Traders work on the floor of the New York Stock Exchange during morning trading on Oct. 8, 2024.
Stocks jumped Monday as investors looked for a batch of megacap technology earnings to keep driving the Nasdaq Composite to new heights this week. A cooling geopolitical situation also aided risk sentiment.
The S&P 500 gained 0.4%, while the Dow Jones Industrial Average advanced 327 points, or 0.8%. The Nasdaq traded 0.5% higher.
Weekend airstrikes by Israel against Iran did not target oil or nuclear facilities as was feared, and oil futures sold off on the day. U.S. crude prices were down 6%, along with international benchmark Brent.
This week will also mark the busiest week of third-quarter earnings reporting season and the final week before the Nov. 5 U.S. presidential election. Five of the Magnificent Seven companies — Alphabet, Microsoft, Meta Platforms, Amazon and Apple — are scheduled to report third-quarter earnings. Shares of Apple rose 0.6% on Monday, while Alphabet climbed 1%.
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"Given high valuations overall, there's going to be a laser focus on if they're able to continue to hit those growth numbers," said Horizon Investments head of research and quantitative strategies Mike Dickson.
Traders are also watching for a slew of key economic data this week, including the September jobs report due Friday; the September personal consumption expenditures, or PCE, price index, expected Thursday; and a preliminary reading on third-quarter gross domestic product out on Wednesday.
Bank of America hikes Duolingo’s price target heading into earnings
Money Report
A strong third quarter for revenue and EBITDA could spell more gains for Duolingo, according to Bank of America.
Shares were fractionally higher after analyst Curtis Nagle reiterated his buy rating on the language app and upped his price target. His updated target implies more than 11% upside from Friday's close.
"While we expect another beat and raise quarter in 3Q, expectations are high going into the quarter which could add some near-term volatility risk to shares," he said in a Monday note. "With that said, Duolingo is one of the highest growth cos. within Internet and we remain positive on the opp. for cont. earnings upside."
Duolingo shares have surged more than 28% in 2024 and more than 68% in the past three months. The company is expected to post its quarterly results after market close on Nov. 6.
— Sean Conlon
Crypto stocks jump as bitcoin climbs toward $70,000
Stocks tied to the price of bitcoin jumped on Monday as the flagship cryptocurrency moved above $69,000, after briefly touching the level a week ago.
Crypto exchange operator Coinbase added 4%. Bitcoin price proxy MicroStrategy advanced more than 5%. Both companies are scheduled to report their quarterly earnings on Wednesday. Bitcoin miners Mara Holdings rose 6% and Riot Platforms gained 5%.
Bitcoin has been trying to reclaim the $70,000 level since hitting its record in March above $73,000. Earlier attempts this year have led to brief forays above $70,000, but it has not touched the level since June. Some say that could soon change with the U.S. presidential election drawing nearer.
— Tanaya Macheel
Stocks open higher Monday
U.S. stocks began Monday's trading session in the green.
The Dow Jones Industrial Average advanced 232 points, or 0.6%.
The S&P 500 rose 0.5%, while the Nasdaq Composite climbed 0.7%.
— Hakyung Kim
Spotify, Boeing among stocks moving in premarket trading
Check out the companies making headlines in premarket trading.
- Spotify — The music platform rose more than 2% after Wells Fargo named Spotify a top stock pick. Analyst Steven Cahall is particularly bullish on the company's rising margins, strong product mix and evolving record label relationships. The bank currently has an outperform rating on the stock.
- Robinhood — The stock added 2%. On Monday, the retail investing company announced users can trade a Kamala Harris or Donald Trump contract ahead of the 2024 presidential election. Users must meet certain criteria, including being a U.S. citizen.
- Boeing — Shares of the planemaker slipped roughly 2% after Boeing launched a stock offering that could raise roughly $19 billion. The move is aimed at strengthening the company's finances, which have been hit by a worker strike and a slew of production and safety issues.
For the full list, read here.
