The big news on Tuesday was that gold declined by over 5%, which was the biggest daily decline in over 12 years. This was merely a technical correction in gold after an incredible 50% surge this year. Although the gold stocks I recommend corrected sharply on Tuesday, I expect them to rebound sharply in the upcoming day because all are expected to post spectacular sales and earnings.
To reiterate, the gold stocks I recommend are: Agnico Eagle Mines (AEM), Alamos Gold (AGI), Coeur Mining (CDE), Caledonia Mining (CMCL), Eldorado Gold (EGO), Idaho Strategic Resources (IDR), Kinross Gold (KGC), New Gold (NGD), OR Royalties (OR), and SSR Mining (SSRM).
Speaking of earnings, through Tuesday, 78 stocks in the S&P 500 have reported their third-quarter results. So far, earnings have increased a whopping 14.9% and posted a 7.4% average earnings surprise. General Motors (GM) and 3M (MMM) both posted impressive earnings surprises and raised their guidance. According to Bloomberg, this is the strongest start to an earnings announcement season in four years. The good earnings tend to be announced early, and the analyst community is expecting 11% earnings growth for the remaining stocks in the S&P 500.
This is just one reason why the second half of October is seasonally strong. The other reason is that the holidays are fast approaching, and since the holidays are a happy time of year when we all get together with family and friends, this positive sentiment tends to boost investor sentiment.
Thanks to the data center boom, GE Vernova (GEV) announced that its third-quarter revenue rose 12% to $9.97 billion compared to the same quarter a year ago. During the past four quarters, the company’s earnings soared to $453 million or $1.63 per share compared to a loss of $99 million or 35 cents a year ago. The analyst community was expecting revenue of $9.15 billion and operating earnings of $1.72 per share, so the company posted a 9% earnings surprise and a 26.2% earnings surprise.
GE Vernova’s orders soared 55% in the third quarter to $14.6 billion due to strong demand for natural gas turbines for electricity generation. CEO Scott Strazik said, “This era of increased electricity investment has just started, and we have a substantial opportunity ahead of us as we provide the solutions required to help the world electrify to thrive and decarbonize.”
The 10-year Treasury bond remains below 4% and yields have softened all across the yield curve, so the Fed is expected to cut key interest rates at their FOMC meetings on October 29th and December 10th. I suspect the Fed will also continue to cut key interest rates in 2026, since I am expecting global interest rates to continue to collapse, as Asia and Northern Europe remain in a recession, due largely to aging demographics and shrinking households.