Humanoids the next big thing after robotaxis? 18/10/2024

HOT stories for today
18.10.2024.
 

Alphabet or Microsoft?

• As traders often look to buy stocks ahead of an earnings "run," the question arises: which is the better bet, Microsoft or Alphabet? Alphabet reports earnings on Oct. 29, followed by Microsoft on Oct. 30. Despite Google’s parent outperforming earlier this year, Microsoft may be the safer option heading into results. Alphabet faces concerns over capital spending, regulatory challenges, and competition in the AI space, which has dragged its stock down from its highs.
• Microsoft, on the other hand, is benefiting from its strong growth in cloud computing through Azure and its AI investments. While both stocks carry risks, Alphabet’s regulatory pressures and capital spending concerns make it the riskier play right now, with Microsoft potentially offering more upside.

Stocks on the move:

• Netflix (NFLX): The streaming giant surged over 4% after posting better-than-expected third-quarter earnings. Netflix reported $5.40 earnings per share on $9.83 billion in revenue, beating forecasts of $5.12 per share and $9.77 billion in revenue. The company also noted a 35% quarter-over-quarter increase in its ad-tier memberships.
• Intuitive Surgical (ISRG) Shares climbed around 5% following strong third-quarter results. The maker of the da Vinci surgical robot posted earnings of $1.84 per share on $2.04 billion in revenue, exceeding analyst expectations of $1.63 per share on $2 billion in revenue.
• WD-40 (WDFC) Shares dropped over 4% after the company's fiscal fourth-quarter earnings disappointed. WD-40 reported earnings of $1.23 per share and forecasted fiscal 2025 profits between $5.20 and $5.45 per share, falling short of investor expectations.

Watchlist for today: NFLX, ISRG, PG, AXP, ALLY, SLB, CMA

Markets & today's action:

• Mainland China's CSI 300 rose 0.7%, while Hong Kong’s Hang Seng index gained 1.3% following China's report of third-quarter GDP growth at 4.6%, slightly exceeding expectations.  Meanwhile, European markets opened mixed on Friday as investors digested the European Central Bank’s recent consecutive rate cuts and awaited fresh economic data and corporate earnings reports.
• Dow Jones Industrial Average futures were nearly flat on Thursday night, following the blue-chip index's record close in the previous session. Futures tied to the 30-stock index dipped by 28 points, while S&P 500 and Nasdaq 100 futures saw minimal movement.
• On Friday, investors will monitor key economic data, including housing starts and building permits. Additionally, remarks from central bank officials like Atlanta Fed President Raphael Bostic and Minneapolis Fed President Neel Kashkari will be closely monitored. Earnings reports from American Express and Procter & Gamble are also expected before the market opens, drawing further attention to the trading day.

Bitcoin

• Bitcoin briefly surged above $68,000 on Oct. 16, its highest level since August, but struggled to maintain that momentum, now trading below $67,500. The main question is whether Bitcoin can reclaim its bullish trend. Stronger-than-expected U.S. economic data has reduced demand for alternative assets like Bitcoin, while strong earnings from TSMC have shifted attention to the stock market.
• However, Bitcoin could still surge if oil and energy prices spike amid Middle East tensions. In periods of geopolitical uncertainty, investors often look to Bitcoin as a hedge against inflation and market volatility. With rising energy prices, Bitcoin's decentralized nature and scarcity may attract more investors, potentially driving its price higher, but it remains to be seen if this will be enough to reignite its bullish momentum.
  Watchlist: Bitcoin: 66,500-68,600, Ethereum: 2540-2740, Solana: 147.60-160.60

Forex

• The USD/JPY weakened to near 150.00 following the release of Japan's September CPI inflation data, which showed an annual increase of 2.5%, down from 3.0% in August. While the slowdown in price gains suggests some easing of inflationary pressures, it is unlikely to significantly alter the Bank of Japan's (BoJ) policy trajectory.
• The EUR/USD pair snapped its four-day losing streak, trading near 1.0840 during Friday's Asian session. Meanwhile, the US Dollar (USD) hit a two-month high of 103.87 on Thursday, bolstered by robust US Retail Sales data. This report has increased expectations for the Federal Reserve (Fed) to opt for nominal rate cuts shortly.
   Whatchlits: EUR/USD: 1.0813-1.0900, USD/JPY: 147-150.50

Basic Materials

• Oil prices declined this week, impacted by weak economic data from China and downgraded oil demand forecasts from the IEA, OPEC, and EIA. These organizations predict slower oil demand growth for 2024 and 2025, although they have a history of forecasting errors. Despite concerns over reduced demand and increased non-OPEC supply, oil demand, particularly from China, remains robust, suggesting that the market may still find support in the near term.
• Gold surged past $2,700 an ounce for the first time, driven by growing concerns over escalating conflicts in the Middle East and uncertainty surrounding the tight U.S. election race. Investors are seeking safe-haven assets amid the heightened geopolitical and political risks.
  Watchlist: GOLD 2715-2600, US Oil: 69.50-72.50

The TEFS Analyst team wishes you a successful day!