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Monday, October 28

Some of the largest macro moves in the market today include: Oil (WTI) -6.2%. S&P 500 Index (US) +0.5%. Nasdaq 100 Index (US) +0.8%. Some of the largest moves among US mega-cap stocks include: Exxon Mobil Corp (XOM) -2.4%. Alphabet Inc (GOOG) +2.2%. Alphabet Inc (GOOGL) +2.2%. 

The Japanese yen has experienced significant pressure following the recent general election, where Prime Minister Shigeru Ishiba's ruling coalition lost its parliamentary majority. This outcome raises uncertainties regarding future monetary policy from the Bank of Japan (BoJ), particularly concerning interest rate normalization plans.

In global markets, oil prices have sharply declined by over 5% as geopolitical tensions eased after Israel targeted military installations in Iran without affecting energy infrastructure. The drop in crude prices is contributing to a decrease in Treasury yields and influencing broader market sentiment ahead of key economic data releases this week.

Market participants are closely monitoring upcoming U.S. economic indicators such as GDP growth figures and Nonfarm Payrolls due later this week, which could significantly impact Federal Reserve interest rate expectations amid ongoing political uncertainty surrounding the presidential elections on November 5th.

United States Oil Fund LP (USO) [-6.2%]
The United States Oil Fund LP (USO) has seen a notable decline in pre-market trading, reflecting a broader market reaction to recent geopolitical developments. Oil prices have dropped significantly, with WTI crude falling over 6% following Israeli airstrikes on Iran that did not target oil infrastructure. This situation has eased immediate supply concerns and reduced geopolitical risk. Additionally, the U.S. Energy Information Administration's report indicated a slight projected increase in global oil supply, while demand forecasts have been lowered due to macroeconomic risks. Concurrently, Citigroup has reduced its forecasts for Brent crude, citing a decrease in the risk premium associated with Middle Eastern geopolitical tensions. Brent crude prices have also dropped significantly, further influencing market sentiment amid expectations surrounding upcoming U.S. economic data and potential adjustments in Federal Reserve policy.

SPDR S&P 500 ETF Trust (SPY) [+0.5%]
The SPDR S&P 500 ETF Trust (SPY) has experienced a price increase of 0.5% since Friday. Recent reports suggest that the ETF is nearing a state of euphoria, reflecting heightened sentiment in the market. This comes amid a backdrop where the S&P 500 had declined nearly 1% for the previous week, contrasting with gains in the Nasdaq and a more significant drop in the Dow. Social media discussions highlight concerning economic factors, including record U.S. credit card debt and substantial losses in real estate debt held by banks. Notably, Tesla's strong quarterly earnings have positively influenced the S&P 500. Additionally, the S&P 500 Index is up, buoyed by positive trends in global equity markets, particularly from Japan, and easing geopolitical tensions contributing to lower oil prices.

XOM | -2.4% | -12.4B
Exxon Mobil Corp | Integrated Oil & Gas
Exxon Mobil Corp has experienced a price drop of 2.4%, aligning with a significant decline in the Integrated Oil & Gas sub-sector. This movement is mirrored by other companies, including Diamondback Energy and APA Corp, which also faced notable declines. The drop in stock prices has been linked to a fall in oil prices, following airstrikes by Israel against Iran over the weekend, although these actions did not target oil or nuclear facilities. Additionally, WTI crude oil prices fell significantly, reflecting concerns about reduced global oil demand growth forecasts from OPEC. Exxon Mobil is set to announce its Q3 FY2024 earnings on November 1, 2024, with an estimated EPS of $1.96 and revenue of $95.6 billion.

GOOGL | +2.2% | +46.2B
Alphabet Inc | Interactive Media & Services
Alphabet Inc (GOOGL) has experienced an increase in its stock price, attributed largely to the positive movement within the Interactive Media & Services sub-sector. The company is actively developing an AI system named Project Jarvis, which aims to automate tasks such as research, shopping, and flight bookings. This initiative is expected to launch as early as December and will utilize a future version of Google’s Gemini model. Additionally, Waymo, Alphabet's autonomous driving unit, has secured a $5.6 billion investment round to expand its robotaxi services in major cities, including San Francisco, Phoenix, and Los Angeles, with plans for Austin and Atlanta by 2025. GOOGL is also preparing to report its Q3 earnings on October 29, 2024, with consensus estimates of $1.84 in earnings per share and $86.3 billion in revenue.

BA | -1.8%| -1.7B
Boeing Co | Aerospace & Defense
Boeing Co. has announced concurrent public offerings of 90 million shares of common stock and $5 billion in depositary shares, aimed at raising approximately $18.9 billion to address financial strains exacerbated by ongoing strikes. The company is reportedly facing losses exceeding $1 billion per month due to a month-long strike involving over 30,000 employees. In addition, Boeing has secured a $10 billion credit agreement with major banks to bolster its liquidity. Social media discussions highlight the urgency of this capital raise to prevent a potential downgrade to junk status, with SEC clearance obtained for offerings up to $25 billion. Pre-market trading reflects volatility, with Boeing's stock having dropped significantly since Friday, aligning with these financial challenges and capital-raising efforts.

ON|+2.6%|+830.2M
ON Semiconductor Corp | Semiconductors
ON Semiconductor Corp reported its third-quarter 2024 adjusted earnings per share at 0.99, surpassing the consensus estimate of 0.97. Revenue for the quarter reached 1.762 billion, exceeding expectations of 1.751 billion. Looking ahead, the company expects fourth-quarter revenue between 1.71 billion and 1.81 billion, with adjusted EPS projected between 0.92 and 1.04, compared to a consensus estimate of 1.00. CEO Hassane El-Khoury highlighted the company's commitment to consistent results amid rising power demands in key markets such as automotive, industrial, and AI data centers. Following the earnings release, ON Semiconductor's stock initially moved minimally but has since increased by 2.6% since Friday. The company also reported a year-on-year revenue decline of 19.2% and a Days Inventory Outstanding figure of 212, indicating elevated inventory levels.

BP | -2.8% | -14.1B
BP PLC | Integrated Oil & Gas
BP PLC's share price has dropped significantly, aligning with a broader decline in the Integrated Oil & Gas sector. The company recently resumed exploration and drilling activities in Libya after a decade-long hiatus, as confirmed by Libya's National Oil Corporation. Additionally, BP is among the 169 S&P 500 companies scheduled to report Q3 earnings this week, with expectations of an earnings per share of $0.89 and revenue of $52.6 billion. This comes amid a notable decrease in ProShares Ultra Bloomberg Crude Oil, which fell sharply due to geopolitical tensions surrounding Israel and Iran, while WTI crude oil prices also declined. Occidental Petroleum Corp experienced a similar downturn, further underscoring the challenging environment for energy stocks.

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