S&P futures are higher Friday morning after a mixed-to-higher close on Thursday, where the S&P 500 snapped its three-day losing streak. Tesla (TSLA) led gains on strong earnings, while software, logistics, managed care, homebuilders, and hotels outperformed. Laggards included rails, hospitals, precious metals, and ride share. Overnight, Asian markets were mixed with Greater China up, while Japan and India lagged. European markets are narrowly mixed. Treasuries remain little changed, though yields are up for the week, while gold is down 0.6%, Bitcoin futures down 0.8%, and WTI crude up 0.4%.
The market heads into a quieter session today, with focus on upcoming Mag 7 earnings and busy macroeconomic data next week, including NFP on Friday and a Treasury refunding announcement that may affect rate sentiment. Election uncertainty and deficit concerns continue to weigh on risk sentiment, though some anticipate a post-election rally given favorable seasonality and resumed buybacks.
Today’s economic data includes durable goods orders for September and University of Michigan consumer sentiment updates.
Notable Earnings:
- Capital One (COF): Beat on better NII/NIM and provisions.
- Digital Realty (DLR): Reported record new lease bookings.
- L3Harris (LHX): Accelerated organic growth and record bookings.
- ResMed (RMD): Double-digit growth across regions and categories.
- Dexcom (DXCM): U.S. revenue was light.
- Deckers (DECK): Beat and raised guidance, driven by UGG and HOKA demand.
- Skechers (SKX): Beat and highlighted strong product lineup.
- Western Digital (WDC): Beat on strength in Cloud.
- Texas Roadhouse (TXRH): EPS light but showed traffic growth.
- Mohawk (MHK): Guided lower, citing macro headwinds.
- Olin (OLN): Pressured by EBITDA miss and softer guidance.
- Boyd Gaming (BYD): Beat with stable customer trends.
- Coursera (COUR): Declined on weaker guidance.
In other news, a court ruling blocked Tapestry (TPR) from acquiring Capri Holdings (CPRI).
Thursday Recap
US equities were mostly higher on Thursday, with the S&P 500 gaining 0.22%, its first rise in four sessions, and the Nasdaq up 0.76%. Outperformers included shipping/logistics, homebuilders, managed care, software, semicap equipment, and hotels. Treasuries firmed across the curve, helping ease rate concerns after a backup in yields on Wednesday. The Dollar Index fell 0.4%, while gold rose 0.7%, Bitcoin futures climbed 2.9%, and WTI crude fell 0.8%.
Earnings dominated headlines, with mixed results and a higher bar for performance weighing on some sectors. Meanwhile, the soft-landing narrative continues to provide underlying support for the market, boosted by better-than-expected economic data, including stronger new home sales and an improving services sector.
Notable Stock Movements by GICS Sector
Information Technology
- ServiceNow (NOW) +5.4%: Q3 beat and raised guidance, with AI adoption and large-deal momentum highlighted.
- Lam Research (LRCX) +5.1%: Q1 results beat expectations and the company guided Q4 revenue higher, with confidence in outperforming wafer fab equipment growth in 2025+.
- IBM (IBM) -6.2%: Q3 revenue missed expectations, but EPS was better. Software performed well, but weakness in consulting and infrastructure was flagged.
- Enphase Energy (ENPH) -14.9%: Q3 earnings and revenue missed expectations due to demand weakness in Europe. The company guided Q4 revenue below expectations
Consumer Discretionary
- Tesla (TSLA) +21.9%: Strong Q3 earnings, with much better-than-expected gross margins. The company projects 20-30% delivery growth in 2025.
- ADT Inc (ADT) +17.6%: Revenue beat expectations, with strong customer retention and cash generation. FY EPS guidance raised.
- Mattel (MAT) +4.4%: Q3 EPS beat, gross margin improved due to supply chain efficiencies. The company reaffirmed FY24 guidance.
- Tractor Supply (TSCO) -6.1%: Q3 results were in line, but comps posted a surprise decline. Analysts flagged headwinds from smaller average tickets and continued weakness in big-ticket items.
Industrials
- UPS (UPS) +5.3%: Q3 EPS beat expectations, driven by better-than-expected revenue and margin performance in the US Domestic Package segment.
- Union Pacific (UNP) -4.4%: Q3 results missed across revenue, operating income, and EPS, with softer revenue guidance for Q4.
- Textron (TXT) -6.2%: Q3 earnings missed due to strike at Aviation and weaker Industrial results. FY24 EPS guidance was lowered.
Health Care
- Molina Healthcare (MOH) +17.7%: Q3 earnings and revenue beat expectations, with better-than-feared MLR miss. Membership growth and strong SG&A performance boosted sentiment.
- Viking Therapeutics (VKTX) +21.3%: Q3 earnings beat expectations, with strong R&D results. Analysts highlighted the excellent safety profile of its VK2735 franchise.
- ICON (ICLR) -21.0%: Q3 results missed due to headwinds from two large customers undergoing budget cuts, lower vaccine-related activity, and cautious biotech spending.
- West Pharmaceutical Services (WST) +15.4%: Q3 beat expectations and FY24 guidance was raised. The company also increased its dividend by 5%.
Financials
- Raymond James Financial (RJF) +7.3%: Q4 earnings beat driven by strong investment banking advisory activity and improved NII. The company showed growth in capital markets and private client group segments.
- KKR & Co. (KKR) +3.4%: Q3 adj. EPS beat expectations, with strong fundraising, asset deployment, and 18% AUM growth year over year.
Consumer Staples
- Keurig Dr Pepper (KDP) -4.8%: Q3 results came in slightly light, with net sales and GM missing expectations. The company announced an acquisition of GHOST in a $1B investment
Real Estate
- Las Vegas Sands (LVS) +2.8%: Q3 results showed slightly better-than-expected Macau performance. The company announced a $2B buyback and a 25% dividend increase for 2025
Eco Data Releases | Friday October 25th, 2024
S&P 500 Constituent Earnings Announcements | Friday October 25th, 2024
Data sourced from FactSet Research Systems Inc.
