Good morning. It's October 24th, and today we'll take a look at a slew of positive news as Hasbro, UPS, and Tesla are all rising in premarket trade after posting positive earnings. | |
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| Previous Close 📈 | | Stocks continued their decline on Wednesday, with the Dow dropping more than 400 points, the S&P 500 falling 0.92%, and the Nasdaq Composite slipping 1.6%. Rising 10-year Treasury yields are also contributing to the recent pressure on stocks. | Futures | Futures are showing slight gains this morning. S&P 500 futures are up 0.25%, Nasdaq 100 futures have risen 0.56%, while Dow futures are down 42 points (0.1%). Investors are awaiting earnings reports from major companies like United Parcel Service, Honeywell, and American Airlines, as well as economic data on weekly jobless claims and new home sales. | |
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| | | What to Watch | Several prominent companies will announce their quarterly earnings in the premarket session today, including S&P Global (NYSE: SPGI), Union Pacific (NYSE: UNP), Honeywell International (NYSE: HON), KKR & Co (NYSE: KKR), United Parcel Service (NYSE: UPS), Northrop Grumman (NYSE: NOC), and Carrier Global (NYSE: CARR). | The Initial Jobless Claims for October will be released at 8:30 a.m. ET, followed by the S&P Flash U.S. Services PMI and Flash U.S. Manufacturing PMI for October at 9:45 a.m. ET. New Home Sales data for September will be published at 10:00 a.m. ET, providing further insights into the housing market. | After the market closes, Arthur J. Gallagher & Co. (NYSE: AJG), Capital One Financial (NYSE: COF), and Digital Realty Trust (NYSE: DLR) will report their results. |
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| | Toys | Hasbro Shares Rising 6% as Cost-Savings Offset Sales Slump | | Hasbro reported a steeper-than-expected drop in sales for the third quarter as consumer spending on toys continues to tighten. Despite this, the company's rigorous cost-saving measures helped increase profit margins. | Hasbro is up 5% in premarket trading. Overall, the stock has surged nearly 38% year-to-date. | The company's adjusted profit margin for the quarter reached 25.7%, up from 22.8% last year. Revenue, however, fell for the ninth consecutive quarter to $1.28 billion, missing the expected 13.8% decline to $1.30 billion, according to LSEG data. | Hasbro is now projecting a full-year revenue decline of 12% to 14% in its consumer products segment, worse than its previous forecast of a 7% to 11% drop. | Despite the challenges, the company remains focused on cost-saving initiatives, following the trend of rival Mattel, which also reported better-than-expected profits this week while adjusting its full-year sales outlook ahead of the holiday season. | Hasbro continues to navigate a difficult market, with consumer demand for toys remaining soft as economic pressures persist. |
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| | Logistics | UPS Shares Surging Upon First Revenue and Profit Growth in 18 Months | | United Parcel Service (UPS) reported its first profit and revenue growth in nearly two years, benefiting from increased daily volumes, better pricing, and reduced labor costs. | The company's adjusted third-quarter earnings reached $1.76 per share, surpassing analysts' expectations of $1.63 per share, while revenue aligned with estimates at $22.2 billion. | UPS attributed its 6.5% increase in average daily U.S. volume and new USPS air cargo agreements as key drivers of growth. The company also benefited from stabilizing labor costs following the one-year anniversary of its contract with the Teamsters union. | However, despite the positive quarter, UPS lowered its full-year revenue forecast to $91.1 billion, down from previous projections of $93 billion. | The company has also been impacted by a shift towards cheaper shipping options as inflation-conscious customers opt for more economical solutions like its SurePost service. | UPS shares are surging 6% in premarket trading today, reflecting optimism after a challenging period marked by six consecutive quarters of declining earnings. | The company is also working to streamline operations by cutting 12,000 management jobs as part of a $1 billion cost-saving plan. |
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| | Automobiles | Tesla Beats Profit Estimates, Shares Rising 12% on Musk's 2024 Growth Outlook | | Tesla shares are soaring 12% in premarket trade today after the company reported third-quarter earnings that surpassed Wall Street expectations. | The electric vehicle giant posted adjusted earnings of 72 cents per share, beating estimates of 58 cents, while revenue came in at $25.18 billion, slightly below the forecasted $25.37 billion. | CEO Elon Musk made headlines during the earnings call, predicting that Tesla's vehicle growth could reach 20% to 30% next year, driven by lower-cost vehicles and advancements in autonomy. | Musk also revealed Tesla's plans to produce 2 million Cybertrucks annually and introduce driverless ride-hailing services in Texas and California by 2025. | In the quarter, Tesla's automotive revenue increased 2% to $20 billion, while energy generation and storage revenue surged 52%. Despite challenges like rising competition from U.S. automakers and Chinese rivals, Tesla delivered 462,890 vehicles during the quarter. | Musk also highlighted Tesla's ongoing push into autonomous driving, noting that the majority of the 7 million cars produced are capable of autonomy. While Tesla is not yet authorized for driverless ride-hailing, Musk hinted at exciting developments on the horizon. | Shares had been down 18% in October prior to this jump. |
