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Wednesday, October 30

Some of the largest macro moves in the market today include: Oil (WTI) +1.5%. Euro Stoxx 50 Index (EU) -1.6%. CAC 40 Index (France) -1.7%. Some of the largest moves among US mega-cap stocks include: Eli Lilly and Co (LLY) -10.9%. Alphabet Inc (GOOG) +6.7%. Alphabet Inc (GOOGL) +6.6%.

Recent economic data releases have significantly influenced market sentiment. The U.S. GDP growth for Q3 2024 was reported at an annualized rate of 2.8%, below expectations, while private sector employment rose by a stronger-than-expected 233K jobs in October, the highest increase since July last year. This mixed bag has led to speculation about future Federal Reserve interest rate cuts as markets react to these indicators ahead of key reports like Nonfarm Payrolls.

In Europe, preliminary GDP figures showed positive results across major economies: Germany's economy unexpectedly grew by 0.2%, and France matched forecasts with a growth of 0.4%. However, Italy stalled with no growth recorded this quarter despite overall Eurozone expansion reaching approximately double initial estimates at around 0.9% annually; such outcomes are prompting adjustments in ECB easing expectations moving forward.

Additionally, oil prices saw gains today amid unexpected declines in U.S crude inventories alongside rising geopolitical tensions affecting supply dynamics globally—WTI increased over $68 per barrel following recent lows driven partly by concerns surrounding Middle Eastern conflicts and their impact on energy supplies worldwide.

VanEck Semiconductor ETF (SMH) [-1.7%]
The VanEck Semiconductor ETF (SMH) has experienced a decline of approximately 1.7% during the pre-market session. This drop coincides with higher yields on U.S. government bonds, which are increasing borrowing costs for businesses and potentially affecting technology sector valuations. Despite Alphabet Inc.'s strong third-quarter results positively impacting tech stocks, SMH is showing a daily return of -0.67%. Significant contributors to the ETF's performance include Advanced Micro Devices Inc. (AMD), which reported third-quarter revenue above estimates but fell short on net profit, leading to a notable decline in its shares. Other major holdings such as Nvidia (NVDA) and Qualcomm (QCOM) also posted negative returns. Additionally, the Nasdaq 100 Index has slightly declined, reflecting broader market sentiment that may be influencing SMH's performance. Recent macroeconomic indicators, including a lower-than-expected U.S. GDP growth rate for Q3, further complicate the economic landscape surrounding semiconductor stocks.

iShares China Large-Cap ETF (FXI) [-2.1%]
The iShares China Large-Cap ETF (FXI) has seen a decline of 2.1%, reflecting a broader downturn in Chinese markets, with the Shanghai Composite and Shenzhen CSI 300 dropping by 0.61% and 0.90%, respectively. Noteworthy individual stocks within the sector also fell significantly, including JD and FUTU, which dropped considerably, while NTES and BIDU experienced smaller declines. Additionally, the ETF's top contributors to performance were negatively impacted, with TCEHY, JD, and LI showing substantial losses. Furthermore, China is reportedly developing a $1.6 trillion debt stimulus aimed at revitalizing its economy, a development that may influence related assets. In a separate note, China has advised automakers to halt investments in EU countries due to new electric vehicle tariffs, potentially affecting Li Auto Inc.'s operational strategies and market competitiveness.

LLY | -11.6% | -88.2B
Eli Lilly and Co | Pharmaceuticals
Eli Lilly and Co reported disappointing Q3 2024 earnings, with revenue of $11.44 billion falling short of the consensus estimate of $12.10 billion. The adjusted EPS was $1.18, below expectations of $1.45. Sales for Zepbound reached $1.26 billion, missing the forecast of $1.63 billion, while Trulicity sales declined by 22% to $1.30 billion. Following these results, the company revised its full-year guidance, lowering revenue expectations to between $45.4 billion and $46 billion and adjusting EPS guidance down to a range of $12.05 to $12.55. In pre-market trading, LLY shares dropped significantly, reflecting the negative sentiment surrounding the earnings miss and revised guidance.

GRMN | +14.3% | +5.2B
Garmin Ltd | Consumer Electronics
Garmin Ltd reported third-quarter 2024 results with a pro forma EPS of 1.99, significantly surpassing the consensus estimate of 1.44 by 38%. This represents a year-over-year increase of 41% from 1.41. Revenue reached 1.586 billion, exceeding expectations of 1.444 billion by nearly 10% and reflecting a 24% increase from the prior year’s 1.278 billion. The company raised its fiscal year 2024 guidance, projecting revenue of approximately 6.12 billion and pro forma EPS of 6.85, up from previous estimates of 5.95 billion and 6.00, respectively. Gross margin is anticipated at 58.5%, with an operating margin of 24%. Following the earnings announcement, Garmin's stock price rose to 166.27, reflecting a notable increase. Social media discussions highlighted these results, emphasizing the strong performance and upward revision of guidance.

RDDT | +21.6%| +3.6B
Reddit Inc | Interactive Media & Services
Reddit Inc. reported strong third-quarter 2024 results, posting earnings per share of $0.16, a significant improvement from a loss of $0.13 in the prior year. Revenue reached $348.4 million, exceeding the consensus estimate of $312.83 million, with a notable 68% year-over-year increase. The company also reported a net income of $29.9 million and a 47% rise in daily active users to 97.2 million. Advertising revenue climbed 56% to $315 million. For the fourth quarter, Reddit forecasts revenue between $385 million and $400 million, surpassing the estimated $356.2 million. Adjusted EBITDA guidance for Q4 is set at $110 million to $125 million, compared to an estimate of $87 million. Following these results, RDDT shares surged significantly in after-hours trading, reaching new all-time highs and continuing their upward momentum into the pre-market session.

OTIS |-4.7%|-1.8B
Otis Worldwide Corp | Industrial Machinery & Supplies & Components
Otis Worldwide Corporation reported its third quarter 2024 financial results, with net income at $540 million and adjusted EPS of $0.96, both falling short of consensus estimates. Sales totaled $3.548 billion, also below expectations. The New Equipment segment experienced a significant decline, with sales decreasing, while the Service segment posted a modest increase in net sales. Following the earnings announcement, Otis revised its full-year outlook, projecting adjusted EPS of approximately $3.85 and net sales around $14.2 billion, down from previous estimates. This guidance adjustment reflects ongoing challenges in the New Equipment sector. The stock moved downwards shortly after the earnings release and further declined following the revised guidance.

GOOGL | +6.6% | +147.4B
Alphabet Inc | Interactive Media & Services
Alphabet Inc. reported robust third-quarter results, with total revenue reaching $88.27 billion, surpassing expectations of $86.37 billion and reflecting a year-over-year increase of 15%. Advertising revenue rose to $65.85 billion, up from $59.65 billion the previous year. The company's earnings per share (EPS) of $2.12 exceeded the consensus estimate of $1.84 by 28 cents. Google Cloud revenue also performed well, totaling $11.35 billion compared to $8.41 billion a year prior. Following these announcements, Alphabet's Class A shares experienced a significant rise in after-hours trading, climbing 3% to $175.15. The company also announced a cash dividend of $0.20 per share, totaling $2.5 billion for the recent quarter. Social media discussions have highlighted the strong financial performance and positive market reaction, with users noting a jump of over 5% in GOOGL's stock price following the earnings report.

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