**Three Major Futures Down, Tesla & IBM Post-Market Earnings**

Pre-market Market Movements

1. On October 23rd (Wednesday), before the U.S. stock market opened, the three major U.S. stock index futures all fell. As of the time of writing, Dow Jones futures were down by 0.47%, S&P 500 index futures were down by 0.22%, and Nasdaq index futures were down by 0.32%.

2. As of the time of writing, the German DAX index was down by 0.24%, the UK FTSE 100 index was down by 0.50%, the French CAC 40 index was down by 0.64%, and the Euro Stoxx 50 index was down by 0.40%.

3. As of the time of writing, WTI crude oil was down by 1.84%, trading at $70.42 per barrel. Brent crude oil was down by 1.71%, trading at $74.74 per barrel.

Market News

Wall Street Giants' Divergence: Goldman Sachs Bears U.S. Stocks' Future, While JPMorgan Bets on AI to Boost by 6.7%. Goldman Sachs strategists warned that the annual growth rate of the S&P 500 index may only be 3% in the coming years, significantly lower than the 13% of the past decade and the long-term average of 11%. They believe that high government bond yields may attract funds to leave the stock market and turn to other assets such as bonds. In contrast, JPMorgan analysts predict that despite a potential decline in price-to-earnings ratios, U.S. large-cap stocks will remain the backbone of investors' portfolios, with an expected annualized return of 6.7% over the next 10-15 years. The global head of JPMorgan Wealth Management stated that although price-to-earnings ratios will decline, healthier macro and corporate fundamentals will provide investors with a more solid capital allocation timing. Part of the optimism of the JPMorgan team stems from their expectations of revenue growth and profit margin improvement brought by artificial intelligence, especially for large companies that have invested heavily in this technology.

Advertisement

Value Stocks More Attractive Than Growth Stocks? This Expert Says U.S. Tech Stocks Are Too "Top-Heavy". Zacks Investment Management's client portfolio manager Brian Mulberry stated that he prefers value stocks over growth stocks. Mulberry explained that the "Seven Giants" are making valuations "a bit top-heavy". He pointed out: "From an earnings perspective, the current expected valuation of the S&P 500 index is around 22 times. If we concentrate on the Seven Giants, it is still around the mid-30s. When you look at the expected earnings growth in industries such as utilities, and their expected price-to-earnings ratios are only around 9 or 10 times, you will find that the valuation discussion for these specific industries is much more intense." Mulberry noted that there are well-performing individual stocks in these industries that will see "sustained earnings growth", providing better investment opportunities. He cited banks as an example, saying: "Therefore, we really feel that if you now turn to some more traditional value sectors, you can do better at the current valuation levels."

The Market May Misjudge the Interest Rate Trends of the Three Major Central Banks, and the "Strong Dollar" Storm is Hard to Stop. Columnist Jamie McGeever believes that the market may have misjudged the interest rate trends of the three major central banks, and the dollar is expected to strengthen further. The most significant policy path divergence may occur between the Federal Reserve and the European Central Bank. The Federal Reserve may need to slow down the pace of policy easing in the coming year, while the European Central Bank's rate cuts may be greater than what the market currently expects. If the reduction in U.S. interest rates is much lower than in Europe, this will overturn the market's common view that the dollar will weaken in the next year, meaning that the dollar's recent rebound has more room to rise. At the same time, the UK's economic growth and inflation dynamics are not so weak, but given that the fundamentals of the United States seem much stronger, traders' expectations of the same magnitude of rate cuts by the Bank of England as the Federal Reserve before 2025 are puzzling. Goldman Sachs analysts' models show that the UK's nominal neutral interest rate is around 2.75%, the same as the United States, at least 75 basis points lower than the terminal rate set by traders at present. As a result, even after the end of the easing cycle, policy may still be restrictive, which means that the Bank of England may further cut interest rates.

