Welcome to the Weekend Updates
As I wrote in my October blog, this month has been volatile. This is not a surprise as it happens most of the year. Last week, the U.S. stock markets experienced volatility due to escalating U.S.-China trade tensions and a prolonged government shutdown which started on October 1. A sell-off sparked by trade concerns and regional bank credit issues led to a sharp decline mid-week, with the S&P 500 losing 2.4% at its lowest. Markets rebounded slightly by Friday, supported by better-than-expected bank earnings and eased trade concern. Gold hit record highs above $4,100, reflecting safe-haven demand, while the 10-year Treasury yield rose to 4%. The VIX surged past 27, signaling heightened uncertainty. Investors await key data delayed by the shutdown. Despite all these the Dow Jones was up 1.6%, the S&P 500 was up 1.7%, and the Nasdaq rose 2.1% for the week. Most of the AI related stock and Quantum computing stocks were hammered later in the week. The main reason in my view were profit taking and the Options expirations that took place last Friday. Please note that U.S Stock market amounts about $1.65T daily trading values and the Option market trades about $1.27T per day, including Index options!! What it means is that Options market has astronomical impact on the stock and stock market as a whole.
Key Earnings this week
10/21: NFLX
10/22: TSLA => I think Tesla would have a solid quarter, particularly from revenue perspective. However, what Elon Musk says in the earnings call about RoboTaxi, FSD, Optimus, cheaper version car etc will be the KEY. I will be keenly watching the results. If you are a Tesla shareholder, please note that the last day for voting is November 5. I suggest to VOTE for sure as it may be a very critical voting for Tesla's future direction.
Earnings
On Thursday, Taiwan Semiconductor (TSM) came with solid earnings, Revenue came at $33.10B vs. $23.80B expected any Wall Street. Revenue grew 39.1%. The Earnings Per Share (EPS) was up 39% to $2.59.
BANK and FIs Earnings
• JPMorgan Chase (JPM): EPS $5.07 (est. $4.83), rev. $47.1B (est. $44.86B), net income $14.4B (+12% YoY).
• Goldman Sachs (GS): EPS $12.25 (est. $8.52), rev. $15.18B (est. $12.0B), net income $4.10B (+37% YoY).
• Wells Fargo (WFC): EPS $1.66 (est. $1.54), rev. $21.44B (est. $21.37B), net income $5.59B (+9% YoY).
• Citigroup (C): Adj. EPS $2.24 (est. $1.90), rev. $22.09B (est. $21.09B), net income $3.8B (+15% YoY).
• BlackRock (BLK): EPS $8.43 (est. $11.24), rev. $6.51B (est. $6.22B), net income $1.32B (-19% YoY).
The CPI number expected this week but with government shutdown I doubt it may happen.
Other News
HIMS
The company announced the launch of perimenopause and menopause treatment options on its platform. This expansion into women's health offered customers access to personalized treatment plans and prescription medications, including estradiol and progesterone. The stock was up 16%. However, one BOA analyst maintained its Sale ratings on the stock and said $28 price target. The stock got hammered. Honestly, I NVER invest in any company based on what analysts are saying. I always do my due diligence and invest as long as it falls in my criteria. I think this is a good long term but volatile stock. Hence, I added to my current position. We will see how it goes..Please note that this stock was added in my last week's blog.
Stocks to watch
TSLA, NFLX, APLD, NBIS, IONQ, AVGO, NVDA, CRWV, HIMS, CVNA, HOOD, TSM, AMD, TQQQ, ORCL
What to expect
I do expect continue volatility but it may get better once the tech earnings starts coming. This week will be the beginning with NFLX and TSLA earnings followed by marathon of tech stocks earnings next week where all Mag 7 will report except NVDA. I am not too much perturb with the volatility and take opportunity to add good equites as opportunity arises. The bull market is very much in place and may continue at least till end of the year. I will keep the group posted if I change my view. Having said that, one of the key determinants of the future market direction depends on big tech earnings. So, we must keep an eye on that and strategize accordingly.
A note to the reader: As I said in my WhatsApp group, I may not be able to provide daily updates to the group due to some personal constraints. I can try my best to update if something is critical or when I get some time. So, please bear with me.
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