— Pia Singh
Today is one of the best days of the year to go long stocks, Goldman Sachs' trading desk says
Oct. 28 is one of the best days of the year to go long U.S. stocks and heralds a highly favorable period for stocks through year-end, according to Goldman Sachs' trading desk managing director Scott Rubner.
"Today starts the best trading period of Q4 for U.S. equities with data going back to 1928," Rubner said in a premarket note out to clients Monday referencing the S&P 500. "October 28th is one of the best trading days of the year and a positive seasonal trading stretch with 9 straight days of gains. The 47th all-time high was set on 10/18: 5864 or ~ 20 points higher than today's premarket open."
Rubner gave a host of reasons why U.S. stocks are likely to move higher over the remaining nine weeks of 2024, among them that Monday starts "the best trading period of the year for U.S. equities also during election years" while the end of October means less selling from mutual funds and pensions and brings "back online the largest buyer of the equity market, U.S. Corporates." The "repurchase window" for U.S. companies to buy back their own stock "starts today with 50% of corporates in the open window," Rubner wrote.
Stocks are also likely to get a boost from diminished volatility, with the Chicago Board Options Exchange's CBOE Volatility Index down to about 19.2 on Monday, and from a contrarian call against a "global consensus on Wall Street" that stock prices will fall after the presidential election on Nov. 5. "I do not think that we see this left tail," Rubner told clients. "[T]he U.S. election will be a clearing event for risk assets, and re-risking may happen quickly," favoring sectors and themes "that are under-owned."
— Scott Schnipper
Canaccord raises its price target on Tesla, says post-earnings rally will continue
A few catalysts have set Tesla up for more outperformance in the coming months, according to Canaccord Genuity.
Analyst George Gianarikas, who has a buy rating on the electric vehicle maker, hiked his price target, which implies more than 10% upside from Friday's close.
Gianarikas finds that Tesla's earnings trends will get closer to other "Magnificent Seven" names in the current quarter and outpace them next year.
"Tesla's stock underperformed since the beginning of 2022 as [profit and loss] trends deteriorated," he continued. "The stock appears to have also bottomed as P&L trends bottomed in 1Q24. We see the stock as likely to follow the upcoming P&L acceleration in our estimates and outperform."
CNBC Pro subscribers can read more here.
— Sean Conlon
Oil sells off after Israel strikes spare Iran crude facilities
Oil prices fell about 6% on Monday, after Israel spared Iranian oil facilities in attack that struck military installations in the Islamic Republic.
Futures for global crude benchmark Brent slid 5.83% to $71.62 per barrel at 7:54 am ET, while U.S. West Texas Intermediate futures dropped 6.13% to $67.38 per barrel.
Israel on Saturday attacked Iran's military installations in three provinces in response to Tehran launching ballistic missiles against Israel on Oct. 1.
"The recent Israel military action is unlikely to be seen by the market as leading to an escalation that impacts oil supply," Citi analysts wrote in a note on Monday, cutting the bank's Brent oil forecast by $4 to $70 per barrel over the next three months.
— Lee Ying Shan, Spencer Kimball
Macquarie upgrades shares of Nio, sees volume acceleration ahead
A couple of catalysts may send shares of Nio higher over the coming months, according to Macquarie.
The stock rose around 3% in the premarket on the heels of analyst Eugene Hsiao upgrading the stock to outperform from neutral. His price target also reflects more than 25% upside from Friday's close.
"NIO [is] the only player where volume/sales may miss expectations, but Onvo L60 [is] likely more meaningful in 4Q," he wrote in a Monday note. He added that current order trends are "well above" the company's guide of 20,000 unit deliveries for the period.
On top of that, Hsiao said that there may also be upside from the Chinese electric vehicle maker's launch of its Firefly brand next year.
While shares have gained more than 18% in the past three months, they've slumped this year, falling around 42%.
— Sean Conlon
Stifel downgrades Colgate-Palmolive, trims price target
Slowing organic sales growth could weigh on Colgate-Palmolive in the near term, according to Stifel.
