- Dow Jones Industrial Average is up 0.6%
- S&P 500 is up 0.6%
- Nasdaq 100 is up 0.7%
US futures are pushing higher at the start of a new week, which will be dominated by earnings season and the Federal Reserve interest rate decision on Wednesday.
Apple, AMD, Qualcomm, PayPal and an array of pharmaceutical stocks headline the calendar this week. You can find the full calendar and our mini previews on the top updates to watch in Earnings This Week.
The Fed is expected to leave interest rates unchanged this week and spotlight is on how much more tightening the Fed believes will be needed going forward, especially in light of new developments like the conflict in the Middle East and elevated bond yields. You can find out what to expect from the macro side of things in the coming days in the Week Ahead.
The economic calendar is light today, headlined by German inflation figures and the Dallas Fed manufacturing index. The Bank of Canada governor Tiff Macklem, the European Central Bank’s Andrea Enria and the Reserve Bank of Australia’s Brad Jones all speak later.
Most discussed Reddit stocks
Below is a list of the top 10 most mentioned US stocks on the WallStreetBets thread on Reddit over the last 24 hours, according to data from Quiver Quantitative. Exchange-Traded Funds (ETFs) and other instruments have been excluded:
Most active US stocks before the bell
Below are the most active stocks with a valuation of at least $500 million before the bell, based on trading data taken from Bloomberg:
- Sage Therapeutics
- Marathon Digital
- Riot Platforms
- Western Digital
US premarket winners and losers
Here are the stocks worth at least $500 million experiencing the sharpest movements in premarket trade, according to data from Bloomberg:
Corp America Airports
SES AI Corp
Top US stocks to watch
Let’s have a look at the top stocks to watch today.
Appetite for McDonalds remains strong
McDonalds is up 2.6% this morning and testing October-highs as demand remains strong in an increasingly tough environment for consumers, with the Big Mac maker saying it will also be more profitable than expected this year.
Comparable sales were up 8.8% in the third quarter, ahead of the 7.4% rise pencilled-in by analysts. US comparable sales rose 8.1% and that was faster than anticipated. Adjusted EPS of $3.19 came in above the $3.00 forecast.
New menu additions and price increases buoyed the topline, while margins are also benefiting from falling input costs. McDonalds said it is now anticipating an annual margin of 46%, up from its previous goal of 45%.
Apple: China concerns in focus ahead of earnings
Apple shares are up 0.3% this morning. The company reports earnings on Thursday, and the central focus will be on demand for its new iPhone 15 and array of other hardware, particularly in China.
Sales of the iPhone 15 in China were down 6% in its first month being launched compared to the iPhone 14, according to market research firm GfK. A separate estimate from IDC said shipments were down 4% in the third quarter. Other estimates from the likes of Counterpoint Research and Jefferies has also suggested that the iPhone 15 is not doing as well as its predecessor in the initial weeks of being launched.
Those figures were reported by Bloomberg, which said both IDC and GfK flagged an impact from the rise in popularity of the new Huawei Mate 60 series. China accounts for about 20% of Apple’s revenue, making it a major market.
Apple has already warned that revenue will be down for a fourth consecutive quarter in the final three months of its financial year, with analysts anticipating a 1% drop to $89.27 billion. Sales of its flagship iPhone, which accounts for about half of its revenue, are predicted to rise 2.3% from last year and services growth is accelerating, but that will not be enough to counter the ongoing weakness in demand for iPads, Macs and wearables.
Big Tech stocks struggle to gain ground this season
We had results out from Microsoft, Alphabet, Meta and Amazon last week and they have failed to provide some much-needed momentum for markets.
Microsoft is up 1.1% and only marginally higher than it was before its latest results. The company’s diverse business model is paying off and Wall Street was impressed with its cloud computing growth, outpacing rivals AWS and Google, to help cement its perceived leadership in AI. But Microsoft boasts a premium over its rivals, which may be limiting gains in a already tough environment for equities.
Alphabet is up 1% after sinking to a three-month low on Friday, with investors left disappointed by the performance of Google Cloud. The unit is seen as key to Alphabet’s future and hopes were high after it turned profitable earlier this year, but growth and profits from Google Cloud fell short of estimates and overshadowed a better performance from its core advertising business.
Meta is up 1% and trading largely where it was before it reported results last week. The stock hit a two-month low in wake of its results before rebounding, with investors spooked by a warning that the outlook for 2024 was “uncertain”, denting optimism that the advertising market was poised to make a comeback next year.
Amazon is up 1.2% and has delivered the best post-results share price performance, although the stock has only managed to regain some of the heavy ground lost in the run up to its results, having hit a five-month low just hours before the update was released. Amazon beat expectations and AWS growth was just good enough to keep investors happy and suggest activity is stabilising after an 18-month slowdown.
Meta to launch no-ad subscriptions in Europe
Meta also announced today that it will launch a new subscription service in Europe that will allow users to enjoy Facebook and Instagram with no adverts in return for a monthly fee of EUR9.99 per month for its web-based platforms and EUR12.99 for those using a smartphone.
The service will be introduced at the start of March 2024.
