October 27th Pre-Market Brief

Good Morning

The midterms are one week out, and stocks have been higher a year after every midterm since 1950. That’s 19 for 19.

Modest green to start, earnings are doing the talking. Whirlpool is getting hit while JetBlue and Celestica are way up. The market that moves on actual results instead of headlines is nice for a change.

Let's dig in...

Today's Big Picture

1. The Fed’s Next Hike Would Hit Borrowers Hardest
   
   The Fed’s meeting starts today, and traders expect no rate change tomorrow but a hike in December. Mohamed El-Erian says that hike would hit housing, car loans and other borrowing far more than tech. That cuts against October’s trade, which moved money from tech into the rest of the market.
   

2. Rate Hikes Can Still Reach AI Through Its Lenders
   
   Broadcom $AVGO is up after banks lined up $63 billion so Anthropic can rent its chips. Broadcom is guaranteeing most of it, and the banks capped the interest rate. They won’t sell the loans until next year, so a rate hike before then could cost them. Some banks nearly walked away over that risk.
   

3. Israel Votes Today, but Netanyahu Likely Stays Past Nov. 3
   
   Polls show neither Netanyahu nor rival Gadi Eisenkot near a majority. Forming a government could take weeks, and Netanyahu stays in office until one forms. The U.S. and Israel have reportedly drawn up plans for possible strikes on Iran after the Nov. 3 midterms. Oil is lower on talks in Tehran, but Netanyahu will likely still be in charge if those plans move.

Market Overview

Today’s Sponsor

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Stock Spotlight (pre-market)

Coca-Cola $KO ( ▼ 0.18% )  

little changed premarket as flat North American volume offset an earnings beat and a third straight raise to its full year profit outlook. The soda giant’s growth came from overseas, and its CFO says costs will stay tough into 2027.

Boeing $BA ( ▼ 0.02% )  

lower premarket after the jet maker posted a wider loss than expected, as its commercial jet unit lost money. Defense sales lifted revenue past estimates, and executives update 737 Max production plans at 10:30 AM ET.

Whirlpool $WHR ( ▼ 5.91% )  

is getting hit hard premarket after the appliance maker posted a surprise loss and cut its full year revenue forecast to $14.5 billion from $15 billion. It now expects to lose $1.30 a share this year, versus the $1.55 profit analysts expected.

JetBlue $JBLU ( ▲ 12.66% )  

sharply higher premarket after the airline guided to better fourth-quarter profit margins, even with fuel costs set to nearly double. It reported a day early, and the outlook outweighed a wider-than-expected third-quarter loss.

Celestica $CLS ( ▼ 5.14% )  

is sharply higher premarket after the contract electronics maker beat third quarter estimates and raised its full year profit forecast. It now expects adjusted earnings of $11.55 a share, up from $11.30 and above the $11.16 analysts expected.

General Motors $GM ( ▲ 3.96% )  

is higher premarket after the automaker said it will move its stock listing to the Nasdaq from the NYSE on Nov. 17. The switch makes GM eligible for the Nasdaq-100, and funds that track that index would buy shares if it gets added.

What to Watch

Visa Earnings (After the Bell)
Visa’s results show whether Americans are still spending with prices this high. The stock hit a record this month while analysts barely moved their profit estimates. That leaves little cushion if results only match the $3.43 a share Wall Street expects.

Alphabet Earnings (Wednesday)
Alphabet booked about $136 billion in first-half investment gains, and Amazon’s came mostly from Anthropic. Those paper gains were most of both companies’ pretax profit. Part of the earnings meant to prove AI is worth the money comes from AI valuations going up.

Today’s Sponsor

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