Stocks End Lower, More Earnings On Tap, PCE Inflation Report On Deck For Friday Image: Bigstock Stocks closed lower yesterday in uneven trade. The Nasdaq was hit the hardest, giving up -2.43%. The S&P was next with -1.43%. The Dow was actually up for a portion of the day, but traded lower for most of the afternoon before closing down -0.32%. The day started off with earnings from Automatic Data Processing (3.77% positive EPS surprise), Thermo Fisher (1.97% positive EPS surprise), and Boeing (-1.56% negative EPS surprise). After the close we heard from Meta, and they posted a 21.3% positive EPS surprise, and a 2.07% positive sales surprise. That equated to a 167% quarterly EPS growth rate vs. the same quarter last year, and a sales growth rate of 23.2%. They were down -4.17% in the regular session before earnings, but were trading up by roughly 3.0% in after-hours. We also heard from IBM after the close and they reported a 3.77% positive EPS surprise, and a -0.13% negative sales surprise. They were down -0.52% in the regular hours before they reported, and were trading up more than 1.00% in after-hours. ServiceNow also reported after the close and they posted a 14.5% positive EPS surprise, and a 0.76% positive sales surprise. They were down -4.37% in the regular session before they reported, and were trading up by 5.25% in after-hours. In other news, MBA Mortgage Applications were down -1.0% w/w with purchases down -2.2%, and refi's up 1.8%. New Home Sales came in at 759,000 units (annualized) vs. last month's 676K and views for 685K. And the Survey of Business Uncertainty (which shows the year-ahead expectations from U.S. firms), showed Sales Growth coming in at 4.13%, and Employment Growth coming in at 4.09%. Down a tad vs. the previous month's 4.30% and 4.16%. But in the same general range. Today we'll get Durable Goods Orders, Weekly Jobless Claims, the advance estimate for Q3 GDP, the International Trade in Goods report, Retail and Wholesale Inventories, Pending Home Sales, and the Kansas City Fed Manufacturing Index. On the earnings front we'll hear from 335 companies today, which includes UPS, Honeywell, and Bristol Myers Squibb before the open. Then after the close we'll get earnings from Amazon, Intel, and Ford amongst others. Tomorrow, however, is this week's main event, and that's the Personal Consumption Expenditures (PCE) index. That's the Fed's preferred inflation gauge. And will be the last inflation report they get before their FOMC announcement on Wednesday, November 1. The Fed is expected to hold rates steady next week. Fed Chair, Jerome Powell, and several of his colleagues have acknowledged that rising yields, especially on the long bond, have tightened financial conditions significantly in recent months. And that may preclude the Fed from having to tighten further. Late last night, it was reported that Ford and the United Auto Workers union negotiators reached a tentative labor agreement. The next steps include approval from UAW leaders and then ratification (approval from a simple majority) from the union workers. If all goes well, this would end the strike which has lasted for nearly 6 weeks. Although, GM and Stellantis are still at the bargaining table. Earnings season continues to impress. We will see if that continues as we get deeper in. Granted, it's been largely ignored so far. But a good report is a good report. The major indexes are currently down for the week. But not so much where they couldn't turn things around in the next 2 days. We shall see. See you tomorrow, Kevin Matras Executive Vice President, Zacks Investment Research |
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