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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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