- MacroVisor
- Posts
- Breakfast Bites - Earnings season gets busy
Breakfast Bites - Earnings season gets busy
And yields continue to rise across the world
Rise and shine everyone.
US futures are modestly lower, with MegaCap Tech stocks also trending down. Starbucks (SBUX) dropped 5.3% after missing revenue expectations, while McDonald’s (MCD) fell 6.0% due to E. Coli concerns.
We continue to see rates trading higher with the US 10Y now at 4.22% and Japan’s 40-year JGB yields reaching their highest levels since 2008. The MOVE bond volatility index increased by another 5%, nearing 129.
The US Dollar continues to gain strength - USD/JPY hit new highs, surpassing 152, marking the highest level since July 30th. The euro also dipped below $1.08, its lowest since August 2nd.
Asian markets traded mostly higher, with the Nikkei down and the Hang Seng outperforming with a 2% gain. A Chinese think tank proposed a $280 billion stock market stabilization fund, according to Chinese press.
In Europe, Italian banks, EU defense stocks, and luxury brands are lagging, impacted by L’Oreal’s earnings miss.
Today’s key macroeconomic reports include Existing Home Sales and the Fed Beige Book, alongside a packed earnings schedule across various sectors, including reports from Boeing (BA), IBM, Coca-Cola (KO), AT&T (T), T-Mobile (TMUS), Tesla (TSLA), and Vertiv (VRT).
Key themes to watch include:
Tesla (TSLA) kicks off the Mag 7 earnings today after the market closes. TSLA has seen a 15% drop month-to-date, largely due to disappointing Q3 deliveries and Robotaxi setbacks. Although not directly linked to AI, these earnings might influence sentiment ahead of key Mag 7 releases next week.
VRT’s pre-market earnings are critical for assessing data center demand, while IBM’s earnings may reveal insights into its software growth.
Coca-Cola (KO) earnings could provide valuable insights into consumer demand, particularly among mid-to-low-income groups
Chart of the Day
From BofA:
Buybacks still strong: Corporate client buybacks accelerated last week and continue to track above seasonal levels as a percentage of S&P 500 market cap. Trailing 52-week buybacks as a percentage of S&P 500 market cap are at an all-time high in our data history (since 2010).
Tax loss selling flows: Sales of stocks by institutional clients typically pick up this month ahead of the October 31 deadline for most mutual funds to realize capital gains. This group has been selling stocks for the past four weeks. Retail investor selling usually picks up in December ahead of the December 31 cutoff for individual investors.
Calendars
(news taken from Reuters, FT, Bloomberg; Calendar from Trading Economics)
Reply