The Nasdaq and S&P 500 both clocked rebounds after the prior week’s stock market slide caused by China tariff concerns. Both indexes found healthy support at their 21-day exponential moving averages. The S&P 500 dipped far enough to rebound from its 10-week moving average.
If history is any guide, further declines in the S&P 500 this year are likely to be limited, CFRA tells us. The S&P 500 added more than 9% from June 27, the day it exited a four-month consolidation, to Oct. 10. That gain and duration is typical after full recoveries from 10% to 20% declines since 1945. Since WWII, no deep, early year correction has ever been followed by another sell-off in excess of 10% in the same year.
Heading into the third full week of October, Netflix (NFLX) and Tesla (TSLA) headline the upcoming earnings action. It is also a big week both for defense/aerospace stocks and for mining and steelmaking. Some critical inflation data appears set to slip through the government shutdown gauntlet. And a number of fast-moving stocks near buy points are also due to report.
Stocks: Hot Picks In A Tricky Market
The market rally is near record highs, but recent volatility has made new buys tricky. Still, a number of leaders have been loitering around buy points, including Alnylam Pharmaceuticals (ALNY), Guardant Health (GH), Walmart (WMT), FTAI Aviation (FTAI) and Cloudflare (NET). Alynylam, a profitable biotech, has been flirting with a buy zone after flashing early buy signals. Money-losing cancer diagnostics firm Guardant touched its buy point, then pulled back. Walmart is a defense play, but received an AI boost this past week and rebounded from 10-week support into a buy zone. FTAI Aviation is working on a flat base while Cloudflare has just forged one, after both made solid advances.
Tesla Stock Holds Near Highs Ahead Of Q3 Results; Netflix, Intel, IBM Also Due
Stock Market Econ: Shedding Some Light On The Shutdown
The government shutdown could last a while longer, but the dearth of official economic data gets a brief reprieve Friday. The consumer price index for September is expected to show a 0.3% rise in the core prices, excluding food and energy, according to FactSet. The headline 12-month inflation rate is forecast to rise to 3.1% from 2.9%. A hot CPI won’t derail a Fed rate cut on Oct.29, when markets see 100% odds of another trim, but it could create doubt about a third straight cut on Dec. 10. The Bureau of Labor Statistics will put out the CPI during the shutdown only because it’s needed to determine Social Security cost-of-living adjustments. S&P Global’s purchasing manager index is due out Friday.
Automakers: Can Tesla Pass Its Q3 Test?
Tesla reports third-quarter earnings after the stock market closes Wednesday. Investors await CEO Elon Musk’s comments on the robotaxi rollout and the outlook for new vehicles and sales heading into Q4 and 2026. Analyst consensus pegs third-quarter EPS falling 26% to 54 cents with sales increasing about 4% to $26.27 billion. However, the Sharp consensus, which tracks recent analyst revision trends for a potentially more accurate estimate, predicts earnings of 55 cents per share and revenue totaling $27.12 billion. With record vehicle deliveries and strong energy deployments, Tesla could well beat the top and bottom line estimates. Shares are up almost 9% this year.
Why This Market Is So Dangerous. U.S.-China Talks, Key Earnings Due.
Entertainment: Netflix To Update Ad Progress
Netflix will report its third-quarter results late Tuesday. Analysts will focus on Netflix’s progress in scaling its advertising-supported service, a key growth area. FactSet polls expect earnings of $6.96 a share on sales of $11.51 billion in the September quarter — gains of 29% and 17%. Popular Netflix content in Q3 included the second season of “Wednesday,” the third season of “Squid Game” and movie “KPop Demon Hunters.”
Defense-Aerospace: Buybacks Key In Q3 Reports
Defense and aerospace leaders serve up a wave of results this week. Lockheed Martin (LMT), GE Aerospace (GE), RTX (RTX) and Northrop Grumman (NOC) report Tuesday, followed by Teledyne Technologies (TDY) on Wednesday. Hexcel (HXL) and Textron (TXT) report Thursday, with General Dynamics (GD) Friday. Analysts expect a mixed bag for the quarter. For Lockheed Martin, RTX and Northrop Grumman, FactSet projects earnings declines and revenue gains. Views on the Middle East ceasefire and on Treasury Secretary Scott Bessent’s comments on limiting defense contractor share buybacks will be of interest.
Also of potential interest, Axios holds its future of defense summit on Wednesday in Washington D.C. The event aims to be a deep dive into developing defense technologies, and includes representatives of various federal agencies, as well as members of Congress and executives from companies including Palantir (PLTR) and Anduril.
Mining-Metals: Getting The Dirt On Gold, Steel, Copper
U.S. steelmaker Cleveland-Cliffs (CLF) on Monday opens a big week for metals and miners. Analysts expect topline growth up 7% and a narrower loss vs. the prior three quarters. Aluminum giant Alcoa (AA) reports late Wednesday. Copper giant Freeport-McMoRan (FCX) issues results Thursday, with analysts expecting a 1% revenue slip after a mining disaster in Indonesia. The Q3 call won’t happen until next month when FCX can provide more clarity about the incident. Gold miner Newmont (NEM), which reports late Thursday, is seen posting a 77% EPS increase on 12% revenue growth. FCX has formed a double-bottom base.
Stock Market Earnings Briefs
Quest Diagnostics (DGX) will report its third-quarter results before the stock market opens Tuesday. Analysts polled by FactSet expect Quest to earn an adjusted $2.50 per share on $2.74 billion in sales, climbing a respective 9% and 10%. Investors are likely to focus on the financial impact of a joint venture signed in August with Corewell Health as well as commentary on legislative bills tied to Medicare reimbursement for diagnostic tests.
Valmont Industries (VMI) reports Tuesday. JPMorgan has an overweight rating and a 480 price target on the stock, implying upside few about 19% Shares are up about 23% from a June breakout, with a year-to-date gain of 31%.
GE Vernova (GEV) reports third-quarter earnings before the stock market open Wednesday. Analyst consensus has quarterly EPS growing to $1.72, up from a 16 cent per share loss a year ago, with revenue increasing 2.6%. Investors will be looking to see if GEV raises 2025 guidance once more and should keep tabs on its natural gas turbine backlog, which is filling up quickly due electricity and AI data center demand.
United Rentals (URI) announces third-quarter earnings and revenue late Wednesday. Analysts expect 4% EPS and sales growth. Uncertainty over tariffs and the economic outlook has played to the company’s strengths, steering consumers to rentals over heavy equipment purchases. Caterpillar (CAT) reports earnings on Oct. 29.
Lam Research (LRCX) will post its fiscal first-quarter results late Wednesday. Analysts expect the semiconductor equipment firm to earn $1.22 a share, up 41% year over year, on sales of $5.22 billion, up 25%, in the September quarter
Amphenol (APH) sits on a year-to-date gain of 81% ahead of its Q3 results on Wednesday. FactSet analysts expect 59% earnings growth and a 37% revenue gain. Shares are in a four-weeks tight pattern.
YOU MIGHT ALSO LIKE:
Find Best Growth Stocks Via IBD’s Most Stringent Screen
Source link
