Market Overview - The week saw an interest rate cut from the Fed, leading to most indices closing higher, with the Nasdaq up 2%, S&P gaining 0.75%, and Dow also increasing by 0.75%. However, the Russell 2000 index closed 1.4% lower [1] Sector Performance - Technology and consumer discretionary sectors rallied close to 3%, while real estate, materials, and consumer staples sectors declined nearly 4% [2] Major Earnings Reports - Alphabet reported strong earnings, surpassing $100 billion in quarterly revenue for the first time, with search and other revenue at $56.6 billion and Google Cloud at $15.2 billion. The company plans to increase its 2025 capital expenditures to between $91 billion and $93 billion, resulting in an 8% stock increase [3] - Meta Platforms experienced a 12% stock decline despite beating earnings expectations, attributed to raising its 2025 capital expenditures to between $70 billion and $72 billion, compared to previous estimates [4] - Amazon reported $180 billion in revenue, exceeding estimates of $177.8 billion, with AWS Cloud growing by 20%. The company anticipates revenue between $206 billion and $213 billion for the current quarter, leading to a 9% stock rally [5] - Apple achieved record revenue post-earnings, despite missing iPhone sales expectations, while Microsoft reported an earnings beat but saw little change in stock price, down 1% for the week [6] Upcoming Earnings and Economic Data - Next week will feature earnings reports from companies such as Palantir, AMD, Qualcomm, Uber, McDonald's, and Nova Nordisk. Additionally, data on non-farm employment, JOLTS, and manufacturing is expected, contingent on the resolution of the government shutdown [7]

Market Overview & Strategy - The analysis focuses on the "MAG7" stocks (excluding Nvidia due to prior reporting) as market leaders, questioning their defensive nature [1][2] - Analyst owns Microsoft, Alphabet, and Amazon in personal portfolio as long-term picks [24] - The analysis suggests that most MAG7 stocks are breaking out and, while some are expensive, earnings growth remains strong, except for Tesla [25] Individual Stock Analysis - **Tesla (TSLA):** Earnings are volatile with inconsistent beats and misses; earnings are expected to fall 32% this year but rebound 48.5% in 2026; focus is on robo-taxi rollout and new stripped-down car sales [3][4][5] - **Microsoft (MSFT):** Consistent earnings growth with fiscal 2026 expected to be up 12.9% and fiscal 2027 up 16%; shares are up 23.5% year-to-date [8][9] - **Alphabet (GOOGL):** Good earnings growth expected for 2025 at 23.6%, but slower growth of 7.2% in 2026; year-to-date, up 35.5% and relatively cheaper with a price-to-sales ratio of 8.3% and PE of 25 [11][12] - **Meta (META):** Strong earning surprise track record; earnings expected to be up 18% this year, but only 5.5% next year; year-to-date up 21.7%, PE of 25, and price-to-sales of 10 [13][14][15] - **Apple (AAPL):** Shares hitting new all-time highs, but only up 8.3% year-to-date; slower growth expected for next year; PE of 32, price-to-sales of 9.1% [16][17][19] - **Amazon (AMZN):** Shares are down 2.4% year-to-date and underperforming the S&P 500 over five years; cheapest of the MAG7s with a price-to-sales of 3.4%; earnings growth of 23.5% this year and 12.2% next year [20][21] Valuation Metrics - Price-to-sales ratios are stretched for many MAG7 stocks, with some above 10 [9][12] - Amazon is the cheapest of the MAG7s with a price-to-sales ratio of 3.4 [20] Key Dates - Microsoft, Alphabet, and Meta are all reporting on October 29th [7][13] - Apple and Amazon are reporting on October 30th [23] - Tesla will be reporting this week [23]