AMD stock in play ahead of earnings
AMD is up 0.3% this morning at $96.74 and reports results tomorrow. Susquehanna lowered its price target on the semiconductor stock to $130 from $145 this morning, suggesting there is still significant upside potential from current levels.
AMD has fallen behind in the race to supply advanced chips that can power new technologies like AI and machine learning, which may heighten the need for it to impress with its core business this earnings season unless it can show that AI is providing a major tailwind.
Revenue is expected to rise just 2.5% from last year to $5.71 billion and, although tepid, that would follow on from two consecutive quarter of declines.
That will be largely down to its Client segment that provides CPUs, GPUs and processors into laptops and computers coming up against easier comparatives. Sales are forecast to be up 20.6% from last year at $1.23 billion. That will bolster hopes that the lull in demand for consumer electronics is bottoming-out, but that still remains significantly below historic levels. Plus, gaming will remain weak, with sales set to drop over 6%, but appears on course to potentially start rebounding in the near future.
The data centre division is forecast to see revenue rise a measly 0.9% this quarter, which may be underwhelming after AMD guided for an acceleration in growth during the second half and shifting more pressure onto its fourth quarter results.
Adjusted EPS is expected to rise 1% from last year to $0.68.
Western Digital to split into two
Western Digital is up over 11% today after the company said it plans to split itself into two businesses after talks about a potential merger with Kioxia collapsed.
The company said one business will focus on hard drives and the other on flash memory. The separation will take effect in the second half of 2024. This is in an effort to unlock value and has followed a strategic review that was launched last year.
The news came as Western Digital reported first quarter results, revealing revenue dropped 26% year-on-year in the first quarter to $2.75 billion, although improved 3% from the previous quarter. It reported a loss per share of $1.76.
EV stocks rebound from lows
Electric vehicle stocks are on the rise today, having hit fresh lows last week as markets become increasingly concerned about demand despite the intense price war we have seen this year.
Tesla is up 1.2% after hitting five-month lows last week. Rivian is up 0.8% after ending at a four-month low on Friday, while Lucid Group is up 1.2% and bouncing back from all-time lows!
Panasonic, a major battery maker and a supplier to Tesla, warned today that it has reduced battery production in Japan and warned its battery division will be less profitable this year than hoped, fuelling concerns that demand for EVs is softening and the outlook for 2024 is deteriorating.
Ford, GM and Stellantis: UAW strike update
Ford is up 0.7% after plummeting to its lowest level in almost three years on Friday. The company struck a deal with the UAW last week, but fears about the disruption of strikes has given way to the threat posed by the rising costs of getting union members back to work. The deal will raise wages by about 25%, and this could rise further due to cost-of-living increases. Pension contributions are rising, bonuses are being paid and new incentives are being offered – all of which will raise already burdensome cost pressures.
Stellantis is up 1.6% after striking a tentative deal with the UAW, which is also thought to include a 25% pay rise and cost-of-living increases. The stock hit a two-month low last week and was due to report quarterly results tomorrow, but this has now been delayed to October 31 so it has more time to evaluate the impact of the deal. Stellantis is now also facing strike action in Canada after union Unifor initiated strike action at all the carmaker’s plants today. Unifor has already struck deals with Ford and GM this year.
General Motors is up 0.1% after hitting its lowest level in over three years last week. The company has not made a breakthrough with the UAW, which decided to ramp-up the pressure by expanding strike action to another factory in Tennessee over the weekend and dashing hopes that the pair were close to signing an agreement.
CVS and Walgreens hit by strike action
CVS Health is up 0.3% and Walgreens Boots Alliance is up 0.8% as thousands of workers prepare to stage a three-day walkout starting today in an effort to push for better working conditions and for more workers to be hired, according to Reuters.
This will be the third major strike by pharmacists in little over one month, the report said.
SoFi rebounds from 5-month low after earnings
SoFi is up over 10% today and bouncing back from five-month lows today after seeing an influx of deposits and adding a record number of new members in the latest quarter, allowing it to raise guidance and install confidence it is on the path to profitability.
The lender said it had $15.7 billion of deposits at the end of the third quarter, far more than the $14.9 billion expected by analysts. It added 717,000 new members, marking a record for the firm. Revenue rose 27% to $530.7 million, ahead of the $512.7 million forecast. Its adjusted loss per share was also smaller than estimated.
SoFi said it is now expecting annual adjusted revenue of $2.045 billion to $2.065 billion, having previously guided for $1.974 billion to $2.034 billion. It said the growth in deposits has reduced the cost of financing its loans, improving profitability.
IonQ has price target cut
Quantum-computing firm IonQ is one of the most traded stocks before the bell today and is up 3% at $10.44 as it continues to recover from the four-month lows hit last week. Morgan Stanley cut its price target on the stock to $12 from $16 this morning and maintained its Equal-Weight rating.
Bitcoin continues to fly at 17-month highs
Bitcoin is holding steady above $34,400 and remains near recent 17-month highs as markets gain confidence that a Bitcoin exchange-traded fund could be approved. That continues to provide support to cryptocurrency stocks, with Marathon Digital, Riot Platforms and Coinbase are up 2% to 4.8% today.