October 22nd Market Overview

Happy Wednesday

Markets pulled back on fresh China trade fears. White House weighing export curbs on anything made with U.S. software…laptops, jet engines, medical devices.

I think it's a negotiating chip before Trump meets Xi, but markets don't care about intent when uncertainty shows up.

Tesla reports tonight. Everyone's watching guidance now that the EV credit is gone. Gold fell again after yesterdays plunge when something goes parabolic like that, pullbacks are inevitable.

Let's dig in...

Today's Big Picture

1. Software Export Curbs Loom Over China Trade

The Trump administration is weighing restrictions on exports to China made with U.S. software. This could hit laptops, jet engines, medical devices, basically anything manufactured using American software. Treasury Secretary Bessent confirmed it Wednesday. It's a negotiating chip before Trump potentially meets Xi Jinping, and it's creating uncertainty.

2. Earnings Painted a Mixed Picture

Netflix $NFLX ( ▼ 1.7% ) missed hard, reporting $5.87 per share versus the $6.97 estimate. A Brazilian tax dispute is the culprit. Revenue hit $11.51 billion but shares tanked anyway. Texas Instruments $TXN disappointed with weak Q4 guidance, dragging the semiconductor sector down with it. Intuitive Surgical $ISRG crushed it on demand for its da Vinci surgical robots.

3. Meme Stock Mania Returns With Beyond Meat

Beyond Meat $BYND ( ▼ 23.06% ) is having a wild week that has nothing to do with its business. The stock swung hard Wednesday, spiking before giving it all back. Still up over 300 for the week after landing in a Meme Stock ETF and announcing a Walmart deal. Over 1.6 billion shares traded—second highest in the market. Pure speculation.

Market Overview

Index Performance

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Stock Spotlight

Intuitive Surgical $ISRG ( ▼ 0.87% ) 
rallied after crushing earnings on strong demand for its da Vinci surgical robots. The company beat on both profit and revenue.

Texas Instruments $TXN ( ▼ 1.78% ) 
dropped after weak Q4 guidance. The chip company's forecast came in well below expectations, dragging down the semiconductor sector.

Beyond Meat $BYND ( ▼ 23.06% ) 
kept swinging on massive volume. The stock is up over 400% for the week on pure retail speculation.

Big Name Updates

Netflix $NFLX ( ▼ 1.7% ) 
sold off hard after missing profit estimates. A Brazilian tax dispute hit margins. Revenue met expectations at $11.51 billion.

Amazon $AMZN ( ▲ 1.43% ) 
could save $2 billion to $4 billion annually by 2027 through robotics automation, per Morgan Stanley. Internal docs show plans to automate three-quarters of U.S. operations by 2033, potentially cutting over 600,000 jobs.

Volkswagen warned production stoppages are possible due to chip supply disruption from Nexperia, a Dutch chipmaker caught between Netherlands and China. Supply chain fragility on display.

Warner Bros. Discovery $WBD ( ▼ 0.47% ) 
rejected three takeover bids from Paramount $PARA. Last offer came in just under $24 per share. Stock rallied on speculation more offers could come.

Other Notable Company News

DraftKings $DKNG ( ▼ 4.9% ) 
is buying predictions platform Railbird.

Uber $UBER ( ▼ 0.57% ) 
will pay drivers $4,000 to switch to EVs in four states. Also rebranding Uber Green to Uber Electric.

Mattel $MAT ( ▼ 3.81% ) 
missed estimates on weak North American sales.

Novavax $NVAX ( ▲ 1.91% ) 
is selling a Maryland facility for $60 million to cut $230 million in costs over 11 years.

Applied Digital $APLD ( ▲ 0.15% ) 
signed a $5 billion AI factory lease with a U.S. hyperscaler. 15-year deal delivers 200 MW at its North Dakota campus.

Sector Watch

Bond Market

Treasury yields were little changed as investors watch Washington on trade and the shutdown. Gold fell for a second day, settling around $4,065 per ounce after profit-taking following its run above $4,000.

Policy Watch

Trade & Tariffs

The administration is preparing a Section 301 investigation into whether U.S. trading partners underpay for prescription drugs. Trump keeps citing Ozempic: $936 per month in the U.S. versus $83 in France. This could trigger new tariffs on medicines and reignite tensions with Europe, Canada, and Asia.

The U.S. and India are close to a trade deal that would slash U.S. tariffs on Indian exports from around 50 down to 15-16. India may cut Russian oil imports and open access for U.S. corn and soymeal in return.

International

• Japan's new Prime Minister is preparing large economic stimulus to tackle inflation

• Trump visits Japan October 27-29, his first trip there in nearly six years

• Treasury Secretary Bessent said the U.S. will impose "substantial" sanctions on Russia

Domestic

The government shutdown continues with no resolution in sight. ICE arrested nine immigrants in a New York City raid targeting counterfeit goods on Canal Street.

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What To Watch

Tesla Earnings Tonight

Reports after the bell. Analysts expect record revenue and profit, but the real question is guidance now that the $7,500 EV credit expired. Options are pricing in a 7 move either way. At 191 times earnings, guidance matters more than the quarter.

Friday's Delayed CPI Report

September's consumer price index drops Friday at 8:30 a.m. ET after the shutdown delay. Economists expect 3.1 inflation on both headline and core. The Fed will be watching this closely before their next rate decision. Any surprise moves markets.

Mag Seven Earnings Ramp

Tesla kicks off big tech earnings. IBM $IBM also reports today. Intel $INTC, Ford $F, Blackstone $BX, and T-Mobile $TMUS report Thursday. Over three-quarters of S&P 500 companies have beaten so far, but guidance is what counts.

China-U.S. Meeting Uncertainty

Trump said his meeting with Xi Jinping might be called off. The software export curbs are clearly a negotiating tactic. Any news on whether this meeting happens will move markets.

Thanks for reading 🙂

- John