Market Outlook - The equity rally has been a global affair with participation driven by different dynamics [2] - Global growth is showing positive progression in most key markets, indicating a global reflation and reaceleration [6] - Expectation is to see diversification away from the dollar in terms of reserve positions and central banks over the next couple of years [10] - A correction of 10% pullback is expected over the next 12 months, empirically from these types of levels [14] Earnings and Investment - Earnings continue to come through, underpinning the market progression [3] - Constructive view on earnings continuing through the back end of this year and into next year [4] - Hyperscaler capex is seeing roughly a 50% increase this year, with $350 billion invested in that space and expected to be close to $1 trillion over the next three years [7] - Corporate fundamentals are gaining positive momentum as people get the pass-through of growth [9] Fiscal Policy and Corporate Strategy - There is material change on the fiscal side, with Germany now talking about expansion instead of consolidation [8] - US larger cap companies are showing pricing power to pass through tariff implications to the underlying consumer, keeping margins relatively healthy [12] - Multiples and valuations don't give significant cause for concern, with MAG7 trading in the high 20s and the broad market in the low 20s [14]

Group 1 - Chinese internet regulator advises companies against purchasing Nvidia due to its market dominance, potentially impacting Nvidia's stock performance [1] - Nvidia shares are currently trading around $173.50, reflecting a slight decline of approximately 0.75% [3] - A significant technical level for Nvidia is identified at $155, with a breakdown below this level indicating a more serious decline [2] Group 2 - The Federal Reserve is expected to announce a 25 basis point rate cut, with a 96% probability according to CME traders, while a 50 basis point cut is considered unlikely [4][6] - The Fed's recent focus has shifted from inflation to job growth, indicating a broader economic strategy [5] - Market reactions will depend heavily on the commentary from Fed Chair Powell following the rate decision, with potential disappointment if no further cuts are indicated [6][7] Group 3 - Cyclical sectors such as industrials, materials, and financials have underperformed despite expectations of a rate cut, suggesting a complex market dynamic [8] - The financial sector may benefit from a steepening yield curve, which is anticipated with the upcoming rate cut [9] - There is a belief that mid and small-cap stocks will perform well in the wake of Fed rate cuts, with opportunities identified outside of the major tech stocks [11][12] Group 4 - The addition of companies focused on manufacturing to investment portfolios is seen as a bet on increased capital expenditures driven by potential policy changes [10] - The industrial sector is showing signs of improvement, with expectations for a broader market rally beyond just the major tech companies [12][13]

Market Overview - Approximately 50% of the stocks in the S&P 500 are currently in the green, indicating mixed performance in the market [1] - The S&P 500 has key levels of support at 6,600 and 6,570, with an upside target of 6,640 where call options were heavily traded [2] Volatility and Fed Meeting - The market is experiencing increased volatility as it approaches the Federal Reserve meeting, with a quarterly expiration also contributing to market dynamics [3][4] - The performance of the MAG7 stocks is crucial, as their continued outperformance could mitigate weaknesses in other sectors facing headwinds due to volatility [4] MAG7 Performance - The MAG7 stocks have recently broken out of a consolidation channel, with Tesla's strong performance being a significant driver of this breakout [5][6] - If Nvidia and other MAG7 companies can also break out from their recent consolidations, it could further bolster the S&P 500 [6][7] Broader Market Influences - Oracle's recent positive performance following its earnings announcement and news related to TikTok may provide additional support to broader equities [8] - Attention is drawn to the potential for yields to rise post-Fed meeting, which could pose risks for equities in the short term [9]

