Trick or Trade

🎃 Spooky earnings season arrived early for Super Micro Computer, with shares plunging over 30% after a surprise twist—Ernst & Young walked away as their auditor. Meanwhile, chip stocks took a tumble, overshadowing strong results from tech titans Microsoft and Meta.

⚡ Closing Bell:

• Dow Jones: ⬇️ -0.22% – The Dow edged lower as weaker-than-expected GDP growth (2.8% vs. 3.0%) and election jitters left investors feeling uneasy.

• S&P 500: ⬇️ -0.33% – The S&P slipped into the red, weighed down by tech and chip stocks, despite strong U.S. private payrolls rising by 233,000.

• Nasdaq: ⬇️ -0.56% – A rough day for chipmakers, as AMD and Qorvo forecasts sent shockwaves through the Nasdaq, leading to the day’s biggest losses.

With tech stocks in flux, the information technology sector posted the day’s biggest decline (-1.34%), while Alphabet’s gains helped the communication services sector rise.

💥 Chipocalypse :

The semiconductor space dragged everything down. AMD and Qorvo posted ugly forecasts, causing chip stocks to slide and leaving investors spooked.

• Super Micro Computer (SMCI): ⬇️ -32.68% – Shares plunged after Ernst & Young resigned as the company’s auditor, triggering concerns about financial reporting and internal controls.

• Qorvo (QRVO): ⬇️ -27.31% – The chipmaker suffered a steep decline after issuing a weak third-quarter forecast, as it faces pressure from customers shifting toward cheaper products.

• Nvidia: ⬇️ (-1.4%) also slipped, though it managed to escape the worst of the sector’s bloodbath, likely buffered by its position in the AI space.

AI Bet Pays Off:

Microsoft dropped its fiscal Q1 earnings, and it’s clear the AI boom is giving the tech giant a serious boost. The company beat on both revenue and earnings per share, driven largely by its cloud business and AI investments.

• EPS: $3.30 (vs. $3.10 expected)

• Revenue: $65.6 billion (vs. $64.5 billion expected)

• Cloud Revenue: $38.9 billion, with Azure growing 20% year-over-year

• Azure Revenue: $24.1 billion, up 20% year-over-year

• Productivity Segment: $28.3 billion, fueled by Microsoft 365 services

Microsoft has been cashing in on AI, thanks to its investment in OpenAI, the creators of ChatGPT. While competition from Amazon, Google, and Salesforce looms, Microsoft’s AI-powered growth continues to impress.

Stock’s up 28% in the last year—solid, but still trailing Alphabet and Amazon. The AI race is heating up, and Microsoft is staking its claim with both hands on the wheel.

Garmin Who?

Remember Garmin? The GPS company that was left for dead in the age of free smartphone navigation?
Well, they have taken quite the detour—right to a record high.

• Garmin (GRMN): ⬆️ +23.25%

After dodging the smartphone disaster zone, Garmin leaned into its niche markets, providing GPS for fitness buffs, boaters, and even pilots.

This quarter’s big win? Their Forerunner and Fenix watches, which fueled a 21% revenue surge in the outdoor division, hitting $527 million. Who knew selling GPS watches to marathon runners and outdoor enthusiasts would turn Garmin into a winner? A strategic pivot, some smart acquisitions, and voilà—Garmin is back on top, showing that even in the age of smartphones, people still want dedicated devices to help track their miles and find their way.

Other Movers:

It’s earnings season, and some of the biggest names made headlines for better or worse:

• 💊 Eli Lilly (LLY): ⬇️ -6.2% – Fell after missing sales estimates for its popular weight-loss and diabetes drugs, disappointing investors.

• ☕ Starbucks (SBUX): ⬇️ -0.07% – Reported a decline in quarterly sales due to global demand challenges. The company is also facing struggles with ① customer traffic and ② high prices for drinks.

• Meta Platforms (META): ⬇️ -0.25% – Reported record third-quarter revenue of $40.59 billion, up 19% year-over-year. However, slower digital advertising growth weighed on profits. Meta continues to invest heavily in AI and augmented reality, with its Reality Labs unit posting operating losses of $4.4 billion.

• ❗Alphabet (GOOG): ⬆️ +2.92% – Shares rose nearly 3% after Alphabet’s strong quarterly earnings, with Google’s advertising and cloud operations driving the gains. Alphabet reported a 15% surge in quarterly sales despite slower growth in advertising from its search and YouTube businesses.

Commodities Check: ✔️

• Gold: ⬆️ +0.6% → $2,797/oz – Gold edged higher, maintaining its role as a safe-haven asset amid economic uncertainty.

• Silver: ⬇️ -1.6% → $33.88/oz – Silver slipped despite gold’s rise, reflecting weakness in industrial demand.

• Crude Oil: ⬆️ +2.6% → $68.98/barrel – Prices rose as OPEC hinted at a potential delay in their planned production hike due to softening demand.

• Crude Stockpiles: ⬇️ -500,000 barrels → 425.5M – U.S. crude stockpiles fell unexpectedly, with the market having anticipated a significant increase.

Economic Rundown:

• GDP Growth: U.S. economic growth came in at 2.8% for Q3 — just shy of the 2.9% forecast. Still, the economy’s looking sturdy, thanks to resilient consumer spending.

  

• Jobs Boom: The private sector delivered a surprise, adding 233k jobs in October, well above expectations. But, with wage growth cooling, inflation might finally be chilling out.

• Treasury Yields: The two-year yield ticked up by 5.5 basis points to 4.17%, while the 10-year yield nudged to 4.3%. All eyes are on the Fed’s next rate cut decision.

• 🏠 Housing Market Heats Up: Pending home sales defied the odds, climbing across all U.S. regions, reminding us that the housing market isn’t out for the count just yet.

MISC:

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Today:

• Amazon and Apple: Set for today—investors are eager for guidance updates.

• PCE Inflation Data: Today, watch for potential volatility ahead.

#TRUTH:

“If you tell the truth, you don’t have to remember anything.” – Mark Twain

The stinger

Disclaimer

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