The major U.S. equity indexes opened lower and traded mostly in the red through a relatively quiet Monday session, as investors took a wait-and-see approach to stocks ahead of earnings reports this week from one-fifth of the S&P 500's component companies.
The Nasdaq Composite peaked above the breakeven line early then bounced off its intraday low late, crossed into positive territory ahead of the closing bell and ended the day higher by 0.3% at 18,540, led by Nvidia (NVDA).
The S&P 500 ended the trading day down 0.2% at 5,853, while the Dow Jones Industrial Average shed 0.8% to close at 42,931.
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NVDA proved an exception in every respect, gapping up at the open and hitting a new all-time closing high about a month before it reports its highly anticipated fiscal third-quarter results on November 20.
The artificial intelligence semiconductor maker was the most actively traded stock on Monday, rising more than 4% from Friday's close. Investors continue to bid the stock up on the expectation of ever-growing Big Tech capex budgets and today's gains just add to its impressive 20-year return.
Tesla slips ahead of earnings
We'll begin to get a real look at those budgets when Tesla (TSLA) reports its third-quarter financial and operating results after the closing bell on Wednesday.
Ahead of its turn on the earnings calendar, TSLA closed down 0.8% on Monday. The electric vehicle (EV) maker uses Nvidia graphics-processing units to power the AI computers behind its driver-assistance system and its robots.
With quarterly EV delivery data already public and its robotaxi event in the rearview mirror, investor attention will be on profit margins and vehicle demand.
Wall Street expects Tesla to report third-quarter earnings per share (EPS) of 58 cents on revenue of $25.4 billion. The EV maker reported EPS of 66 cents on revenue of $23.4 billion a year ago.
An LEI letdown
The Conference Board said its Leading Economic Index (LEI) declined by 0.5% in September following a 0.3% decline in August, a steeper slide than forecast only coincident to Monday's price action.
According to Justyna Zabinska-La Monica, senior manager of Business Cycle Indicators at The Conference Board, "Weakness in factory new orders continued to be a major drag on the U.S. LEI in September as the global manufacturing slump persists."
Though they note the LEI has now fallen "to a level last seen in 2016," Wells Fargo analysts Tim Quinlan and Jeremiah Kohl also say "this once-widely followed gauge has a credibility problem."
Quinlan and Kohl "maintain that the U.S. economy is achieving a soft landing." They further assert that "even if a recession were to start tomorrow, it would not redeem the fact that for more than two and a half years the LEI has cried wolf.”
The Wells Fargo analysts also point out that the LEI lately conflicts with other conventional forecasts, including the Federal Reserve's Summary of Economic Projections.
The central bank will share color on economic conditions across its 12 regional districts when it releases the Fed Beige Book on Wednesday at 2 pm Eastern time.
Two weeks till Election Tuesday
On the eve of the final fortnight of the U.S. presidential campaign, a Bloomberg Markets Live Pulse survey conducted October 14 through October 18 found that 45% of 411 respondents said earnings matter most between now and the end of the year.
Thirty-nine percent said the election is their primary concern, and 16% identified Federal Reserve rate cuts as their front-of-mind issue.
We're now tracking the potential impact of policy proposals from political candidates on your pocketbook, your portfolio and your long-term planning at our live election blog.
Boeing soars on strike settlement
Boeing (BA) rallied 3.1% after the aerospace giant announced over the weekend a tentative agreement with the union representing 33,000 of its workers who walked off the job five weeks ago seeking higher pay and improved benefits.
Striking machinists will vote on the proposal on Wednesday. Ratification would end a work stoppage that's halted production of Boeing's 737 MAX and its 767 and 777 models since September 13.
On October 15, Boeing finalized a new $10 billion credit agreement and filed to raise up to $25 billion in stock and debt offerings. Management also announced plans to cut 10% of the workforce, or approximately 17,000 employees.
Boeing, under intense public scrutiny and mounting financial pressure, will report third-quarter earnings on Wednesday morning, with management hosting its conference call at 10:30 am Eastern time.
Boeing said in a preliminary earnings report on October 11 that it expects to post a loss of $9.97 per share on $17.8 billion of revenue. A year ago, it reported a per-share loss of $3.26 on revenue of $18.1 billion.
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