Market Insights

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Sizing Up the S&P 500

• S&P 500 probes late-May levels following bearish outside week.
• Prices under 200-day MA for first time since March.
• 100-day MA turns negative for first time since April.
• Calendar potentially challenging with Fed (11/1), payrolls (11/3) next week.
• Little clear support above mid-May low around 4100.
• S&P 500 fails to hold 50% retracement of 2023’s rally.
• Earnings estimates dipping again:
  • Refinitiv estimate for S&P 500 EPS for 2023 now $219.74 on 10/23, versus $220.84 on 10/2.
  • Potential prices based on different multiples:
    • 18x = 3955 on SPX
    • 17x = 3736 on SPX
    • 16x = 3515 on SPX

Key News

• Bill Ackman covers short position against Treasuries, citing global risks.
• More clean-energy contraction:
  • General Motors (GM), Honda Motors (HMC) drop development of affordable EVs
  • Reuters: Shell cutting low-carbon jobs, focusing on natural gas
• Reuters: iPhone 15 not selling well in China
• Chris Williamson of S&P Global Market Intelligence: Soft landing odds grow as demand boosts output and prices rise at slowest pace in 3+ years. Firms passing along cost savings.
• September new home sales beat estimates
• Weekly crude-oil inventories rise more than expected
• Microsoft (MSFT) beats estimates as AI adds to Azure growth
• Alphabet (GOOGL) misses on key cloud growth. Advertising and search beat but margins disappoint amid higher spending.
• Meta Platforms (META) earnings, revenue beat. Middle East violence may hurt ads.
• Russia jostles nerves with nuclear drill

Sector Watch

• Energy leads to the downside in the last week
• Solar stocks keep falling
• Banks, semiconductors under pressure
• Consumer staples, utilities decline the least amid bearish sentiment
• Gold, silver hold their ground amid geopolitical worries.

Signals Scan

• Roblox (RBLX) stalls near bearish gap.
• Snowflake (SNOW): Potential triangle breakdown
• Starbucks (SBUX) potentially bearish at 50-day MA.
• JPMorgan Chase (JPM) tries to hold early 2023 highs.
• Walt Disney (DIS) follows 50-day MA lower.
• Micron Technology (MU) potential triangle reversal.
• Dollar General (DG) potential bearish bounce.
• Block (SQ) continues lower following consolidation.
• DexCom stalls at falling 20-day MA

Mover of the Week: Verizon Communications

• Telecom raises cash-flow guidance amid strong subscriber growth.
• CEO Vestburg: “momentum will continue.”
• VZ bouncing from 3-year low.

Upcoming Events

• Tomorrow (10/27): PCE inflation
  • Earnings: XOM, CVX
• Monday (10/30)
  • Earnings: MCD, ANET
• Tuesday (10/31)
  • Earnings: AMGN, PFE, AMD
• Wednesday (11/1): ADP Payrolls, ISM manufacturing, *Fed meeting*
  • Earnings: QCOM, PYPL
• Thursday (11/2): Jobless claims
  • SBUX, LLY, SHOP

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