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Friday, October 31

Noteworthy US mega-cap moves today: Amazon.com Inc (AMZN) +13.5%. Apple Inc (AAPL) +2.1%. Exxon Mobil Corp (XOM) -0.8%.

Global equity markets are trading higher today, buoyed by positive earnings reports from major companies like Amazon and Apple. This follows a period of declines driven by concerns over Federal Reserve monetary policy actions and underperformance in the tech sector.

Recent economic data releases have shown mixed results impacting market sentiment. Canada's GDP expanded 0.1% month-over-month for September, slightly recovering from a sharper contraction in August attributed to trade tensions with the U.S., while inflation rates across Europe showed signs of easing; France's annual inflation fell to 1%, below expectations, indicating potential shifts in consumer price pressures that could influence central bank policies.

The ongoing U.S. government shutdown continues to delay key economic data releases, which may affect future Fed decisions on interest rate cuts amid rising uncertainty about labor market conditions as highlighted during recent comments from Chair Jerome Powell regarding differing views within the FOMC on further reductions this year.

SPDR S&P 500 ETF Trust (SPY) [+0.9%]
The SPDR S&P 500 ETF Trust (SPY) has risen by 0.80% to 685.27 in premarket trading. This price movement coincides with the S&P 500 index achieving its longest streak above the 50-day moving average in 14 years, maintaining this position for 125 consecutive trading sessions. The index is currently trading significantly above its 200-day moving average, marking the widest gap since July 2024. Positive market sentiment has been reinforced by strong quarterly results from major companies, including Amazon and Apple, which reported notable gains. Social media discussions reflect a mixed sentiment, with earlier posts highlighting SPY's increase following these earnings reports, while later comments expressed concerns about bearish activity, noting a significant put flow. Key contributors to SPY's performance include Amazon, NVIDIA, Apple, Meta Platforms, and Microsoft, each showing varying degrees of positive returns.

iShares China Large-Cap ETF (FXI) [-1.5%]
The iShares China Large-Cap ETF (FXI) has experienced a notable decline of 1.5% in pre-market trading. This drop coincides with a significant contraction in China's manufacturing activity for October, as evidenced by the Purchasing Managers Index (PMI) falling to 49.0, below economists' expectations. The Composite PMI also decreased to 50.0, while the Non-Manufacturing PMI remained steady at 50.1. Additionally, ongoing uncertainty surrounding U.S.-China trade relations persists, particularly regarding unresolved tariff issues on semiconductors. Within the ETF's holdings, JD and Li Auto Inc. have contributed negatively, with Li Auto announcing a recall of over 11,000 electric vehicles due to safety concerns. Meanwhile, the AUD/USD pair has declined, reflecting broader market sentiment that may also influence FXI.

AMZN | +13.6% | +357.2B
Amazon.com Inc | Broadline Retail
Amazon.com Inc reported strong third-quarter results, with net sales of 180.2 billion, surpassing analysts' expectations of 177.75 billion. Earnings per share reached 1.95, exceeding the consensus estimate of 1.57. The AWS segment generated 33 billion in net sales, compared to an estimated 32.39 billion. For the fourth quarter, Amazon projects net sales between 206 billion and 213 billion, slightly above the consensus of 208.13 billion. Operating income is anticipated to fall between 21 billion and 26 billion. CEO Andy Jassy highlighted a year-over-year growth rate of 20.2% for AWS and emphasized significant investments in capacity, including over 3.8 gigawatts added in the past year. Following the earnings announcement, AMZN shares rose approximately 12-14%, reflecting positive sentiment around the company's performance and outlook.

RDDT | +12.6% | +4.6B
Reddit Inc | Interactive Media & Services
Reddit Inc. reported robust Q3 earnings, with earnings per share (EPS) of $0.80, significantly exceeding the consensus estimate of $0.52. Revenue reached $585 million, surpassing expectations of approximately $546 million, and reflecting a year-over-year growth of nearly 68%. Daily Active Uniques increased to 116 million, marking a 19% rise compared to the previous year. The company also provided optimistic guidance for Q4, projecting sales between $655 million and $665 million, above the consensus estimate of $638 million. Adjusted EBITDA is expected to fall within the range of $275 million to $285 million. Following the earnings announcement, Reddit's stock rose approximately 10% within an hour, and sentiment on social media has been mixed, with some users expressing optimism about the results while others noted a subsequent price drop of around 10%.

NET | +8.2% | +6.7B
Cloudflare Inc | Internet Services & Infrastructure
Cloudflare Inc. reported third-quarter revenues of 562 million, exceeding estimates of 544.8 million. The adjusted earnings per share (EPS) came in at 0.27, surpassing the expected 0.23. For the fourth quarter, the company has guided revenues between 588.5 million and 589.5 million, above the estimate of 580.58 million. The CEO noted a 31% year-over-year revenue growth for the quarter, marking a reacceleration to 30.7%, the highest growth rate in seven quarters. Following the earnings report, TD Cowen raised its price target to 265 from 250, while Baird increased its target to 220 from 200 and Truist Securities to 275 from 230. Needham also raised its target to 285 from 240, all maintaining Buy ratings. In after-hours trading, the stock price increased by approximately 10%.

TWLO | +10.6% | +2.3B
Twilio Inc | Internet Services & Infrastructure
Twilio Inc. reported robust Q3 results, with adjusted earnings per share (EPS) of $1.25, exceeding estimates of $1.08, and revenue of $1.30 billion, surpassing expectations of $1.25 billion. The company provided an optimistic Q4 outlook, projecting adjusted EPS between $1.17 and $1.22 and revenue of $1.31 billion to $1.32 billion, both above consensus estimates. Following the earnings release, analysts responded favorably; Baird raised its price target to $135 from $130, Needham increased its target to $145 from $125, and Mizuho lifted its target to $150 from $140 while maintaining an Outperform rating. Social media highlighted the solid performance driven by increased enterprise demand for messaging and engagement platforms, with a gross profit of $632.1 million and an operating income of $40.9 million. Concurrently, Cloudflare Inc. saw an increase in its stock following its strong Q3 results, contributing to positive sentiment in the sector that may also be influencing Twilio's stock performance.

WDC | +10.6% | +5.3B
Western Digital Corp | Technology Hardware, Storage & Peripherals
Western Digital Corp reported strong fiscal first-quarter results, with adjusted earnings per share of 1.78, exceeding the consensus estimate of 1.58 by 12.73%. Revenue reached 2.818 billion, surpassing expectations of 2.725 billion and reflecting a year-over-year increase of 27.40%. The company's net income was 1.18 billion, significantly up from 493 million in the same quarter last year. For the second quarter, Western Digital projects adjusted EPS between 1.73 and 2.03, and revenue between 2.800 billion and 3.000 billion, both above analyst expectations. The gross margin for Q1 was reported at 43.5%. Additionally, Citi raised the price target for WDC to 180 from 135, maintaining a buy rating. Social media discussions highlighted these earnings results and analyst upgrades, contributing to a notable price movement of approximately 10% shortly after the earnings announcement.

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