Market Trends & Analysis - The S&P 500 and NASDAQ both hit record highs driven by earnings optimism [1] - Foldable phones offer a larger screen, potentially up to 11 inches diagonally, rivaling some tablets, while also being more pocketable when folded [1] - Chinese consumers show strong interest in foldable phones due to established vendor presence and multimedia experience [2] - The US dollar index is underwater by approximately 05% year-to-date, indicating multi-year lows [10] - Ether cryptocurrency is nearing $4,000, testing multi-year range highs [15] Company Performance & Strategy - Apple is reportedly planning to release a foldable iPhone next year, aiming to leverage its marketing capabilities to dominate the market [1] - An IDC survey indicates that 21% of respondents are interested in purchasing a foldable iPhone [1] - Apple's foldable phone could be priced between $1,500 and $2,000, potentially starting at $1,800 to avoid overlapping with ultra-premium iPhone prices [2][3] - Google (Alphabet) is considered undervalued due to antitrust concerns, but its strong position in AI, particularly with Gemini, presents a favorable investment opportunity [22][25] - NXP Semiconductors anticipates an emerging cyclical improvement in its core markets, guiding its Q3 performance [34] Financial Results - Zions Bancorporation reported adjusted net interest income of $661 million in Q2, exceeding estimates, though total deposits missed expectations [35][36] - Steel Dynamics reported a miss on earnings estimates for Q2, with adjusted EBITDA falling short of expectations due to trade policy uncertainty and inventory overhang [36]

Market Overview - A-shares experienced a slight increase, with the Shanghai Composite Index rising by 0.04% to 3,388 points, while the Shenzhen Component Index and the ChiNext Index rose by 0.24% and 0.23% respectively[15] - The Hang Seng Index and its technology sector continued to perform poorly, with the Hang Seng Index dropping by 1.12% and the Hang Seng Tech Index falling by 1.46%[10] - European markets showed mixed results, with the DAX down 0.50% and the FTSE 100 up 0.11%[8] Economic Indicators - The Federal Reserve maintained interest rates at 4.25%-4.5%, with a projected two rate cuts in 2025, reflecting a cautious economic outlook[29] - The U.S. GDP growth forecast for this year was lowered to 1.4%, while inflation expectations were raised, with the PCE forecast set at 3.0%[29] Commodity Prices - International oil prices saw a slight increase, with WTI crude oil rising by 0.4% to $75.14 per barrel and Brent crude oil up by 0.3% to $76.70 per barrel[25] - Gold prices remained stable, reflecting ongoing geopolitical tensions in the Middle East[25] Currency Movements - The U.S. Dollar Index increased by 0.1%, while the dollar appreciated slightly against the Chinese Yuan, trading at 7.189[24] - The Euro to Dollar exchange rate remained stable at 1.148, reflecting a 10.9% increase year-to-date[24] Sector Performance - In the U.S. stock market, 7 out of 11 sectors in the S&P 500 declined, with the energy sector dropping by 0.68%[8] - The technology sector showed resilience, with notable gains in AI-related stocks, indicating a potential rebound in core assets[8] Geopolitical Impact - Ongoing tensions in the Middle East, particularly between Iran and Israel, are causing market volatility and influencing commodity prices, especially oil[25] - Historical analysis indicates that if oil prices rise by over 50% due to conflict, it could trigger a recession in the U.S.[5]

Group 1 - The recent decline in the MAG7 index, which has dropped 13.6% since its peak at the end of 2024, is attributed to factors such as lowered growth expectations, increased inflation forecasts, and reduced spending by major companies like Microsoft [1][12][15] - The MAG7 index has experienced five adjustments since early 2023, with the current adjustment being the fifth, lasting 47 trading days [3][5][16] - The first four adjustments were primarily driven by liquidity shocks, while the fourth and fifth adjustments have been influenced by fundamental issues, indicating a shift in market dynamics [6][19][20] Group 2 - During the fourth and fifth adjustments, there was a noticeable style shift in the market, with technology stocks declining while sectors like utilities and healthcare showed gains [8][30][31] - In response to the adjustments, it is suggested that investors should consider traditional low-beta sectors such as utilities and consumer staples for risk mitigation [8][31] Group 3 - The MAG7 index's performance is closely linked to economic conditions, with high economic growth correlating with higher relative returns [32] - The current economic outlook indicates a potential decline in growth rates, with expectations for 2025 and 2026 showing a decrease from 55.8% to 31.7% and further to 15.6%, respectively [36][37] - The individual stocks within the MAG7 index exhibit varying trends, with companies like Apple and Microsoft expected to maintain stable performance, while others like Nvidia and Amazon may face greater adjustment pressures [38]