Investing Action Plan: Apple, Alphabet, Microsoft Wrap Up October

The Dow took a big hit this week, its first weekly drop in seven weeks, as nearly 30% of the index booked declines of more than 5%. Investors are jumpy as October rolls to a close and election day approaches. The coming week will throw more kindling on the fire. Apple (AAPL), Alphabet (GOOGL), Microsoft (MSFT) and Intel (INTC) are among the names set to report. And a heavy slate of economic reports will serve up the final rounds of data ahead of the following week’s election.

Stock Market Watch: A Target-Rich Market Trend

As the stock market rally enters a two-week period of massive news, there are a number of leading stocks with their big news items out of the way. Amphenol (APH), ResMed (RMD), JPMorgan Chase (JPM), Carpenter Technology (CRS) and On Holding (ONON) are all in or near buy areas. Amphenol, ResMed, JPMorgan and Carpenter Tech have all reported earnings recently. On Holding has not, but strong results from rival shoemaker Deckers triggered a rebound and the stock snapped a downtrend. ResMed is just even with a flat base buy point and up 48% so far this year. JPMorgan is pulled back below its buy point as it pursues its third breakout since May. Carpenter is poised for a rebound.

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Econ Calendar: Sifting The Last Preelection Data

The coming week’s jam-packed economic calendar culminates with Friday’s jobs report. Its results will be distorted by the impact of hurricanes and the Boeing strike. Still, economists expect 125,000 new jobs, including 115,000 private jobs, as the unemployment rate holds, FactSet says, at 4.1%. The core PCE price index, the Fed’s primary inflation gauge, will be updated for September with the Commerce Department’s personal income and outlays report early Thursday. At the same time, the Labor Department releases the Fed’s primary measure of wage growth, the Employment Cost Index. Q3 GDP growth, out Wednesday morning, is expected to hit 3% for the second straight quarter.

Strong Retail Sales May Put Dec. Fed Rate Pause In Play; S&P 500 Fades

Big Tech: Details On Early iPhone 16 Sales

Consumer electronics giant Apple will report its September-quarter results late Thursday. Analysts expect earnings of $1.60 a share, up 10% year over year, on sales of $94.4 billion, up 5%, for fiscal Q4. The report will include the first 10 days or so of sales of Apple’s iPhone 16 smartphones, Apple Watch Series 10 smartwatches and AirPods 4 wireless earbuds. Ahead of the earnings report, Apple plans to release a software update for iPhone 15 and 16 handsets that will include the first batch of Apple Intelligence features. Early reviewers have been underwhelmed by the limited AI features. Apple shares are riding short-term support, just below a traditional entry in a 13-week base.

Blue Chip Notebook: A Heavy Dow Earnings Week

The last week of October is fat cat week on the Dow, with eight companies set to report earnings. Beyond Apple and Microsoft, Visa (V), McDonald’s (MCD), Caterpillar (CAT), Merck (MRK), Intel and Chevron (CVX) are due to report. The Dow saw its first slip in seven weeks through Friday, leaving it slightly lower so far in October, after a five-month rally.

Megatech Earnings: Azure And Costs In Focus

Software giant Microsoft posts fiscal Q1 results late Wednesday. Wall Street models earnings of $3.10 a share, up 4% year over year, on sales of $64.6 billion, up 14%. Key focus areas will be Microsoft’s Azure cloud computing business, ongoing efforts to monetize its investments in generative artificial intelligence and data center capital spending plans. Analysts look for continued momentum in the Azure business and progress in getting customers to pay for AI services. Microsoft shares are basing.

Internet Content: First Outing For Google CFO

Google-parent Alphabet reports Q3 earnings late Tuesday — the first earnings call for new Chief Financial Officer Anat Ashkenazi. Analysts will look for Ashkenazi’s views on stock buybacks, cost cuts and margin trajectory. Also, his views on transparency, such as more disclosure on YouTube financials. Analysts estimate Q3 EPS of $1.84, up 19%. Revenue is expected to rise 13% to $86.4 billion. Cloud computing revenue is expected to grow 29% to $10.87 billion.

