Nasdaq heads for record close as investors await Alphabet earnings

Yahoo Finance’s Hamza Shaban reports:

Alphabet (GOOG, GOOGL) is set to release quarterly results after the bell on Tuesday, kicking off a big earnings week for US tech giants after a wobbly run on Wall Street.

The company is expected to offer updates on its efforts to turn massive artificial intelligence investments into new revenue streams and its position in the massive digital ad market.

Here’s what Wall Street is expecting for some of Alphabet’s most significant metrics in the company’s fiscal third quarter, according to Bloomberg data:

Last year, Google was widely seen as playing catch-up to Microsoft (MSFT), which was among the first in the tech world to reap the cultural excitement around consumer AI chatbots.

But in the quarters since, Google has attempted to advance its own leadership position. Earlier this month, Alphabet CEO Sundar Pichai sent a note to employees outlining another internal reorganization, shifting personnel to prioritize AI development.

Read more here.

Gold climbed to a new high on Tuesday while silver also rallied as investors went long on metals amid US election uncertainty and Wall Street’s expectations of lower interest rates.

Gold futures (GC=F) rose as much as 0.8% to hover near highs of $2,770 per ounce while spot gold inched to a record north of $2,759. Silver futures (SI=F) gained more than 1% to top $34.50 per ounce, levels not seen in over a decade.

“It’s very clear that they’ve [gold and silver] experienced a high degree of momentum in recent weeks and months,” Chris Vecchio, global co-head of macro at trading platform Tastylive, told Yahoo Finance.

“We are really in the early innings still of a multiyear shift towards precious metals,” he added.

Read more here.

Music to Spotify’s ears: The stock has reached another all-time high.

The company gained over 3% Tuesday to trade at around $395 a share. It’s on track to close at a record high.

It’s been quite the comeback story for Spotify, which spent $1 billion pushing into the podcast market over the past four years with splashy A-list deals and $400 million-plus studio acquisitions.

That spending took a significant bite out of gross margins and weighed heavily on profitability. After its stock plunged in 2022, the audio giant pledged to improve its profitability beginning in 2023 on a gross margin and operating income basis. It’s since delivered on those promises.

The stock has surged as a result, with shares gaining more than 110% since the start of the year and up about 150% on a yearly basis.

Wells Fargo (WFC) recently named Spotify a top pick, maintaining an Overweight rating and raising its price target on shares to $470 from the prior $420.

Broadcom stock (AVGO) jumped as much as 4% following reports that Microsoft’s OpenAI (MSFT) is joining forces with the chipmaker and contract manufacturer Taiwan Semiconductor Manufacturing Co. to develop its first in-house chip, which will support OpenAI’s artificial intelligence systems.

According to Reuters, OpenAI, the company behind ChatGPT, still plans to use Nvidia (NVDA) and AMD (AMD) chips to satisfy demand. But the news underscores the push to find alternatives to Nvidia, which has dominated the chip space in recent years.

Broadcom, a top ten stock in the S&P 500, helped push the index higher in afternoon trading.

Buyers are hitting the pause button amid higher mortgage rates and election uncertainty, according to the largest US homebuilder.

“I don’t think this is a structural issue with demand. There’s just a lot of noise in the market today. The rate of volatility we’ve seen, combined with the election news that’s out there, I just think we’re seeing people take a pause,” Paul Romanowski, CEO of DR Horton (DHI), told analysts and investors on the company’s fourth quarter earnings call Tuesday morning.

The company said it expects to close 90,000 to 92,000 home sales during its 2025 fiscal year, lower than the consensus estimate of 94,653, per Bloomberg data. DHI expects revenue of $36 billion to $37.5 billion for the year, below analyst estimates of $38.65 billion.

The forecast sent DHI stock down more than 9%.

DHI also missed analyst estimates on EPS and revenue in Q4 in the three months ending September.

Mortgage rates started to move lower in September as the Federal Reserve cut its benchmark rate by half a percentage point. However, mortgage rates recently have been rising as traders reassess their expectations on how aggressively the Fed will cut interest rates.

Consumer confidence shot higher in October, hitting a reading of 108.7, up from 99.2 in September. This marked the largest monthly gain in confidence since March 2021, per the Conference Board.

Economists surveyed by Bloomberg had expected consumer confidence to fall to 98.7 in October.

The large uptick in confidence came as consumers digest recent signs that the US economy remains on solid footing.