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| | Fitness Goods | Peloton Rallies 11% After Einhorn Declares Company Undervalued at Investor Conference | | Shares of Peloton climbed over 11% yesterday following comments from hedge fund manager David Einhorn, who expressed that the company's stock is significantly undervalued. | Einhorn, founder of Greenlight Capital, made these remarks while speaking at the Robin Hood Investors Conference. Though he did not specify what he believed the stock should be worth, his endorsement triggered the stock's sharp rise. | This comes shortly after Greenlight Capital revealed a $6.8 million stake in Peloton as of June 30. Einhorn's comments arrive just a day after Peloton announced a new partnership with Costco to sell its high-end Bike+ in stores and online, targeting younger and affluent customers. | Peloton, known for its volatility, had been up just over 1% for the year before today's rally. The company is also in the process of selecting a new CEO after the departure of Barry McCarthy earlier this year, with two board members currently steering the business. | In its latest earnings report, Peloton emphasized a renewed focus on profitability after completing a large refinancing to stabilize its financial situation. |
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| | | | Movers and Shakers | | Tevogen Bio Holdings [TVGN] - Last Close: $2.48 | Tevogen Bio's stock is up 31% in premarket trade today. | The firm's AI division, Tevogen AI, has joined Microsoft's "Microsoft for Startups" program. | This partnership gives Tevogen access to Microsoft's cutting-edge AI technology, which will help accelerate drug development. | The collaboration is a significant step toward advancing Tevogen's mission to innovate in the biotech space, particularly in developing therapies for diseases like cancer and infectious illnesses. | My Take: This is a tiny stock that hasn't had a great track record but has been taking off for the past two weeks after releasing a strong 1-year and 5-year forecast recently. It might be best to keep this on your radar for future growth. |
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| MediciNova [MNOV] - Last Close: $1.73 | MediciNova is up 15% during premarket trading. | The firm has given a promising update on its Phase 2/3 clinical trial of MN-166 (ibudilast) for treating ALS (amyotrophic lateral sclerosis). | The trial update highlighted significant progress and the inclusion of NIH funding to expand access to the treatment. | MN-166 is a drug in late-stage development targeting neurodegenerative diseases like ALS and multiple sclerosis. | My Take: Investors are excited about the potential of this drug, especially with additional support from government funding, which boosts confidence in its future success and commercial viability. Keep your eye on this one. |
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| QuantumScape [QS] - Last Close: $5.18 | QuantumScape shares are up 17% in premarket trading. | The firm released positive updates on its battery technology progress yesterday. It announced that it has started producing and shipping B-sample cells of its first product, QSE-5, for testing by automotive customers. | These cells have impressive features, like high energy density and fast-charging capability, making them suitable for next-generation electric vehicles. | This milestone is significant because QuantumScape is developing solid-state lithium-metal batteries, which are seen as a game-changer for electric cars. | Investors are optimistic about the potential of this breakthrough, driving the stock higher. | My Take: EV and anything related to that is a hot sector to be in right now. Keep your eyes on this one as more results come out on the progress of its solid-state lithium-metal batteries. |
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| | | | Everything Else | Increased defense spending worldwide drives Northrop Grumman to boost profit expectations again. Valero beat profit expectations despite a sharp drop in refining margins. Weak U.S. demand led Harley-Davidson to slash revenue forecast, and its shares are dropping as a result. Barclays saw strong Q3 performance, upgrading its forecast amid a strategic overhaul. The Boeing strike continues as machinists reject a 35% wage increase in a new contract. China's 2024 growth outlook was downgraded by IMF amid deepening real estate woes. SK Hynix has seen continued growth in AI memory sales and posted a record quarterly profit. The Indian PM urged BRICS to focus on reforming global institutions, not replacing them. SF Express plans a $1-billion Hong Kong listing, working with Goldman Sachs and JPMorgan. IBM sees a decline in consulting and infrastructure revenue, impacting third-quarter results.
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| | That's all for today. Thank you for reading. If you have any feedback, please reply to this email. | Best Regards, | — Adam Garcia
Elite Trade Club |
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