Market Overview

The stock market experienced mixed results, with minimal conviction from buyers or sellers ahead of Tuesday's election. Major indices closed with declines between 0.3% and 0.6%, although they were off session lows. The Russell 2000 outperformed other indices, closing 0.4% higher.

Sector Performance

Losses in mega-cap stocks and chipmakers significantly impacted index performance. Notable stocks included:

• Apple (AAPL, Financial): $222.01, down 0.4%
• Microsoft (MSFT): $408.46, down 0.5%
• Amazon.com (AMZN, Financial): $195.78, down 1.1%
• Alphabet (GOOG): $170.68, down 1.1%
• Meta Platforms (META, Financial): $560.68, down 1.1%
• Broadcom (AVGO): $168.64, down 0.2%
• Tesla (TSLA): $242.84, down 2.5%

The Vanguard Mega Cap Growth ETF (MGK) fell by 0.3%, and the PHLX Semiconductor Index (SOX) declined by 0.6%. Conversely, the equal-weighted S&P 500 ended slightly higher than Friday.

S&P 500 Sector Highlights

Four S&P 500 sectors closed higher, led by:

• Energy: Up 1.9%, driven by a 2.8% increase in oil prices to $71.48 per barrel, following reports of Iran's planned response against Israel.
• Real Estate: Up 1.1%, benefiting from a drop in market rates.

The 10-year yield decreased five basis points to 4.31%, and the 2-year yield decreased two basis points to 4.18%. Treasury market activity suggested tempered expectations for an election sweep, crucial for presidential candidates to implement their plans. The market also processed a lackluster $58 billion 3-year note auction.

Corporate Changes

NVIDIA (NVDA, Financial) at $136.05, up 0.5%, and Sherwin-Williams (SHW) at $374.40, up 4.6%, will replace Intel (INTC, Financial) and Dow Inc. (DOW) in the Dow Jones Industrial Average, effective before trading on Friday, November 8.

Economic Data

Recent data revealed that factory orders declined by 0.5% month-over-month in September, following a 0.8% decline in August. Excluding transportation, factory orders increased by 0.1% after a 0.2% decrease in August. The primary driver of the decline was transportation equipment orders, particularly nondefense aircraft and parts (-22.7%) and defense aircraft and parts (-23.7%).

Upcoming Economic Events

Tuesday's schedule includes:

• September Trade Balance at 8:30 ET
• Final October S&P Global Services PMI at 9:45 ET
• October ISM Services at 10:00 ET
• $42 billion 10-year Treasury note auction results at 1:00 ET

Global Markets

European markets: DAX down 0.5%, FTSE up 0.1%, CAC down 0.5%.

Asian markets: Nikkei closed, Hang Seng up 0.3%, Shanghai up 1.2%.

Guru Stock Picks

Diamond Hill Capital has made the following transactions:

• Reduce in MYFW by 12.48%
• Sold out in CVS
• Add in ABT by 8.52%
• New position in PAL

Wasatch International Growth has made the following transactions:

• Reduce in NSE:PERSISTENT by 14.28%
• Sold out in TSE:6966
• Add in MIL:DIA by 9.5%
• New position in ROCO:3680

First Pacific Advisors has made the following transactions:

• Reduce in NATL by 4.81%
• Sold out in CVIIW
• Add in VYX by 0.26%
• New position in RSVR

Matthews Emerging Markets Small Companies Fund has made the following transactions:

• Reduce in HKSE:01801 by 34.91%
• Sold out in MEX:BBAJIOO
• Add in JSE:OMU by 12.85%
• New position in XKRX:352480

Matthews China Fund has made the following transactions:

• Reduce in HKSE:01024 by 19.04%
• Sold out in SHSE:600845
• Add in HKSE:09618 by 2.51%
• New position in HKSE:02669

Matthews Japan Fund has made the following transactions:

• Reduce in TSE:7733 by 1.14%
• Sold out in TSE:8111
• Add in TSE:9435 by 168%
• New position in NGO:7011

Matthews Pacific Tiger Fund has made the following transactions:

• Reduce in ROCO:8069 by 49.4%
• Sold out in BOM:532343
• Add in PHS:BPI by 290.67%
• New position in TPE:2882

Today's News

Palantir Technologies (PLTR, Financial) reported impressive third-quarter results, with a Non-GAAP EPS of $0.10, surpassing expectations by $0.01. The company also achieved a revenue of $725.52 million, marking a 30% increase year-over-year, beating estimates by $21.83 million. Palantir closed 104 deals over $1 million, while its customer count grew significantly by 39% year-over-year. The company raised its 2024 revenue guidance to between $2.805 billion and $2.809 billion, exceeding the consensus of $2.76 billion.

Meta Platforms (META, Financial) is leading the AI revolution among the "Magnificent 6," achieving a 19% growth in advertising revenue, driven by its AI advancements. Analysts from D.A. Davidson highlighted Meta's successful open-source approach to AI, which is promoting adoption among developers. Meanwhile, Amazon (AMZN, Financial) is also emerging as a leader in the AI space, positioning itself well in the market.

Hims & Hers Health (HIMS, Financial) announced a strong third-quarter performance with a GAAP EPS of $0.32, beating estimates by $0.27, and revenue of $401.6 million, a 77.2% increase year-over-year. The company provided optimistic guidance for the fourth quarter of 2024, expecting revenue between $465 million and $470 million, and adjusted EBITDA of $50 million to $55 million.

Viking Therapeutics (VKTX, Financial) saw its shares fall by 13% after initial gains due to concerns over production issues for its weight-loss drug candidate VK2735. Despite positive data showing an 8.2% average weight loss in patients, analysts expressed concerns about the cost and expertise required for scaling up production.

Constellation Energy (CEG, Financial) plans to continue developing data centers on its U.S. power plant sites, despite a regulatory setback from the Federal Energy Regulatory Commission. The company is seeking guidance on permissible commercial strategies while pursuing these developments, which are part of its growth strategy.

Intel (INTC, Financial) is reportedly seeking bidders like Silver Lake and Bain Capital for a stake in its Altera unit, valued at $17 billion. The move aims to attract minority partners to provide capital for Altera, which specializes in chips for high-performance communications and data center applications.

First Solar (FSLR, Financial) and Enphase Energy (ENPH, Financial) were among the top gainers, with investors speculating on potential benefits from a possible Vice President Kamala Harris presidency, which could favor alternative energy sectors. The solar industry could see increased support under her leadership.

Super Micro Computer (SMCI, Financial) is facing challenges, including the resignation of its auditing firm, which has led to a significant decline in its stock value. Nvidia (NVDA, Financial) is redirecting orders from Super Micro to other suppliers to mitigate disruptions in the AI server industry.

GuruFocus Stock Analysis

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