Weekly Market Recap:
This week, U.S. equities were mixed. The Dow rose by +2.68%, while the S&P 500 and Nasdaq saw more modest gains of +0.96% and +0.16%, respectively. The Russell 2000 led with a +2.99% increase. This marked a break in the S&P 500’s six- week streak of gains, though the Nasdaq extended its streak to seven weeks, fueled by tech stocks. Tesla led outperformers, up +22%, and strong sectors included tech, EVs, and ag chemicals, while homebuilders, retail, and financials lagged Treasuries were weaker across the curve, and the dollar index gained +0.8%, primarily driven by a stronger yen. Gold rose +0.9% to a fresh record high, while WTI crude climbed +4.5%.
Corporate Highlights:
Tesla exceeded earnings expectations, and CEO Elon Musk indicated potential sales growth of up to 30% next year.
McDonald's (-7.6%) suffered due to an E. coli outbreak linked to its Quarter Pounder hamburgers, impacting its brand perception.
Starbucks issued disappointing Q4 guidance as its new CEO began implementing a turnaround plan.
Texas Instruments posted strong earnings with robust growth in China’s EV market.
Outlook for Next Week:
Key data releases include October payrolls on Nov 1, anticipated to reflect a deceleration in job growth, and Q3 GDP estimates. Major earnings reports are expected from McDonald’s, Visa, Alphabet, Meta, and Amazon, potentially driving market sentiment.
The recent onion recall tied to an E. coli outbreak has highlighted alarming gaps in our food safety systems. Linked to McDonald's Quarter Pounders, this outbreak has sickened 49 people across the Mountain West, leaving one person dead and others severely ill. This situation has prompted chains like Taco Bell, KFC, and Burger King to remove raw onions from select locations as a precaution. The recalled onions, supplied by Taylor Farms, were distributed across at least 10 states and have raised concerns about contamination stemming from irrigation practices, often tainted by fecal matter from nearby livestock. Despite previous large-scale E. coli outbreaks, such as the one tied to romaine lettuce in 2019 that hospitalized 85 people, the FDA’s recent rules still fall short of mandating consistent water treatment, instead relying on individual risk assessments. The seriousness of this outbreak is further amplified by the strain’s potential to cause Hemolytic Uremic Syndrome, a life-threatening condition that has already hospitalized a young child. In light of these statistics, tightening regulations around produce handling and water use is essential for preventing future public health crises. Until then, fast-food chains are left to respond cautiously, highlighting the need for comprehensive safety measures across the entire supply chain.
NEXT WEEK: Notable Earnings
Monday (10/28)
Ford Motor ($F)
SJW Group ($SJW)
Tuesday (10/29)
Crocs ($CROX)
Adidas AG ADR ($ADDYY)
Xerox ($XRX)
Wednesday (10/30)
Eli Lilly & Co ($LLY)
Humana ($HUM)
Kraft Heinz ($KHC)
Thursday (10/31)
Uber Technologies ($UBER)
Lending Tree ($TREE)
Wendy’s ($WEN)
Friday (11/1)
Chevron ($CVX)
Exxon Mobil ($XOM)
Notable Ex-Dividend Dates:
Monday (10/28)
Albertsons Companies ($ACI) 2.63%
Blackstone ($BX) 2.00%
Tuesday (10/29)
Levi Strauss & Co ($LEVI) 2.60%
Wednesday (10/30)
Citizens Financial Group ($CFG) 3.86%
Thursday (10/31)
Morgan Stanley ($MS) 3.10%
Scholastic ($SCHL) 2.50%
Friday (11/1)
Ally Financial ($ALLY) 3.42%
Costco Wholesale ($COST) 0.52%
Realty Income ($O) 5.10%*
*Dividend Aristocrat
