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Friday, October 25

Some of the largest macro moves in the market today include: Gold -0.7%. Platinum -2.1%. Apple Inc (AAPL) -0.8%.

Recent economic data releases have shown mixed signals impacting market sentiment. In the U.S., durable goods orders for September fell by 0.8%, which was less than expected, while new home prices in Canada remained unchanged against forecasts of a slight increase. Additionally, Germany's Ifo Business Climate index improved to 86.5 from an eight-month low, indicating better business morale despite ongoing challenges.

Central bank policies are also significantly influencing markets as discussions around potential interest rate cuts continue ahead of upcoming elections and key economic reports next month. The Bank of Portugal has indicated that a cut could be on the table if growth risks accumulate further; meanwhile, comments from ECB officials suggest they remain cautious about future monetary policy adjustments amid improving but still fragile conditions across Europe.

In equity markets, there is notable volatility with investors reacting cautiously to geopolitical tensions and election uncertainties in the U.S., alongside rising Treasury yields affecting risk appetite globally. While some indices like Japan’s Nikkei saw gains today due to positive investor sentiment towards green energy initiatives discussed at recent forums in China—where foreign investment opportunities were highlighted—the overall mood remains tempered as traders await more definitive indicators before making significant moves.

SPDR Gold Shares (GLD) [-0.3%]
SPDR Gold Shares (GLD) has seen a price decline of 0.3% since Thursday. Gold prices have fallen today, driven by a stronger US Dollar, bolstered by robust labor market data and expectations of less aggressive interest rate cuts from the Federal Reserve. Additionally, escalating geopolitical tensions in the Middle East are impacting safe-haven demand for gold. Notably, gold is currently just $22 short of its all-time high following a significant rebound after a recent pullback. However, social media discussions indicate caution among traders, particularly as it is Week 19 for gold, suggesting potential concerns about the sustainability of recent price increases. Silver has also dropped significantly, reflecting broader market sentiment and historical correlations with gold prices.

SPDR S&P 500 ETF Trust (SPY) [+0.4%]
In pre-market trading, the SPDR S&P 500 ETF Trust (SPY) has moved up slightly since Thursday. Social media activity highlights mixed sentiments surrounding SPY, with discussions on housing affordability linked to rising mortgage rates and their broader economic implications. The S&P 500 closed with SPY up modestly, while notable macroeconomic concerns persist, particularly regarding the highest mortgage rates in three decades. Additionally, a bearish divergence between junk bonds and the S&P 500 has emerged, raising questions about future impacts on SPY. Among the ETF's top holdings, NVIDIA, Microsoft, and Amazon contributed positively to its performance, although Microsoft faces scrutiny over its AI tools. Meanwhile, the US S&P 500 Spot Index is experiencing a slight decline, influenced by mixed economic data and cautious trading conditions ahead of durable goods data releases.

TPR | +15.0% | +1.8B
Tapestry Inc | Apparel, Accessories & Luxury Goods
Tapestry Inc. experienced a significant rise in share price following a U.S. judge's ruling that permanently blocked its proposed $8.5 billion acquisition of Capri Holdings. In response to this decision, Tapestry announced plans to appeal. Following the news, several analysts adjusted their price targets for Tapestry, with Evercore raising its target from 47 to 63, Baird increasing it to 53 from 50, and JPMorgan upgrading it to 66 from 51. Concurrently, shares of Capri Holdings saw a substantial decline of nearly 45%. Social media discussions highlighted the ruling as a notable win for the Federal Trade Commission, which had sought a preliminary injunction over concerns regarding competition in the “accessible luxury” handbag market. Following the announcement, Tapestry's shares were noted to have increased to approximately 44.47, while Capri's shares fell to around 41.60.

CNC | +12.3% | +4.5B
Centene Corp | Managed Health Care
Centene Corp reported its Q3 2024 financial results, revealing an adjusted EPS of 1.62, exceeding the estimate of 1.38, and total revenues of 42.02 billion, surpassing expectations of 37.699 billion. The company’s net income rose to 713 million from 469 million year-over-year. Centene's health benefits ratio was reported at 89.2%, with total membership reaching 28.64 million, reflecting a 22% increase in Marketplace memberships and a 49% increase in Medicare Prescription Drug Plans compared to Q3 2023. Additionally, Centene raised its FY24 revenue guidance to between 159.08 billion and 161.03 billion, up from the previous range of 155.08 billion to 157.08 billion, and adjusted its FY24 premium and service revenue outlook to between 143.58 billion and 144.53 billion. Following these announcements, Centene's stock price increased significantly in pre-market trading.

WDC | +12.0%| +2.9B
Western Digital Corp | Technology Hardware, Storage & Peripherals
Western Digital Corp reported its fiscal Q1 2025 results on October 24, 2024, with adjusted earnings per share of 1.78, exceeding the analyst consensus estimate of 1.73. Revenue for the quarter reached 4.09 billion, slightly below expectations but significantly up from 2.75 billion year-over-year. The company highlighted a remarkable 153% increase in cloud revenue, totaling 2.2 billion and representing 54% of total sales. For Q2, Western Digital guided adjusted EPS between 1.75 and 2.05, with revenue expectations ranging from 4.20 billion to 4.40 billion. Following the earnings announcement, shares rose notably in premarket trading, reflecting a positive response to the results. Social media discussions emphasized the strong performance in both Flash and HDD segments, with a gross margin improvement to 38.5%. Analysts from BofA reiterated a Buy rating with a price target of 89, citing solid demand trends and improving margins.

UHS|-8.8%|-1.2B
Universal Health Services Inc | Health Care Facilities
Universal Health Services Inc (UHS) reported its third-quarter earnings on October 24, 2024, with a profit of $3.71 per share, slightly exceeding the estimate of $3.70. Revenue rose to $3.96 billion, surpassing the forecast of $3.90 billion. Despite these positive results, the company faced increased expenses, particularly in salaries and wages, which rose by 7% to $1.9 billion. This contributed to a nearly 8% decline in share price during after-hours trading. Operating charges increased by 9.2% to $3.6 billion. Notably, net income for Q3 reached $258.7 million, or $3.80 per diluted share, compared to $167.0 million, or $2.40 per diluted share, in the same quarter last year. The uptick in admissions at both acute care and behavioral health facilities was acknowledged amid these financial pressures.

CL | -1.3% | -1.1B
Colgate-Palmolive Co | Household Products
Colgate-Palmolive Co reported third-quarter adjusted earnings per share of 91 cents, surpassing the analyst estimate of 89 cents. Quarterly sales reached $5.03 billion, a year-over-year increase of 2.4%, exceeding the consensus estimate of $5.01 billion. The company achieved gross margin expansion for the sixth consecutive quarter, with GAAP gross profit margin rising to 61.1%. Despite these positive results, sales in Latin America and North America declined by 3.2% and 2.1%, respectively. Colgate-Palmolive has raised its full-year guidance for net sales growth to a range of 3% to 5% for 2024, up from a previous forecast of 2% to 5%, while organic sales growth expectations have been increased to 7% to 8%. Following the earnings announcement, shares were observed trading lower in pre-market activity.

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