New York Morning: Reporting season is heating up

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

Investors' attention will be focused on the publication of quarterly results today. The confident start of the reporting season supports positive market sentiment, especially against the background of the lack of macro data due to the ongoing shutdown. According to Bank of America, about 75% of issuers from the S&P 500 index, who have already reported, exceeded analysts' forecasts. The main contribution to the total profit of the benchmark is still made by technology giants. According to FactSet's calculations, the "Magnificent Seven" companies will show 14.9% YoY profit growth, while the rest of the index will rise by only 6.7%.

In addition, the October non-manufacturing business activity index from FRB Philadelphia (September: -12.3 p.) is expected to be released on Tuesday. This statistic will give an idea about the state of the regional economy and the dynamics of business sentiment in the services sector.

Before the open, Lockheed Martin (LMT), RTX Corp (RTX), GE Aerospace (GE), General Motors (GM), Coca-Cola (KO) and Philip Morris (PM) will report quarterly results. Netflix (NFLX), Texas Instruments (TXN) and Capital One Financial (COF) will report after the end of the main session.

Futures on US indices demonstrate about zero dynamics. We assess the balance of risks for the upcoming session as neutral with average volatility. We focus on the S&P 500 movement in the range of 6680-6780 points (from -0.8% to +0.7% to the closing level of the previous session).

- DocGo (DCGO) stock soared nearly 50% on the premarket in the moment after announcing the acquisition of virtual medical platform SteadyMD. The purchase will strengthen DocGo's position in telemedicine.

- Fluor (FLR) shares were adding about 6% after The Wall Street Journal reported that activist fund Starboard Value had acquired about 5% in it and suggested that Fluor's core business is undervalued by the market. The fund sees this assessment as particularly relevant to Fluor's 40% stake in Nuscale Power (SMR).

- Rocket Lab (RKLB) shares reacted with moderate growth to the announcement of a new mission for the Japanese iQPS company. The launch, which will be the 74th for the company, is scheduled for Nov. 5 from New Zealand. It will put into orbit the QPS-SAR-14 satellite for high-precision radar monitoring of the Earth.

- Alibaba Group 's (BABA) stock added about 4% in the extended session the day before on news that it is developing a new AI project aimed at competing with offerings from ByteDance (owner of TikTok). According to Sina Tech, Alibaba's Quark division is leading an initiative called "Plan C" aimed at creating conversational AI products that could be a competitor to ByteDance's Doubao chatbot . However, at the pre-market on October 21, BABA's quotes changed direction and were down more than 1%.

October 20 trading on American stock exchanges ended with a steady growth. The S&P 500 added 1.07%, the Nasdaq 100 rose 1.3%, the Dow Jones rose 1.12%, and the Russell 2000 gained 1.95%. The "Magnificent Seven" stocks mostly closed in the green, with Apple (AAPL: +3.94%) rising on reports of strong demand for the new iPhone 17 in the U.S. and China, and Nvidia (NVDA: -0.32%) the outperformer, with mining (XLB: +1.19%) and industrials (XLI: +1.18%) leading the gains. Only non-cyclical consumer staples (XLP: -0.09%) and utilities (XLU: -0.03%) were token losers.

Investor optimism was supported by signals that trade tensions between Washington and Beijing are easing. US President Donald Trump expressed confidence in reaching a "fair and mutually beneficial agreement" with China and confirmed an invitation to visit Beijing in early 2026. The White House, according to financial media, is discussing a possible easing of duty policies, including the introduction of additional exemptions for certain categories of goods to reduce pressure on domestic markets. The announcements eased fears of an escalating trade conflict and boosted quotations in global trade-sensitive sectors such as industrials and technology.

Meanwhile, the shutdown in the United States continues for the third week. The White House expressed cautious optimism about its imminent end. Kevin Hassett, the president's economic adviser, said the shutdown could be lifted by the end of the week, although key differences between Democrats and Republicans on health care issues, including the extension of subsidies under the ACA program, remain unresolved. According to Politico and CNN, the parties' positions remain far from compromise, but the administration is taking steps to minimize pressure on federal workers and maintain political unity among Republicans.

- Shares of Cleveland-Cliffs (CLF: +21.5%) soared following the release of its third-quarter report, in which the company's EBITDA exceeded consensus. Adding further positivity was the issuer's announcement that it has signed a memorandum of understanding (MoU) with one of the world's largest steel producers. Management called the agreement "highly profitable" and strategically significant. In addition, Cleveland-Cliffs reported that it is exploring the possibility of mining rare-earth metals at its own deposits.

- WW International (WW: +9.3%) shares rose after announcing a partnership with Amazon Pharmacy amid strong demand for GLP-1 class drugs. The new partnership will provide WW members with the ability to check medication availability in real time and receive medications with fast home delivery, strengthening the company's position in the digital health market.

- Archer Aviation (ACHR: +6.6%) rose on news that Korean Air has chosen it as its exclusive partner for the introduction of eVTOL aircraft. As part of the agreement, the carrier plans to purchase up to 100 Midnight model aircraft, which will open Archer's access to the Asian urban aviation market.

- Blackstone and TPG funds are in final negotiations to buy Hologic (HOLX: +2.9%). The potential deal, which could be announced in the coming days, is valued at more than $17 billion, or about $75 per share.

- Quotes of AppLovin (APP: -5.6%) reacted negatively to the publication of the New York Post about a new round of regulatory investigation concerning the company's handling of user data. According to the publication, a number of affiliated data brokers associated with AppLovin have received regulatory subpoenas. Earlier, the SEC launched a probe into the company's data practices, which added pressure on its stock.

This article was AI-translated and verified by a human editor