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Tuesday, October 22

Some of the largest macro moves in the market today include: S&P 500 Index (US) -0.5%. Nasdaq 100 Index (US) -0.8%. Gold +0.6%. Some of the largest moves among US mega-cap stocks include: Apple Inc (AAPL) -1.2%. JPMorgan Chase & Co (JPM) -0.5%. 

Recent economic data from Canada indicates significant declines in both the Raw Materials Price Index and industrial producer prices, with month-over-month drops of 3.1% and 0.6%, respectively, for September 2024. These figures suggest ongoing deflationary pressures primarily driven by lower energy costs.

In global markets, rising U.S. Treasury yields have led to a cautious sentiment among investors as they reassess expectations regarding future Federal Reserve rate cuts amidst geopolitical tensions related to conflicts in the Middle East. The yield on the benchmark ten-year note has reached approximately 4.21%, contributing to downward pressure on equity indices across Europe and North America.

Additionally, traders are closely monitoring upcoming speeches from central bank officials—including those from the ECB and BoE today—which may influence market dynamics further ahead of key economic releases later this week such as flash PMIs for October that could provide insights into broader economic conditions amid these uncertainties.

SPDR S&P 500 ETF Trust (SPY) [-0.5%]
The SPDR S&P 500 ETF Trust (SPY) has seen a price decline of 0.5% since Monday, coinciding with a broader downturn in the S&P 500 Index, which is affected by rising US Treasury yields and geopolitical tensions. Social media discussions reflect concerns over rising interest rates and election uncertainty, with notable drops in U.S. stock futures and the VIX index rising. Key contributors to SPY's performance included Apple, Amazon, General Electric, and Home Depot, all of which posted negative returns. GE Aerospace reported third-quarter results that exceeded earnings estimates but fell short in revenue from its commercial engines segment. Additionally, Bank of America indicated potential earnings headwinds for the S&P under a Harris administration, while a Trump administration could provide a boost. Rising loan delinquencies in commercial real estate and consumer loans have drawn parallels to pre-2008 conditions, further impacting market sentiment.

SPDR Gold Shares (GLD) [+0.6%]
SPDR Gold Shares (GLD) has seen a price increase of 0.6% during the pre-market session on Tuesday, aligning with a broader rise in gold prices, which are up amid heightened safe-haven demand due to escalating geopolitical tensions in the Middle East. As of 06:00 AM ET, gold was trading higher, nearing record highs. The Gold ETF is experiencing significant gains, with an increase of over 31% in 2024, potentially marking it as the best year on record. Recent social media discussions reflect this sentiment, noting that if the year ended today, it would represent the best performance ever for the Gold ETF. Additionally, silver prices have risen notably, reflecting a strong historical correlation with gold and potentially contributing to the movement in GLD.

MMM | +5.8% | +4.6B
3M Co | Industrial Conglomerates
3M Co reported its third-quarter results, revealing adjusted earnings per share (EPS) of 1.98, surpassing analyst expectations of 1.90, with net sales of 6.29 billion compared to a forecast of 6.06 billion. The adjusted operating margin improved to 23%, up from 21.6% year-over-year. The company raised its full-year 2024 EPS guidance to a range of 7.20 to 7.30, tightening the previous outlook of 7.00 to 7.30. Adjusted free cash flow for the quarter was reported at 1.5 billion. Despite a negative operating cash flow of 1.8 billion, larger than anticipated, 3M's stock saw a price increase of approximately 5.8%. Social media highlighted the company's strong operational execution and a significant year-over-year increase in GAAP EPS from continuing operations, which stood at 2.48, marking a rise of 154%.

PM | +2.9% | +5.5B
Philip Morris International Inc | Tobacco
Philip Morris International Inc. reported its Q3 2024 results, revealing adjusted earnings per share (EPS) of $1.97, surpassing the analyst estimate of $1.82. Sales reached $9.91 billion, exceeding expectations of $9.69 billion and reflecting an increase from $9.14 billion in the same quarter last year. The company raised its full-year adjusted EPS guidance to a range of $6.45 to $6.51, up from a previous estimate of $6.17. Additionally, net revenues from the combustibles unit rose by 5.2%, aided by increased cigarette prices and strong performance from the ZYN nicotine pouch brand, which saw shipment volumes rise by 41.4% year-over-year. Total shipping volumes increased by 2.9% to 203 billion units, contributing to a 14.4% rise in adjusted diluted EPS to $1.91, beating the consensus estimate of $1.81. The current market capitalization stands at approximately $184.96 billion.

GE | -5.0%| -10.2B
General Electric Co | Industrial Conglomerates
General Electric Co. reported its third-quarter 2024 results, revealing GAAP revenue of $9.84 billion, exceeding analyst expectations of $9.02 billion. Adjusted EPS was $1.15, slightly above the forecast of $1.14. Despite a 28% year-over-year increase in total orders to $12.6 billion, GE Aerospace experienced a 10% decline in Leap engine deliveries. The commercial engines revenue fell short of expectations, contributing to a nearly 5% drop in share price during premarket trading. GE has raised its adjusted EPS guidance for fiscal year 2024 to a range of $4.20 to $4.35, up from a previous estimate of $3.95 to $4.20, driven by strong demand for maintenance services amid ongoing supply chain challenges.

VZ |-2.9%|-5.2B
Verizon Communications Inc | Integrated Telecommunication Services
Verizon Communications Inc. reported its third-quarter results, revealing adjusted earnings per share (EPS) of $1.19, slightly surpassing the consensus estimate of $1.18. However, total revenue reached $33.3 billion, falling short of the anticipated $33.43 billion. The company's wireless service revenue was $19.8 billion, while consumer revenue saw a modest increase of 0.4% to $25.4 billion. Despite adding 81,000 retail postpaid phone subscribers, an 8.1% decline in wireless equipment sales negatively impacted overall performance. Additionally, net income decreased due to severance charges. Following the mixed results, shares traded lower, moving down by 2.9%. Verizon reaffirmed its full-year adjusted EPS guidance between $4.50 and $4.70 and projected EBITDA growth of 1% to 3%, alongside expected wireless service revenue growth of 2% to 3.5%.

GPC | -14.8% | -2.5B
Genuine Parts Co | Distributors
Genuine Parts Company reported its third-quarter earnings, revealing adjusted earnings per share (EPS) of $1.88, significantly below the consensus estimate of $2.42 and down from $2.49 a year prior. Revenue reached $6 billion, slightly exceeding expectations of $5.94 billion, marking a year-over-year increase. However, comparable sales declined by 0.8%. The company has revised its full-year EPS guidance downward to a range of $6.60 to $6.80, compared to previous estimates of $8.55 to $8.75. Additionally, Genuine Parts lowered its full-year revenue guidance to between $23.3 billion and $23.6 billion, down from an earlier forecast of $23.3 billion to $23.8 billion. Following these announcements, the stock price fell to 143.12, reflecting a significant drop in value.

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