Consumers’ perceived likelihood of a US recession over the next year hit the lowest level since the Conference Board began asking the question in June 2022. In October, less than 65% of respondents said a recession in the next 12 months was “somewhat or very likely,” down from the more than 66% seen in September.

Tech (XLK), Communication Services (XLC), and Industrials (XLI) led Tuesday’s sector action, with markets trading mixed as traders assessed new jobs data and a slew of earnings reports.

Oil prices were a standout, with WTI crude (CL=F) falling for the second straight session to trade above $67 a barrel. Brent crude (BZ=F), the international benchmark, also fell to trade just below $71 a barrel.

As a result, Energy (XLE) was one of the day’s biggest laggards, along with Utilities (XLU) and Real Estate (XLRE).

Bitcoin prices (BTC-USD) rose around 5% on Tuesday to surpass a key technical level and hover just below $72,000 per token, the highest since early June.

The moves come as US spot bitcoin ETFs posted $472.6 million in inflows on Monday, extending gains seen last week.

Crypto-related stocks also rose in tandem, with Mara Holdings (MARA), MicroStrategy (MSTR), and Riot Blockchain (RIOT) all gaining, jumping roughly 2%, 1%, and 4%, respectively.

McDonald’s beat earnings expectations in the third quarter, but Wall Street remains hyper-focused on its recent E. coli outbreak. Shares are up a little over 1% in early trading.

Yahoo Finance’s Brooke DiPalma has more:

Since Q3 ended on Sept. 30, the effects of the outbreak will be seen in Q4 results. Executives indicated it won’t have a material impact on the business.

So far, the E. coli outbreak has left 75 people infected and one person dead across 13 states. On Sunday, McDonald’s announced it will resume distribution of fresh beef patties this week to all restaurants after the Colorado Department of Agriculture ruled out that Quarter Pounder patties were the source of the E. coli contamination, leaving onions as the potential culprit.

Burger King (QSR) preventively removed onions from 5% of its restaurants despite no reported illnesses. Yum! Brands (YUM) also removed fresh onions from select Taco Bell, Pizza Hut, and KFC restaurants “out of an abundance of caution,” a spokesperson told Yahoo Finance.

McDonald’s CEO Chris Kempczinski said he believes the “swift and decisive actions” McDonald’s took should help reinforce consumer trust.

Investor sentiment, though, is mixed as bears home in on “uncertainty” around the “food safety fallout,” per a note from TD Cowen analyst Andrew Charles before the results. Meanwhile, bulls are encouraged by the relaunch of the McRib in December, a new national value platform in January, and chicken strips and wraps coming in May or June 2025.

Job openings fell more than expected in September. The data comes as investors closely watch for signs of further cooling in the labor market ahead of the Federal Reserve’s next interest rate decision on Nov. 7.

New data from the Bureau of Labor Statistics released Tuesday showed there were 7.44 million jobs open at the end of September, a decrease from the 7.86 million seen in August.

August’s figure was revised lower from the 8.04 million open jobs initially reported. Economists surveyed by Bloomberg had expected the report to show 8 million openings in September.

Also in Tuesday’s data, the quits rate a sign of confidence among workers, fell to 1.9% in September down from the revised 2% seen in August. Meanwhile, the Job Openings and Labor Turnover Survey (JOLTS) showed 5.55 million hires were made during the month, up from 5..43 million seen in August. The hiring rate hit rose slightly to 3.5% in September, up from the 3.4% seen in August.

Ford Motor (F) stock dropped over 9% early Tuesday after the automaker lowered its full-year profit forecast the day before, citing high warranty costs and supplier disruptions.

Ford lowered its full-year profit forecast. The automaker now expects 2024 adjusted EBIT “to be about $10 billion,” which is at the lower end of its previous projection of $10 billion to $12 billion.

The automaker said “supplier disruptions,” in part due to the effects of hurricanes on the southeastern US, impacted sales of its Ford Pro and Ford Blue vehicles.

Additionally, “costs, especially warranty, has held back our earnings power, but as we bend that curve, there is significant financial upside for investors,” Ford CEO Jim Farley added on the analyst conference call.

Ford shares are still up more than 3% from last year, when a strike by the United Auto Workers union cost the company an estimated $1.3 billion.

Meanwhile, rival General Motors (GM) stock is up nearly 8% from last week as the company raised its profit forecast for the third time this year during its third quarter earnings report last week.

