Gold and silver steady after steep losses, Tesla set to report earnings after the bell

Earnings Parade Continues [01:04]

• Netflix stock is down approximately 7% in pre-market trading due to a disappointing earnings report.
• The company missed analyst expectations on both revenue and profit, with earnings per share reported at $5.87, falling short of its own forecast of $6.87.
• Tesla is scheduled to report earnings after the bell today, with Q3 sales benefiting from the end of a tax credit, but the company faces scrutiny regarding its revenue forecast and the performance of its Robo Taxis, Optimus, and AI businesses.
• Other companies reporting after the closing bell include IBM, SAP, and Alcoa.

The earnings parade continues and there are two blockbuster stocks in the spotlight.

Oil Prices and Global Trade Dynamics [01:55]

• Oil prices increased by over 1.5%, with Brent crude trading above $62 and crude above $58.
• This rise comes amidst reports that the US is nearing a deal with India, where India would cease Russian oil imports.
• In exchange, the US could reduce tariffs on Indian exports from the current 50% to around 15%.
• Despite ongoing tariffs and negotiations, China's exports to the US increased in September compared to the previous month, reaching approximately $1 billion per day.
• This trend underscores Beijing's bargaining power as the US continues to import Chinese goods.
• Negotiations between the US and China are ongoing, though a highly anticipated meeting with Xi Jinping may not occur, potentially cooling Asian markets.

It's a reminder of Beijing's bargaining power as America continues to buy its goods.

Apple's Market Cap Ambitions and Tech Stock Comparisons [02:59]

• All eyes are on Apple as it aims to reach a $4 trillion market capitalization.
• Shares are experiencing minimal movement in pre-market trading.
• There is a bullish sentiment among traders regarding Apple, with discussions contrasting its prospects with Nvidia.
• Apple is viewed by some as a "lagard" in the AI "super cycle" but its core business is performing strongly, leading to a potential catch-up rally.
• Nvidia, while having seen fantastic returns for shareholders due to the AI super cycle, is being chased by momentum traders.
• Analysts are bullish on Apple's core business, with demand for the iPhone 17 upgrade expected to extend into 2027.
• Connected home devices manufactured in Vietnam are also anticipated to be a significant part of Apple's ecosystem and a driver of Wall Street's bullish outlook.

I think that that Apple was really viewed as the lagard in this race and they got discounted because of it.

Trending Tickers: Google, Anthropic, and OpenAI [04:36]

• Google's parent company, Alphabet, is seeing its shares rise in pre-market trading due to potential talks with AI firm Anthropic.
• Anthropic is reportedly negotiating a deal with Google for cloud computing services, valued in the high tens of billions of dollars.
• This potential deal could provide Anthropic with significant computing power.
• A possible threat to Google comes from OpenAI, which announced "ChatGPT Atlas," a new AI-powered web browser.
• Amazon, a major rival to Google in the cloud space, is also a significant investor in Anthropic.
• Samsung Electronics has launched its Galaxy XR extended reality headset, incorporating AI features from Google, aiming to compete in the "computing on your face" market dominated by Meta and Apple.

Now the plan which has not been finalized involves Google providing cloud computing services to Anthropic.

Beyond Meat's Meme Stock Surge and Financial Sector Moves [05:36]

• Beyond Meat stock has seen a dramatic surge, closing 600% higher over the past three trading sessions, indicating a "meme stock" moment.
• This surge is occurring despite the plant-based burger maker's fundamentals not being particularly strong.
• The company's Beyond Burger six-pack will be available in 2,000 Walmart stores.
• The stock was also added to the Roundhill Meme ETF on Monday.
• Capital One is showing strength in pre-market trading, reporting impressive overnight results with a 23% revenue increase.
• The company announced a new $16 billion share repurchase authorization and plans to raise its quarterly common stock dividend from $0.60 to $0.80 per share.

Beyond Meat, the stock has certainly gone viral.

