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Tesla down, Netflix up, Google down, Microsoft up... Meta down. Traders are judging the tech earnings season as a mixed bag of results, sending shares of each company in opposite directions after they report quarterly results. One more tech giant, Amazon (AMZN), is set to report this afternoon to round out the week, but markets are still digesting the latest update from the firm once known as Facebook, which is weighing on tech shares and the broader market.

On the move: Meta Platforms (META) initially rose 4% in AH trading on Wednesday, with strong revenues, profits and users all topping forecasts, but the sentiment didn't last long. It reversed course to fall nearly 4% by the end of its conference call, which made several references to "greater uncertainty" and "volatility," especially with regard to the advertising market that still represents most of the company's revenue. Doubts over the macro landscape also led Meta to hold off on a 2024 revenue outlook, while its capex plans for the coming year increased meaningfully, as well as costs associated with infrastructure, payroll expenses, and AR/VR investments as it further scales the metaverse. Meta in charts

"We recognize that we have very ambitious investments on the horizon, including over a long-time horizon with our Reality Labs work and newer, equally ambitious investments we've added in the gen AI road map more recently," CFO Susan Li declared. "And we recognize that we have to earn the ability to invest in all of those things by delivering consolidated operating income growth over time. So that's something we're very much focused on." Reality Labs, the AR/VR division of Meta, posted an operating loss of $3.7B in the latest quarter and has lost $11.5B so far this year. Is Meta the best AI company you didn't know about?

What to watch: The Nasdaq Composite Index (COMP.IND) fell into correction territory on Wednesday following the latest tech earnings. Alphabet (GOOG, GOOGL) plunged nearly 10% for its worst day since the start of the COVID pandemic in March 2020, while the 10-year Treasury yield moving back to the 5% level didn't help the situation. The Nasdaq had a bumper year until the middle of the summer, when the Fed began messaging that interest rates could stay higher for longer, but investors can still ring the register with a gain of 23% YTD.

New speaker

The odds of a government shutdown next month may be lower with the election of new U.S. House Speaker Mike Johnson, which comes more than three weeks after the ouster of Rep. Kevin McCarthy (R-CA). Johnson is expected to back a stopgap measure that funds the government at current levels till either Jan. 15 or April 15 while Congress works on reaching a consensus on 12 spending bills. Note that Johnson voted against the temporary bill that previously averted a shutdown. The "shutdown risk is still probably 20%-30%, but it's much less than it was a couple of weeks ago," said Pangaea Policy founder Terry Haines. (2 comments)

Tentative deal

It looks like the devastating auto strike may be nearing its end, as Ford Motor (F) and the UAW union reached a tentative agreement to end a six-week-long walkout. The deal includes a 25% general wage hike over four years, and may become the template to resolve negotiations with other Detroit automakers including General Motors (GM) and Stellantis (STLA). The next step is for UAW National-Ford Council leadership to meet on Oct. 29 on whether to send it to members for final approval. Investing Group Leader David Alton Clark believes Ford is stuck in a lose/lose situation, given the strike’s impact on its profit and rising costs if it agreed to the UAW’s “unrealistic” demands. (70 comments)

Economic landing

Driven by resilient consumer spending, the U.S. economy likely grew sharply during Q3, although economists expect a slowdown ahead given "higher-for-longer" interest rates. U.S. gross domestic product is expected to have risen 4.3% in Q3, more than double from the 2.1% pace seen in Q2. The sharp growth expectation was cemented by the latest retail sales report, which came in much stronger than expected, though upcoming risks include cooling consumer spending, a looming government shutdown, and ongoing geopolitical turmoil. "While investors seem to be pricing a soft landing, history is not on their side," cautioned Investing Group Leader Fear & Greed Trader. (10 comments)

Today's Markets

In Asia, Japan -2.1%. Hong Kong -0.2%. China +0.5%. India -1.4%.
In Europe, at midday, London -0.7%. Paris -0.8%. Frankfurt -1.5%.
Futures at 7:00, Dow -0.4%. S&P -0.6%. Nasdaq -0.9%. Crude -1.5% to $84.15. Gold +0.1% to $1,997. Bitcoin +0.1% to $34,279.
Ten-year Treasury Yield +1 bp to 4.96%.

Today's Economic Calendar

8:30 Durable Goods
8:30 GDP Q3
8:30 Initial Jobless Claims
8:30 International Trade in Goods (Advance)
8:30 Retail Inventories (Advance)
8:30 Wholesale Inventories (Advance)
9:00 Fed’s Waller's Speech
10:00 Pending Home Sales
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
1:00 PM Results of $38B, 7-Year Note Auction
4:30 PM Fed Balance Sheet

Companies reporting earnings today »

What else is happening...

Bill Ackman made $200M from his bet against 30-year Treasuries.

Cruise losing its California license could have big ramifications.

Morgan Stanley (MS) veteran Ted Pick named as CEO successor.

Honda (HMC) calls off affordable EV development with GM (GM).

IBM (IBM) gains after strong results, free cash flow outlook boost.

Mattel slides as Barbie boom fails to meaningfully raise outlook.

Boeing (BA) trades sideways as planemaker posts mixed results.

Endeavor (EDR) soars as Silver Lake weighs take-private offer.

UPS to buy reverse logistics firm Happy Returns from PayPal.

Rocket Lab (RKLB) bags FAA authorization to resume launches.

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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