Read the full story here.

Trump Media & Technology Group stock (DJT) was briefly halted in early trading on Tuesday after shares extended their five-week surge, rising around 10% shortly after the opening bell. The stock moves come as investors bet on improved chances of Donald Trump winning the November presidential election.

Shares closed up more than 21% on Monday, following the former president and Republican nominee’s highly criticized rally at Manhattan’s Madison Square Garden (MSG) over the weekend. At current levels, the stock is trading at its highest level since May, with shares up about 270% from their September lows.

Trump maintains a roughly 60% interest in DJT. At current levels of above $52 a share, Trump Media boasts a market cap of about $10.3 billion, giving the former president a stake worth around $6.2 billion.

Read more here.

US stocks opened lower on Tuesday as investors digested a fresh crop of earnings and awaited results from Alphabet (GOOG, GOOGL), due after the bell.

The Dow Jones Industrial Average (^DJI) fell about 0.3%, coming off a sharp gain after all the gauges closed higher on Monday. The benchmark S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) also each dropped around 0.3% at the market open.

US home prices hit another record high in August, but the pace of price increases is easing.

On an annual basis, the S&P Case-Shiller National Home Price Index increased 4.2%, down from the 4.8% gain seen in July.

“Home price growth is beginning to show signs of strain, recording the slowest annual gain since mortgage rates peaked in 2023,” Brian D. Luke, S&P’s head of commodities, real and digital assets, said in a press release.

Prices rose 0.3% over the prior month in August on a seasonally adjusted basis. This marked the 15th consecutive monthly increase and an all-time high for the index.

The index tracking home prices in the 20 largest metropolitan areas gained 0.4% in August from July, higher than Bloomberg consensus estimates 0.2% monthly increase. Meanwhile, the 20-city index jumped 5.2% compared to last August.

“As students went back to school, home price shoppers appeared less willing to push the index higher than in the summer months. Prices continue to decelerate for the past six months, pushing appreciation rates below their long-run average of 4.8%,” Luke added.

Another batch of companies reported earnings Tuesday morning. Here’s a quick rundown:

Here’s a look at how the companies performed this morning relative to Wall Street’s expectations, using Bloomberg consensus estimates:

Novartis: Adjusted basic earnings per share of $2.06 vs. $1.94 expected, revenue of $12.82 billion vs. $12.68 billion expected

McDonald’s: Adjusted diluted earnings per share of $3.23 vs. $3.20 expected, revenue of $6.87 billion vs. $6.81 billion expected

HSBC: Adjusted diluted earnings per share of $0.34 vs. $0.30 expected, net revenue of $17.21 billion vs. $16.14 billion expected

Pfizer: Diluted earnings per share of $1.06 vs. $0.64 expected, revenue of $17.7 billion vs. $15.08 billion expected

BP: Adjusted diluted earnings per share of $0.14 vs. $0.13 expected, revenue of $47.25 billion vs. $46.16 billion expected

PayPal: Adjusted diluted earnings per share of $1.20 vs. $1.07 expected, revenue of $7.85 billion vs. $7.89 billion expected

Google (GOOG) parent Alphabet, AI chipmaker Advanced Micro Devices (AMD), Visa (V), and Chipotle (CMG) are among the round of companies set to report earnings after the bell.

Economic data: S&P CoreLogic 20-city year-over-year NSA, (August); Conference Board consumer confidence, (October); JOLTS job openings, (September); Dallas Fed services activity, (October)

Earnings: Alphabet (GOOGL, GOOG), AMD (AMD), BP Oil (BP), Chipotle (CMG), Crocs (CROX), McDonald’s (MCD), JetBlue (JBLU), PayPal (PYPL), Pfizer (PFE), Reddit (RDDT), Royal Caribbean Group (RCL), Snap (SNAP), Sofi (SOFI), Visa (V), D.R. Horton (DHI)

Here are some of the biggest stories you may have missed overnight and early this morning:

McDonald’s beats on revenue as US sales shine

CEOs are saying this is as bad as it gets for their earnings

Weather-hit jobs report shows truth of economic data

Pfizer raises profit forecast after beating Q3 estimates

Apple exports $6B of iPhones from India in big China shift

Boeing raises $21B in capital hike to boost cash pile

Trump calls Biden’s chips act ‘so bad.’ Harris cites its good work.