Tesla Earnings Analysis: Demand, Pricing, and Future Growth [06:52]

• The third quarter for Tesla clearly benefited from a pull-forward of demand due to expiring EV tax credits on September 30th.
• This likely contributed to sales figures and will be further examined in upcoming reports.
• A potential downtick in the US market over the next couple of quarters is anticipated.
• This is partly attributed to the demand pull-forward and the fact that EVs will be more expensive in the near term without tax credits.
• Compelling buying opportunities were noted for EVs at the end of September from various manufacturers.
• Softness in EV sales is expected for the next couple of quarters.
• Lower-priced Model 3 and Y models could impact growth and margins, potentially creating a margin headwind in the near term as Tesla pushes lower-priced vehicles to offset volume.
• The long-term business model for Tesla, as envisioned by Elon Musk, involves getting as many Teslas into the market as possible to underpin potential growth in full self-driving and ultimately the robo-taxi business.
• While lower-priced cars might lessen the blow on volumes over time, they are expected to have a short-term impact.

As as we look into the fourth quarter and the first quarter, you know, the the lack of credits and and and Tesla pushing pushing lower price vehicles uh to maybe offset things on the volume front, you know, probably do create a margin headwinder in the near term.

OpenAI's Atlas Browser and the AI-Driven Web [09:01]

• OpenAI has announced "Atlas," its new internal search engine and web browser, positioning it as a direct rival to Google's Chrome, which holds approximately 72% of the global market share.
• ChatGPT is built directly into Atlas, enabling natural voice search for closed tabs, Google Docs, and standard URL entries within a single interface.
• Atlas features an "agent" capability, allowing the browser to perform tasks such as shopping for groceries via Instacart or booking restaurant reservations.
• This launch signifies a new breed of browsers integrating generative AI capabilities, reducing the need to navigate to separate AI websites like ChatGPT from within Chrome.
• Other browsers are also integrating AI, including Google's Chrome with Gemini capabilities and AI overviews in search, Perplexity's browser, and Microsoft Edge with built-in Copilot.
• OpenAI's move is seen as a potential "existential threat" to Google, not immediately, but a creeping fear exists.
• Google was initially caught "flatfooted" by ChatGPT's release but has since been catching up with Gemini.
• The competition between AI models is dynamic, with different models trading positions as new versions are released.
• Google's challenge lies in mindshare, where ChatGPT and Nvidia are top-of-mind for AI, while Google is primarily associated with search.
• While AI overviews are integrated into Google search, users need to be more deliberate to use tools like ChatGPT.

So we're seeing more and more of this AI trickle in.

Market Movers: Earnings and Acquisitions [13:00]

• Hilton has lowered its full-year outlook as demand for US rooms has fallen, attributed to a pullback in foreign visitors, government travel, and weaker vacation demand. Revenue per available room fell 1.1% in Q3, but shares are up pre-market as revenue exceeded expectations.
• Boston Scientific has increased its adjusted earnings per share guidance for the full year, surpassing analyst estimates. The company is also acquiring Nalu Medical, a developer of neurostimulation systems for chronic pain, in a deal valued at approximately $533 million.
• AT&T reported strong third-quarter results, demonstrating continued customer demand for its wireless and fiber offerings and reaffirming its full-year financial outlook. Adjusted earnings per share of $0.54 met analyst expectations, with shares trading slightly higher.
• The energy arm of GG Venova reported mixed Q3 results, initially sending shares lower. Revenue of $9.97 billion beat expectations, boosting the share price, but earnings per share of $1.64 missed by over $0.20.
• Canadian miner Tech Resources, which Anglo-American has agreed to buy, reported a 19% jump in Q3 earnings, with rising metal prices offsetting disruptions at its copper mine in Chile. Net profit was just over $200 million, a significant improvement from a nearly $500 million loss last year.

Boston Scientific boosted its adjusted earnings per share guidance for the full year.

