The Daily Breakdown takes a closer look at the week ahead, with Palantir and AMD earnings due up. Amazon breaks out to record highs.
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Weekly Outlook
Last week, markets gyrated through a loaded calendar of earnings that included five of the Magnificent 7 holdings. We’re starting a new week and a new month, but a lot remains the same: The government shutdown drags on and earnings keep on rolling.
Jobs Update
We’re finally going to get a labor market update this week, as ADP will provide its monthly private payrolls report. It’s based on the payroll data of ~400,000 US businesses, and while the ADP report isn’t necessarily indicative of the monthly jobs report we usually get from the Bureau of Labor Statistics, it’s at least something to work with.
Earnings
When it comes to earnings, a few stocks headline this week, including Palantir and Hims & Hers reporting on Monday, and Uber, Advanced Micro Devices, Super Micro Computer, and Rivian reporting on Tuesday. McDonald’s, Robinhood and Lyft will report on Thursday, while Airbnb, SoundHound AI, The Trade Desk and DraftKings will report on Thursday.
Crypto
Seasonally, October has been Bitcoin’s best month over the last decade — which is why bulls are scratching their heads as it ended the month lower by about 4%. Ethereum fell more than 7%, while Solana dipped about 10%. All three are under pressure this morning, too. On the plus side, Q4 tends to be a rather strong period for this group as well, as it’s Bitcoin’s best-performing quarter over the last 10 years.
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The Setup — AMZN
Amazon stock soared almost 10% on Friday, hitting new record highs in the process. Investors have been waiting for this Mag 7 laggard to regain some momentum and now, many are hoping that last week’s action is the start of something bigger.
The $235 to $240 zone had become major resistance for Amazon stock, but on Friday, shares broke out over this area and rallied to as high as $250.50 during the session. Moving forward, bullish momentum could continue as long as AMZN stock is over this key breakout zone, giving bulls more confidence to buy the dip. However, a move back below this zone and momentum could shift into the bears’ favor.
Options
As of October 31st, the options with the highest open interest for AMZN stock — meaning the contracts with the largest open positions in the options market — were the December $300 calls, followed by the December $235 calls.
For some investors, options could be one alternative to speculate on AMZN. Remember, the risk for options buyers is tied to the premium paid for the option — and losing the premium is the full risk. Bulls can utilize calls or call spreads to speculate on further upside, while bears can use puts or put spreads to speculate on the gains fizzling out and AMZN rolling over.
For those looking to learn more about options, consider visiting the eToro Academy.
What Wall Street’s Watching
KVUE
Shares of Kenvue are rising this morning on news that Kimberly-Clark will acquire the company for $40 billion. You may recall that Kenvue — which produces products like Tylenol, Neutrogena, Listerine, Benadryl and Band-Aid — was spun off from Johnson & Johnson in August 2023. For what it’s worth, Kimberly-Clark stock is down more than 10% on this morning’s news.
META
Meta stock fell more than 2% on Friday and hit its lowest level since June 2nd as investors continue to digest the firm’s earnings report. While adjusted earnings beat analysts’ expectations, a large tax hit weighed on the company’s bottom line. Ultimately, shares fell about 12% last week. Check out the charts for META.
Disclaimer:
Please note that due to market volatility, some of the prices may have already been reached and scenarios played out.