Big Pharma: Eli Lilly earnings set to rocket

Some of the biggest names in biopharma will report earnings next week, beginning early Tuesday with Pfizer. FactSet analysts expect earnings to flip from a year-earlier loss and sales to rise almost 13%. Eli Lilly (LLY), GSK (GSK) and AbbVie (ABBV) will report third-quarter earnings early Wednesday. Lilly’s earnings are projected to skyrocket, largely thanks to its diabetes and weight-loss drugs. GSK and AbbVie are expected to have split reports with earnings declining a respective 5% and 1%. Amgen (AMGN) reports late Wednesday. Merck (MRK) will report its earnings early Thursday. Analysts call for its earnings to dip, but for sales to inch 3% ahead.

AMD, Intel Earnings Will Contrast

Chipmakers Advanced Micro Devices (AMD) and Intel will release third-quarter results in the week ahead and their stories couldn’t be more different. AMD will post its Q3 results late Tuesday. Analysts see AMD earning of 92 cents a share, up 31% year over year, on sales of $6.71 billion, up 16%. Intel will publish its results late Thursday. Wall Street predicts Intel will lose 2 cents a share, vs. a year-earlier profit of 41 cents a share, on sales of $13.02 billion, down 8%. Intel badly missed estimates with its second-quarter results on Aug. 1 and announced a massive cost-reduction program, including cutting its head count by more than 15%.

Credit Card Leaders’ Earnings Due

Dow Jones payments giant Visa reports Q4 results late Tuesday, followed by rival Mastercard (MA) with Q3 earnings early Thursday. Bernstein in an earnings preview Tuesday wrote that overall consumer spending decelerated slightly during the quarter, with a portion of the lower volumes driven by lower gas prices. FactSet expects Visa to report a 10.8% increase in earnings to $2.58 per share on 10.2% revenue growth to $9.49 billion. Analysts see Mastercard earnings rising 10.3% to $3.74 per share on 11.2% revenue growth to $7.27 billion. V stock is trading in a flat base, with a 293.07 buy point. MA stock is trading near record highs, at the top of a cup buy zone after a mid-September breakout.

Tracking The Utilities/AI Connection

Southern Company (SO) reports third-quarter earnings and revenue early Tuesday. Analysts project EPS falling 5% to $1.35 and sales increasing 2% to $7.14 billion. Meanwhile, fellow utilities play PPL (PPL) then announces Q3 earnings and revenue before the stock market opens on Wednesday. Analyst consensus has profit running flat at 43 cents with sales growing 3% to $2.11 billion. The IBD-tracked Utility-Electric Power industry group has gained around 33% in 2024, riding a wave of investor enthusiasm around energy needs for artificial intelligence and the data centers needed to train AI learning.

Stock Market Earnings Briefs

Monday

Ford (F) reports late Monday. Analysts expect a 3% sales increase and 18% EPS growth — the first earnings gain in four quarters. The auto giant is focused on cost reductions, and on hybrid rather than electric vehicle sales. Ford stock has come off August lows, after gapping down following a huge Q2 miss.

F5 (FFIV) reports Q3 earnings after Monday’s stock market close. Analysts model adjusted EPS of $3.45, down 1% from a year earlier, with revenue up 3% to $730.4 million. F5 shares are extended after a September breakout.

Tuesday

PayPal Holdings (PYPL) reports Q3 earnings early Tuesday. Analysts predict EPS of $1.07, down 17% from a year earlier, with revenue up 6%, to $7.88 billion. Total payment volume from merchant transactions is expected to be $422.5 billion. Analysts will look for early 2025 commentary on revenue upside from new products, such as Fastlane, and the outlook for transaction margins. PayPal shares are extended after an August breakout.

Allison Transmission (ALSN) delivers Q3 earnings late Tuesday. Analysts project a 15% gain to $2.03, a slight uptick in growth, while sales increase 7% to $790 million. ALSN is trading around all-time highs and has gained 70% in 2024.

Wednesday

EBay (EBAY) will report Q1 earnings after the stock market closes on Wednesday. On average, analysts look for the e-commerce company to post a 1.9% year-over-year increase in sales, to $2.55 billion, according to FactSet. Earnings are seen rising 14% to $1.18 per share. EBay stock has gained 46% year to date.

Humana (HUM) reports Q3 results early Wednesday, facing views for a 56% slide in EPS, to $3.38, as benefit costs rise to 90.1% of premiums amid increased Medicare Advantage utilization. Sales are seen rising 8.5% to $28.668 billion. Humana shares are down 35% since July.

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