible recession have cut into sentiment, Barron’s reminded that history shows that Visa continued to grow even through the financial crisis of 2008-2009.

    The cover story this week called out the potential upside for small cap stocks in a market that is as choppy as it has been in years.

    Small-cap companies were noted to be mainly domestic, which has helped them avoid much of the effects of the U.S. dollar’s 17% surge against other currencies. Even more important, multinationals are observed to be in an onshoring trend with supply chains in what could end up being a major tailwind for small-cap companies.

    Stocks from small cap universe mentioned as looking attractive were Veritex Holdings (VBTX), Advanced Energy Industries (NASDAQ:AEIS), Patterson-UTI Energy (PTEN), ChampionX (CHX), AAR Corp, (AIR), KAR Auction Services (NYSE:KAR), Flowserve (NYSE:FLS).


    Equity indices in the Asia-Pacific region began the week on a mostly higher note.

    —Equity Markets—

    Japan’s Nikkei: +1.8%
    Hong Kong’s Hang Seng: -1.2%
    China’s Shanghai Composite: -0.8%
    India’s Sensex: +1.3%
    South Korea’s Kospi: +1.1%
    Australia’s ASX All Ordinaries: +1.2%


    The Bank of Japan announced that bond purchases in November will include a higher frequency of purchases of longer-term JGBs.
    South Korea will reportedly encourage Korea Electric Power and other companies to sell offshore debt.
    China’s Manufacturing PMI for October fell to its lowest level since July.
    China is reportedly maintaining its plan to loosen coronavirus restrictions to enter Macau despite the recent increase in coronavirus cases.
    China’s October Manufacturing PMI 49.2 (expected 50.0; last 50.1) and Non-Manufacturing PMI 48.7 (expected 50.2; last 50.6)
    Japan’s September Industrial Production -1.6% m/m (expected -1.0%; last 3.4%) and September Retail Sales 4.5% yr/yr (expected 4.1%; last 4.1%). September Housing Starts 1.0% yr/yr (expected 2.3%; last 4.6%) and September Construction Order 36.6% yr/yr (last 17.9%). October Household Confidence 29.9 (expected 31.0; last 30.8)
    South Korea’s September Industrial Production -1.8% m/m (expected -0.3%; last -1.4%); 0.8% yr/yr (expected 0.9%; last 1.5%). September Retail Sales -1.8% m/m (last 4.4%)
    Australia’s September Retail Sales 0.6% m/m, as expected (last 0.6%). September Private Sector Credit 0.7% m/m, as expected (last 0.8%). October MI Inflation Gauge 0.4% m/m (last 0.5%)
    Hong Kong’s Q3 GDP -2.6% qtr/qtr (last 1.0%); -4.5% yr/yr (last -1.3%)
    Singapore’s Q3 Business Expectations -20.0 (last -8.0)


    Major European indices trade near their flat lines.

    —Equity Markets—

    STOXX Europe 600: UNCH
    Germany’s DAX: +0.2%
    U.K.’s FTSE 100: +0.2%
    France’s CAC 40: -0.3%
    Italy’s FTSE MIB: +0.3%
    Spain’s IBEX 35: UNCH


    British Prime Minister Sunak is reportedly planning to freeze foreign aid for a couple years to help plug the budget hole.
    The British government refuted reports that a plan is being prepared for a one-time windfall tax on banks.
    Russia withdrew its participation from the UN-established grain shipping deal in the Black Sea. There is speculation that International Consolidated Airlines is interested in acquiring EasyJet.
    Eurozone’s flash Q3 GDP 0.2% qtr/qtr (expected 1.0%; last 0.8%); 2.1% yr/yr (last 4.3%). October CPI 1.5% m/m (last 1.2%); 10.7% yr/yr (expected 10.2%; last 9.9%). October Core CPI 5.0% m/m (last 4.8%); 5.0% yr/yr (expected 4.8%; last 4.8%)
    Germany’s September Retail Sales 0.9% m/m (expected -0.3%; last -1.4%); -0.9% yr/yr (expected -4.9%; last -1.5%)
    U.K.’s September Mortgage Approvals 66,790 (expected 67,000; last 74,420) and BoE Consumer Credit GBP745 mln (expected GBP978 mln; last GBP1.215 bln)
    Italy’s Q3 GDP 0.5% qtr/qtr (expected 0.3%; last 1.1%); 2.6% yr/yr (expected 2.0%; last 4.7%)
    Spain’s September Retail Sales 0.1% yr/yr (last 0.1%). August Current Account deficit EUR110 mln (last surplus of EUR1.34 bln)
    Swiss September Retail Sales 3.2% yr/yr (expected 3.5%; last 2.1%)


    Apple (AAPL 154.77 -0.97 -0.62%): Foxconn (HNHPF) iPhone production could fall 30% at key factory due to coronavirus outbreak, according to Reuters.
    Tesla (TSLA 227.65 -0.87 -0.38%): Tesla (TSLA) had talks last year about taking stake in Glencore (GLNCY), according to FT.
    Credit Suisse (CS 4.0600 +0.13 +3.31%): Credit Suisse (CS) looking towards twenty banks for capital increase, according to Bloomberg.
    Caterpillar (CAT 217.01 -2.33 -1.06%): UBS downgraded from Neutral to Buy
    Emerson (EMR 87.48 +0.08 +0.09%): beats by $0.14, reports revs in-line; guides Q1 revs above consensus; guides FY23 revs above consensus; confirms it will sell majority stake in Climate Technologies to Blackstone (BX) in transaction valuing the business at $14.0 billion
    Howmet Aerospace (HWM 34.06 -2.11 -5.83%): reports EPS in-line, revs in-line; guides Q4 EPS in-line, revs below consensus
    Global Payments (GPN 120.00 -5.31 -4.24%): reports EPS in-line, beats on revs; reaffirms FY22 EPS guidance


    Energy complex futures are mixed this morning.

    WTI crude oil futures are down 2.1% to $86.10/bbl
    Natural gas futures are up 9.00% to $6.49/mmbtu.


    S&P futures vs fair value: -20.50. Nasdaq futures vs fair value: -77.80.

    The S&P 500 futures are down 20 points and are trading 0.4% below fair value.
    The Nasdaq 100 futures are down 77 points and are trading 0.6% below fair value.
    The Dow Jones Industrial Average futures are down 146 points and are trading 0.4% below fair value.


    Hurricane LISA expected to form in coming days & impact central MEXICO

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