Is the "New Bull Market" for Gold Coming? More and More Wall Street Titans See It Rising to $3,000! Although international gold prices have repeatedly hit new highs, more and more analysts predict that gold prices can continue to rise to $3,000 per ounce. Bank of America's commodity strategist Michael Widmer recently said that gold prices "look better than ever now. I think we are close to $3,000." Widmer said that the rise in government debt levels and geopolitical uncertainties are brewing, which is why he is optimistic about the outlook. Citigroup analysts also insist that gold prices will touch $3,000 in the next 6 to 9 months. Commonwealth Bank of Australia analyst Vivek Dhar said that he expects the average gold price to reach $3,000 in the fourth quarter of next year; he also expects the average gold price to reach $2,800 this quarter. Global X investment analyst Trevor Yates believes that it is not too late to enter the market now, "We believe it is not too late to buy gold now, and the two main drivers of the gold price rally are strong physical and financial market demand."

Individual Stock NewsAfter the unexpected "accident" of the Robotaxi event, can Tesla (TSLA.US) regain investor confidence with its Q3 earnings report? Tesla is set to announce its latest performance after the US stock market closes on October 23rd. According to data from Visible Alpha, analysts expect Tesla's Q3 revenue to increase from $23.35 billion in the same period last year to $25.41 billion, with net profit expected to slightly decrease from $1.85 billion in the same period last year to $1.68 billion. Earlier this month, Tesla's third-quarter delivery data fell short of expectations but showed year-on-year growth, reversing the downturn in the previous two quarters. The company's data shows that it delivered 462,890 vehicles in the third quarter, a year-on-year increase of 6.4%, with analysts expecting 463,310 vehicles, an improvement from the approximate year-on-year declines of about 9% and 5% in the previous two quarters. Additionally, disappointingly, against the backdrop of Wall Street's high growth expectations for Tesla in the fields of autonomous driving software, Robotaxi, and artificial intelligence, the company's Robotaxi event has left a bad impression on investors. After the disappointing Robotaxi event failed to boost investor confidence, Tesla's profitability has once again come under scrutiny.

Qualcomm (QCOM.US) has been given an "ultimatum" by Arm (ARM.US), causing a significant drop in stock price before the market opens! According to reports, the UK semiconductor IP giant Arm has sent a mandatory notice to its long-term partner Qualcomm 60 days in advance, canceling Qualcomm's architectural license agreement. If a solution is not reached after the deadline, Qualcomm may no longer be able to use Arm's instruction set for chip design. Qualcomm sells billions of processors annually, with many Android smartphones using its products. The original architectural agreement allowed Qualcomm to create its own chips based on the standards owned by Arm. If the agreement is canceled, Qualcomm may have to suspend the sale of most of its products, otherwise, it will face huge claims. Arm's cancellation of Qualcomm's license agreement this time is closely related to the lawsuit between the two companies that began in 2022. Some industry insiders believe that the dispute between Qualcomm and Arm will not only disrupt the finances and operations of the two most influential companies in the chip industry but also the entire smartphone and PC market. As of press time, both Qualcomm and Arm's stock prices fell nearly 4% before the US stock market opened on Wednesday.

49 people infected, 1 death, urgently recalled! US officials warn of a connection with McDonald's (MCD.US) hamburger. The US Centers for Disease Control and Prevention (CDC) warns that McDonald's "Quarter Pounder hamburgers" have caused E. coli-related illnesses in multiple US states. The CDC said in a report that 49 people in the United States have become ill after eating "Quarter Pounder hamburgers," and the CDC has launched an investigation. It is reported that currently, 10 people, including 1 child, have been hospitalized across the country due to related infections, with 1 death. McDonald's quickly responded to the incident, with the company stating that it is taking "swift and decisive action," and noting that preliminary investigation results suggest that these illnesses may be related to sliced onions provided by a single supplier. As of press time, McDonald's stock price fell nearly 7% before the US stock market opened on Wednesday.

Coca-Cola (KO.US) Q3 performance exceeded expectations, with an average product price increase of 10%. The financial report shows that Coca-Cola's Q3 net revenue decreased by 1% year-on-year to $11.9 billion, better than the analysts' expected $11.61 billion; the operating profit margin was 21.2%, compared to 27.4% in the same period last year; comparable earnings per share were $0.77, better than the analysts' expected $0.74. Q3 unit case volume decreased by 1%, but the average product price increased by 10%. The company still predicts that the adjusted earnings per share for the full year of 2024 will increase by 5%-6%.

