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Market Performance
The Portfolio
Below is news specific to Lockstep's Portfolio:
Company News
Economic Insights
While the US Treasury revealed where it will borrow the $776 billion it needs to fund government spending in the fourth quarter (Q4), Fed Chair Jerome Powell did them a favour and kept interest rates unchanged.
The market reacted positively to the news not because it was unexpected but because of a change in tone during Powell’s commentary.
Stocks Moving The Market
The usual suspects, “The Magnificent Seven”, led the market higher yesterday, with Nvidia (NVDA), Meta Platforms (META), and Amazon (AMZN) leading the way, posting gains of +3.8%, +3.5%, and +2.9%, respectively.
However, Advanced Micro Devices (AMD) was the true standout of the day. Its robust data centre growth forecast boosted AMD’s share price by +9.7%.
The best-performing stock yesterday was Generac Holding (GNRC), as the power generation company reported growth in Q3 revenue and profits. But its strong cash flow generation was enough to appreciate the company’s value by +14.4%
Trane Technologies (TT), an HVAC company, achieved 12% year-on-year (YoY) growth in Q3 2023 revenue and raised both its full-year (FY) 2023 revenue and earnings guidance. The market responded positively, driving TT’s stock price up by +12.2%.
However, not all companies thrived during this market upturn.
The Estee Lauder Companies (EL) experienced a substantial -18.9% loss in value after reporting Q1 2024 results. EL lowered its FY guidance, citing headwinds from Mainland China and the Middle East.
But EL’s performance yesterday is nothing compared to payroll and HR service provider Paycom (PAYC), as it witnessed a dramatic -38.5% value decline in a single day. Although Q3 2023 revenue and earnings grew by 22% and 44% YoY, concerns arose when the CEO mentioned certain services cannibalizing other revenue streams and offered a weaker-than-expected outlook. In response, some analysts more than halved their target price for the company.
Earnings Season Highlights
During earnings season, we highlight the earnings from some better-known companies and give you a heads-up of which firms are reporting:
REPORTED EARNINGS: 1st November 2023
TODAY’S EXPECTED EARNINGS: 2nd November 2023
This is a condensed version of Lockstep's Daily Catchup Newsletter. For more details plus references to sources, sign up here and receive the full newsletter directly in your inbox.