Shares were marginally lower in the premarket after analyst Mark Astrachan downgraded his rating on the stock to hold from buy. He also slightly cut his price target, which now reflects more than 5% upside from Friday's close. This year, the stock has soared about 20%.
"We view fundamentals as more-than-solid, evidenced by ~4% volume growth following ~3% growth in 1H24, making Colgate one of the best-performing large-cap consumer staples companies," Astrachan wrote in a recent note to clients. "That said, comparisons are increasingly challenging, and we anticipate organic sales growth to slow from high single-digits in recent years."
More specifically, the analyst estimates between 4% and 5% growth in organic sales over the next four quarters.
"We think decelerating organic sales is unlikely to result in multiple expansion for CL shares, resulting in range-bound trading over the near-to-medium term, in our view," he also said.
— Sean Conlon
Wolfe Research downgrades Honeywell
Wolfe Research thinks some headwinds could bog down Honeywell over the next year.
The firm downgraded its rating on the stock to peer perform from outperform, seeing its risk-reward profile as being in the "middle of the pack." That marks the first time since November 2005 that Wolfe has changed from its outperform rating on the name.
"HON has struggled for the past 2 years, and we have now become less optimistic that headwinds will resolve over the next 12 months," analyst Nigel Coe wrote in a Monday note to clients. "We see risk of another wave of negative EPS revisions during 1H25."
While Coe thinks that warehouse and supply chain headwinds will likely improve next year and in 2026, deceleration across some of the company's business units like Honeywell Process Solutions (HPS) and Universal Oil Products (UOP) could offset the gains seen in its short-cycle units.
"Consistent margin expansion has been HON's hallmark, but there are some worrying signs of a margin peak developing, especially if Aero margins remain pinned at ~27% in 2025," he continued.
Although the stock has risen more than 7% in the past six months, it's slid almost 1% year to date.
— Sean Conlon
Oppenheimer's Stoltzfus sees 'relief' for markets after U.S. election
John Stoltzfus of Oppenheimer Asset Management thinks markets will be choppy in the days leading to the election. After that, investors should be able to exhale.
"The Presidential election certainly looks to be a close one. We expect markets to continue to experience some upside and downside risk leading up to the election based on day to day news flow," the firm's chief investment strategist wrote.
"After the election? The market is likely to show some relief that an election outcome is known after which it will seek out opportunities and risks tied to policy that could emerge post-election," he added.
— Fred Imbert
European markets rise as trading kicks off
European markets were higher as trading began on Monday, with the pan-European Stoxx 600 last adding 0.24% at 8:15 a.m. London time.
Travel and leisure stocks were up around 1.1%, while oil and gas stocks lost 1.7%.
Regional bourses were also mostly higher with France's CAC 40 adding 0.7% and Germany's DAX rising 0.2%.
— Sophie Kiderlin
Japan leads Asia markets climb after ruling LDP loses majority
Japan's Nikkei 225 led gains in Asia on Monday, climbing 1.82% after the country's ruling Liberal Democratic Party lost its majority in the lower house of parliament. The Topix advanced 1.51% to 2,657.78.
Other major indexes also climbed, with Hong Kong's Hang Seng index reversing losses to gain 0.18% as of its final hour, while mainland China's CSI 300 traded 0.2% higher and finished at 3,964.16.
This comes after China reported its worst industrial profit numbers since the pandemic. Industrial profits in China plunged 27.1% year on year in September.
South Korea's Kospi gained 1.13% to 2,612.43, while the small cap Kosdaq was 1.8% higher, ending at 740.48 and rebounding off a six week low.
— Lim Hui Jie
Stock futures open higher
U.S. stock futures jumped on Sunday evening.
Futures tied to the Dow Jones Industrial Average gained 117 points, or 0.3%. S&P 500 futures rose 0.3% and Nasdaq 100 futures advanced 0.4%.
— Tanaya Macheel