Boeing (BA.US) Q3 revenue slightly missed expectations, with a net loss of nearly $6.2 billion. The financial report shows that Boeing's Q3 revenue decreased by 1% year-on-year to $17.84 billion, slightly below the analysts' expected $17.89 billion; the net loss was $6.174 billion, compared to a net loss of $1.638 billion in the same period last year; the loss per share was $9.97, compared to a loss of $2.7 per share in the same period last year. Operating cash flow was -$1.3 billion; free cash flow was -$2 billion. The total backlog order amount was $511 billion, including more than 5,400 commercial aircraft. Boeing has provided an updated contract proposal, and the union will vote on Wednesday to decide whether the strike that has lasted for more than a month can end.

AT&T (T.US) Q3 performance was mixed, maintaining full-year profit guidance. The financial report shows that AT&T's Q3 revenue decreased by 0.5% year-on-year to $30.2 billion, below the analysts' expected $30.45 billion; adjusted earnings per share were $0.60, better than the analysts' expected $0.57. The company reiterated that it expects the adjusted earnings per share for the full year of 2024 to be between $2.15 and $2.25, with analysts expecting $2.20. As of press time, AT&T's stock price rose nearly 3% before the US stock market opened on Wednesday.

Texas Instruments (TXN.US) Q3 performance exceeded expectations, with an expected recovery in industrial and automotive market demand. The data shows that the company's Q3 revenue decreased by 8.4% to $4.15 billion, marking the eighth consecutive quarter of year-on-year revenue decline, but the smallest decline in seven quarters, exceeding the analysts' expected $4.12 billion; earnings per share were $1.47, with market expectations of $1.37. Supported by the rebound in terminal market demand, orders from smartphone and PC suppliers have improved, driving the sales performance of Texas Instruments' semiconductors (used in power electronic devices). However, the company's CEO, Haviv Ilan, stated that its largest source of sales—industrial and automotive chips—still faces the problem of excess inventory; when asked to predict the time of the rebound, he replied: "It's time, but we haven't seen it yet." The company said that it expects sales in the fourth quarter to reach between $3.7 billion and $4 billion, with analysts' average expectations at $4.08 billion; expected earnings per share will be between $1.07 and $1.29, with analysts' average expectations at $1.35. As of press time, Texas Instruments' stock price rose by more than 3% before the US stock market opened on Wednesday.

Deutsche Bank (DB.US) Q3 returned to profit, with revenue increasing by 5% year-on-year, exceeding expectations. The financial report shows that Deutsche Bank's net revenue in the third quarter was €7.501 billion, a year-on-year increase of 5%, better than the analysts' average expected €7.338 billion; net profit attributable to the company's shareholders was €1.461 billion, a year-on-year increase of 42%. It is worth mentioning that Deutsche Bank reported a net loss of €143 million in the second quarter due to slowing trading and the bank's inclusion of costs related to the legacy issues of the retail department of Deutsche Postbank. Deutsche Bank said that the partial release of €440 million in litigation provisions in the third quarter helped to increase profits, and the bank has now applied for a share buyback.

Starbucks (SBUX.US) Q4 same-store sales saw the largest decline in four years, and the company has suspended the release of its fiscal year 2025 performance guidance. The financial report shows that in the fourth quarter of fiscal year 2024, which ended on September 29, Starbucks' same-store sales decreased by 7% year-on-year. This decline is twice the普遍预期 of analysts and also marks the largest quarterly decline in four years. Starbucks said that suspending the release of fiscal year 2025 performance guidance will allow the new CEO, Nicole, the opportunity to assess the business and consolidate Starbucks' transformation plan to strive to regain the growth curve. Edward Jones analyst Brian Yarbrough said: "I think the time needed for this transformation is longer than some investors expected. The next few quarters may be very difficult." As of press time, Starbucks' stock price fell nearly 4% before the US stock market opened on Wednesday.