Stock Market Update Tuesday October 29, 2024 The Nasdaq reached a new record high today, marking its first peak since July as investors anticipate the upcoming earnings reports from the “Magnificent 7” stocks. The tech-focused index climbed 0.78% on the day, while the S&P 500 edged up 0.16%. Meanwhile, the Russell 2000, a small-cap index, dipped 0.43%, signaling mixed sentiment in broader markets.
After the close, Alphabet released its Q3 earnings report, posting robust results that beat analyst expectations with earnings per share (EPS) of $2.12 and revenue totaling $88.27 billion. This solid performance from Google’s parent company comes amidst significant developments, including executive leadership changes, heightened antitrust scrutiny, and intensified AI competition. The company has navigated a challenging quarter with multiple product launches and ongoing legal battles. Shares reacted positively, moving higher immediately after the release, as investors processed Alphabet's ability to exceed targets amid a complex operational landscape.
Away From Stocks: Treasurys staged a strong intraday rebound following an initial bout of weakness, with yields on the 2-year and 30-year notes each ticking down by one basis point, settling at 4.11% and 4.52%, respectively. In commodities, WTI crude steadied around $67 per barrel, consolidating after recent losses. Gold surged to $2,773 per ounce, signaling heightened safe-haven demand, while Bitcoin rallied toward new highs above $72,000, underscoring robust risk appetite in digital assets. Meanwhile, the VIX, a key measure of market volatility, remained elevated but stable, holding just above 19.

This week’s macroeconomic indicators and earnings reports from the **“Magnificent 7”** stocks are particularly important. Yesterday, Japan hinted at potentially slowing its tightening cycle, aligning with a broader dovish shift among global central banks. This shift was well-received by U.S. markets, with the IWM ETF, a small-cap equity benchmark, rallying yesterday but closing slightly negative today. This recent performance suggests that markets are increasingly optimistic, interpreting the Federal Reserve’s softer tone as supportive of risk assets.
Adding to the market’s focus, four of the Magnificent 7 stocks are set to report earnings starting today. These companies will likely provide insights into sector performance, consumer demand, and future outlooks. As markets respond to both macroeconomic signals and earnings results, investor sentiment appears to be leaning more bullish, positioning markets for potentially favorable moves through the remainder of the week.
This week, over 160 companies are set to release their earnings results, adding significant updates to the ongoing Q3 reporting season. So far, 193 companies, representing 39% of the S&P 500, have already disclosed their earnings, providing a clearer picture of corporate performance. The results show that 77% of these companies have exceeded analyst expectations, with those “beats” showing a median outperformance of 6%. This strong beat rate suggests that many companies have managed costs effectively or experienced better-than-expected demand.
However, not all companies have met market expectations. Around 21% of those reporting have missed earnings estimates, with the shortfall averaging a median of -5%. This variance indicates a mix of results across sectors, with some companies struggling in the current economic climate. In terms of revenue performance, or “top-line” results, the overall trend remains positive, though less pronounced. The median revenue beat stands at 2%, with 58% of companies surpassing revenue targets. Conversely, companies missing revenue targets have done so by a median of -2%, highlighting more moderate discrepancies on the revenue side compared to earnings. Overall, the current earnings season points to resilience among many companies, with stronger-than-expected earnings results and modest revenue outperformance despite broader economic pressures.
Bottom Line:
Our previous pivot date was October 8th, and the SPY rallied for seven trading days to a record high on October 17th. We have a cycle pivot date on October 29th; traders should anticipate increased volatility leading up to this date as market participants position themselves ahead of the upcoming 2024 election. This pattern of sideways, choppy price action is characteristic of October in an election year. The SPY ETF, QQQ ETF, IWM ETF, and DIA have all activated bullish buy signals, with no signs of a market top or imminent reversal. Our year-end outlook remains optimistic, supported by our proprietary algorithm and favorable liquidity conditions. Cash on the sidelines continues to accumulate, creating potential for a strong inflow into equities. Jerome Powell & Co. maintain a dovish stance, reflecting a 'no landing' economic scenario, while China's PBOC has introduced significant monetary easing, adding further global stimulus. Market participants are closely monitoring the upcoming U.S. election results, but we anticipate a favorable market reaction regardless of the outcome, as either candidate is expected to support short-term growth. October's volatility aligns with historical seasonal patterns, yet we believe markets will resume an upward trajectory following the election, paving the way for a strong December rally. The VIX is projected to settle in the 10-11 range, indicating a reduction in implied volatility as we approach the holiday season, which typically supports a risk-on sentiment in equity markets.







