Q3 GDP, More Earnings

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Wednesday, Oct. 30. The penultimate day of October. The Bottom Line segment of today’s podcast starts at (4:59) followed by Stocks On The Contrarian Radar©️ feat OI 0.00%↑ at (7:07) for listeners who want to skip ahead.

State of Play

Tech stocks advanced yesterday and the Nasdaq finished at a fresh all-time high. Google (GOOG 0.00%↑) earnings after the close impressed. AMD (AMD 0.00%↑) earnings on the other hand left a little to be desired and that stock dropped overnight. As we eye our board of indicators for signs of direction at 0640, things are pretty quiet:

• The crypto rally continues. Bitcoin is up another 2% to trade around $72,500;

• Stock index futures are unchanged. No major US index is moving more than 0.2% from the break-even point;

• Commodities are mixed. WTI crude oil is up 1% to trade around $68/barrel. Copper is unchanged;

• Bonds are seeing a few bids for a change. The 2-year yield is down 4 basis points to 4.08% whilst the 10-year is down 5bps to 4.22% (yields move inversely to prices).

Earnings

The highlights are after the close again, when Microsoft (MSFT 0.00%↑) and Meta (META 0.00%↑) report.

This morning’s highlights include:

• Caterpillar (CAT 0.00%↑), the world’s largest manufacturer of heavy equipment covered in this space back on Oct. 14, missed estimates and that stock is sinking in the pre-market. Maybe there is something to this China slowdown weighing on things?

• Shake Shack (SHAK 0.00%↑) and Wingstop (WING 0.00%↑), two fast food-esque chains that can provide a gauge of casual dining trends in the US;

• Kraft Heinz (KHC 0.00%↑), a solid consumer staples proxy;

• Biopharmas Eli Lilly (LLY 0.00%↑) and Humana (HUM 0.00%↑).

Economic Data

A pretty busy day here too. We get a first look at third-quarter GDP in the Eurozone and US:

• Eurozone GDP came in at 0.4%, beating expectations of 0.2%;

• US GDP is out at 0830. That is expected to show an increase of 2.0%, a small decline from the 2.5% recorded for Q2;

• There’s an inflation element of this as well. PCE prices for Q3 are expected to show a 2.7% increaes compared to a 2.5% recorded for the previous quarter.

ADP payrolls are out at 0815. The expectation here is for 110,000 new jobs versus 143,000 recorded last month.

Then we get pending home sales at 1000. The expectation here is for a 0.9% increase month-over-month versus 0.6% last month.

Finally China PMIs print tonight and the Bank of Japan decides on interest rates.