What to watch in the markets, week of 10/21/2024

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• Earnings season is off to a solid start, with 80% of S&P companies beating expectations. We have some big earnings coming up, including:
  

  • Oct 21: NUE 

  • Oct 22: GE, PM, TXN, LMT, 3M, GM, PHM 

  • Oct 23: TSLA, KO, TMO, NOW, NEE, BSX, LRCX, BA

  • Oct 24: HON, KKR, UPS, AAL, LUV  -Oct 25: SNY, CL 
    

• Most of the Magnificent 7 are reporting next week. Insiders have been selling shares into all-time-highs (ATHs), which could be profit taking, but any time we're at ATHs, it's a good idea to temper your exuberance and ensure you're hedged to the downside.
  

• The IMF is reporting its economic outlook on Tuesday. They're expected to highlight the mounting debt of multiple countries. 
  

• A couple of major factors are also influencing markets: economic health in the US (and other large countries) and geopolitics, particularly the Middle East. Uncertainty continues to loom as the presidential election approaches. 
  

• Goldman analysts say that after 2024, big tech outperformance in the S&P will level out and broaden into other sectors, with the equal-weighted S&P outperforming the megacap-only index. What does this mean for you? Ensure you're not too heavily concentrated in tech stocks only - look to broaden and diversify. Don't forget about bonds, cash, crypto and international markets. Speaking of diversifying, gold hit another ATH. 
  

• Before you panic about US equities, the Economist released a report about US economic strength, noting the following:  In 1990, the US accounted for 40% of the GDP of the G7 group of wealthy countries. Today, it makes up roughly half. -US economic output per person is 40% higher than in Western Europe and Canada, and 60% higher than in Japan.
  

• AI startup Perplexity is in talks to raise $500M at a ~$9B valuation. They are building a search engine to rival Google.