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At 2.8%, GDP growth misses estimates but maintains strong trend for the economy
The U.S. economy grew at a 2.8% annualized rate in the third quarter, the Bureau of Economic Analysis reported today. The growth rate was down slightly from 3.0% in the second quarter. Economists had projected 3.1% growth. GDP has now climbed for 10 straight quarters.
No consumer slowdown visible as confidence numbers blast through projections
The Conference Board’s gauge of confidence jumped 9.5 points to 108.7, the highest level since the start of the year, data released Tuesday showed. The median estimate in a Bloomberg survey of economists called for a reading of 99.5. The month to month increase was the biggest since March 2021.
Another bad day for bonds–10-year Treasury yield hits 4.28%
Yields rose and bond prices dropped again today as weak demand in a pair of Treasury note auctions suggested investors are anxious about supply on the eve of the next financing quarter. For the day, the yield on the benchmark 10-year Treasury rose 4 basis points to a yield of 4.28%. The yield on the 10-year Treasury is now up 53 basis points in the last month.
This is a crucial week for earnings from the Magnificent 7–and for market leadership
Right now the Magnificent 7 stocks that have provided so much of the leadership in this huge rally look like they will show slowing earnings growth when they–Amazon, Apple, Alphabet, Meta Platforms, and Microsoft are up this week–report in the next few days.
A new pick–TSM–for my Special Report “10 Trump and 10 Harris winners”
Last night I added a third potential Harris election victory winner to my Special Report “10 trump and 10 Harris winners. Here’s what I wrote about Taiwan Semiconductor Manufacturing (TSM) in that post.
Saturday Night Quarterback (on a Sunday) says, For the week ahead expect…
The week will bring Big Tech earnings reports and more earnings reports. All capped on Friday with the October jobs report, the last one before the November 7 meeting of the Federal Reserve on interest rates. (Which means that the Fed will be in its blackout period before the meeting–so no Fed speeches.) And, just for good measure, third quarter GDP figures are due Wednesday, October 30, and PCE inflation numbers are scheduled for Thursday, October 31.
Is a guidance cut from Texas Instruments another sign of a top?
One indicator that I’m carefully monitoring is the guidance in third quarter earnings conference calls about the fourth quarter. I’m checking to see if the cuts to guidance and that Wall Street disappointment might set in a quarter early. If that looks like the case then I’d think about selling now instead of in January 2025.
Starbucks, caught in a hard place between sugar and caffeine, slumps again
Starbucks (SBUX) today pulled revenue and earnings guidance for 2025 after fiscal forth quarter sales fell. It is the third consecutive quarterly sales decline.
Climb in yield on 2-year Treasury says bond market is rethinking rate-cut trajectory
Two-year Treasury yields have climbed 34 basis points since the Federal Reserve reduced interest rates on September 18 for the first time since 2020. Rising yields “reflect the reduced probability of recession risks,” Steven Zeng, an interest rate strategist at Deutsche Bank told Bloomberg. “Data has come in pretty strong. The Fed may slow the pace of rate cuts.” We’ve read this story before
Making West Pharmaceutical Pick #5 in my Special Report 10 New Ideas for an Old Rally
Here’s what I wrote today when I added this stock to my Special Report.
What’s an AI search company startup worth? How about $9 billion? Or maybe $157 billion?
Perplexity AI, an artificial intelligence company building a search product to compete with Google search, is in early talks to raise private-round venture capital at a valuation of about $9 billion, Bloomberg reports.
Pick #4 in my Special Report 10 New Stock Ideas for an Old Rally–AAL
Today I added American Airlines Group as Pick #4 in my Special Report 10 New Stock Ideas for an Old Rally. Here’s what I wrote.
Saturday Night Quarterback (on a Sunday) says, For the week ahead expect…
Amazon’s (AMZN) earnings report on Thursday, October 24, will start the Big Tech Earnings Parade off with a bang. Wall Street analysts are expecting the company to report earnings of $1.14 a share for the third quarter. That would be up from 85 cents a share in the third quarter of 2023. That would be a 34% jump in year over year earnings. Which would certainly be a great lead in to earnings from Alphabet (GOOG), Apple (AAPL), Microsoft (MSFT) and Meta Platforms (META) the following week.
Tesla has more self-driving problems
The National Highway Traffic Safety Administration (NHTSA) has opened a new investigation into Tesla’s (TSLA) self-driving (FSD) technology over reports of four crashes where FSD software was engaged in an “area of reduced roadway visibility conditions.” Reduced roadway visibility includes conditions like sun glare, fog, or airborne dust.
China tries same old medicine again to address sluggish growth
Minutes after the release of government data that showed the economy grew at just a 4.6% year over year rate in the third quarter (the official target is 5% growth), the People’s Bank of China announced new measures to support the country’s financial markets. People’s Bank Governor Pan Gongsheng flagged the real estate and stock markets as key challenges in the economy that require targeted policy support. the 4.6% growth rate is the slowest pace in six quarters.
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