Netflix Earnings Deep Dive: Margins, Content, and M&A Speculation [15:04]

• Investors were looking for Netflix management to increase their operating margin guidance for 2025 from 30% to 31-32%, but it has been lowered.
• This reduction is largely attributed to a Q3 operating margin miss, which was unexpected given the strong content slate for Q3 and Q4.
• Engagement metrics have been very strong in Q3, with a 20-22% surge attributed to major titles like "K-pop Demon Hunters," "Squid Game" season 3, and "Wednesday" season 2.
• Engagement is seen as the key driver for content, monetization, and Netflix's pricing power.
• There are reports suggesting Netflix could be interested in acquiring Warner Brothers Discovery or parts of it.
• Strategically, acquiring IP from Warner Brothers would make sense for Netflix to improve subscriber trends, lower churn, and increase engagement.
• However, Netflix's history shows a "build versus buy" strategy with minimal M&A spending (around $1-1.5 billion total), and investors have favored this approach.
• The potential acquisition of Warner Brothers is seen as a "once in a generational opportunity" with potential synergies.

So definitely somewhat underwhelming just because we know that both third quarter and fourth quarter uh is supposed to be one of their best uh content slates ever.

French Luxury Stocks: A Tale of Two Cities [18:34]

• Many investors are currently leaning towards selling French luxury stocks.
• Iconic French companies Hermes and L'Oreal saw sharp declines after their earnings reports.
• LVMH's stock was little changed in Paris trading, with rumors of a potential sale of Fenty Beauty, co-owned with Rihanna.
• L'Oreal, considered more of a consumer brands conglomerate, had positive sales in China, but the CEO cautioned that "One quarter doesn't make a trend," leading to investor sell-offs.
• Deutsche Bank maintained a €340 price target for L'Oreal but reiterated its "sell" rating, with RBC analysts agreeing, deeming the magnitude of improvement underwhelming.
• Hermes has been weathering geopolitical tensions well, with revenue growing 9.6% year-on-year.
• However, some analysts suggest investor expectations for Hermes may have been excessively high following Louis Vuitton's positive results.
• Despite a down morning for Hermes, Deutsche Bank, Citi, and others rate it a "buy," seeing its results as a potential turning point for the luxury sector.

Investors clearly didn't like that one and decided to sell off.

General Motors Strategy Shift and Market Check [20:08]

• General Motors (GM) has been trending upwards on strong results, with its CFO discussing a strategy shift.
• GM is moving undercapacity in the US to other global plants, exemplified by the Orion plant.
• The Orion plant, initially geared for significant EV demand, is being repurposed for internal combustion engine (ICE) production due to customers not being ready for that level of EV demand in the coming years.
• This shift will allow for increased production of full-size SUVs and domestically produced full-size trucks, which is expected to alleviate tariff burdens.
• This production is slated to come online by the end of next year and early 2027.
• The President's support for the US auto industry is seen as beneficial for GM.
• Concerns about competitiveness with importers and the impact of tariffs are noted; tariffs would have increased GM's margins by approximately 300 basis points.
• GM is focused on performing within the current environment and aims to return to 8-10% margins.
• Gold experienced its biggest intraday decline in over 12 years, falling 6.3% yesterday, with silver also dipping more than 2%.
• Gold is currently falling again today, heading towards the $4,000 mark.
• Asian markets are mixed, with the Nikkei ending its record run, down slightly after missing export data expectations.
• South Korea's Kospi set a new closing record, marking its sixth consecutive winning session.
• European stocks are generally down, with consumer products and services leading declines, while energy stocks rose as oil prices regained.
• The UK's FTSE 100 is performing better than other European indices due to UK inflation data coming in better than expected, potentially boosting sentiment for rate cuts.

Well, really what we're doing, Brian, is kind of shifting some of the undercapacity that we had in the US, filling that up and shifting that to other plants uh globall