👉 Tesla's "We, Robot" Event

Welcome to your new week.

With Hurricane Milton heading toward Florida — we urge all of our Floridian / South Georgian readers to take the necessary steps to prepare. Please stay safe!

Key Earnings Announcements:

A light week of earnings before it starts to heat up – featuring BlackRock, Delta, Dominos, Pepsi & JPM.

Monday (10/7): Duckhorn

Tuesday (10/8): PepsiCo

Wednesday (10/9): AZZ, Helen of Troy

Thursday (10/10): Delta Airlines, Domino’s Pizza, Tilray

Friday (10/13): BlackRock, BNY, JPMorgan Chase & Co, Wells Fargo

What We’re Watching:

1. Delta Airlines (DAL)

Delta Air Lines (+22.5% YTD) will report its Q3 results on Thursday before the market opens. Delta shares have dropped -10% since May due to concerns over rising fuel costs and shrinking margins. However, lower oil prices and Fed rate cuts are expected to boost margins and consumer spending.

Delta has beaten EPS estimates in 5 of the last 8 quarters, and its strong free cash flow and improving balance sheet suggest it is well-positioned for continued growth, though some analysts caution long-term investors may want to wait for a better entry point.

During the last earnings call — CEO Ed Bastian said “For the September quarter, we expect a double-digit operating margin and a pre-tax profit of approximately $1.5 billion. With strong first-half results and visibility into the second half, we remain confident in our full-year guidance.”

• Analysts expect $1.52 GAAP EPS on Revenue of $15.25 billion.

• You can explore the most recent DAL investor release here and here.

2. PepsiCo (PEP)

PepsiCo (-1.1% YTD) will report its Q3 earnings tomorrow before the market opens. In most recent news, the company announced its $1.2B acquisition of Siete Foods – aiming to expand its healthy product offerings.

Strong pricing power and brand loyalty have helped drive margin growth, especially in its North America Beverage segment. Despite these strengths, PepsiCo’s stock has been under pressure, falling amid weaker demand. Its partner Celsius Holdings (CELH) has also struggled — seeing its stock drop -62% over the past 6 months.

While PepsiCo is anticipated to beat EPS expectations once again, challenges remain including Quaker Foods' underperformance due to recalls and the need for increased marketing investment to fend off competitors. Bullish analysts view the stock’s recent weakness as a buying opportunity, though others caution about its valuation and debt load.

• Analysts expect $2.30 GAAP EPS on Revenue of $23.78 billion.

• You can explore the most recent PEP investor release here and here.

Investor Events / Global Affairs

NVIDIA & AMD AI Days, Amazon Prime Two-Day Sale, and Tesla’s “We, Robot” Event.

• AI Days

NVIDIA’s (+152.2% YTD) AI Summit is set to begin today and run through Wednesday (10/9). This three-day event will bring together industry leaders from Dell, Hewlett Packard, Microsoft, Oracle and more to explore AI’s role in addressing major societal challenges. With a broad focus on sectors like healthcare, cybersecurity, manufacturing, and telecommunications — NVIDIA will host sessions on how AI can drive innovation in areas such as edge computing, industrial digitalization, and quantum computing.

I’m eager to hear updates about Nvidia’s new Blackwell GPU’s. When asked in an interview last week — CEO Jensen Huang said the demand is “insane.” 

Advanced Micro Devices (+15.94% YTD) also will host its Advancing AI 2024 event — unveiling the latest AMD Instinct accelerators and 5th Gen AMD EPYC server processors.

The event will feature discussions on advancements in networking, updates on AI-powered PCs, and a comprehensive look at AMD's AI solutions ecosystem.

• Amazon (AMZN) Prime 2-Day Sale

Amazon’s (+22.7% YTD) two-day Prime Day event begins tomorrow, providing valuable insights into consumer spending and e-commerce trends as the holiday season approaches. This event is anticipated to reveal consumer preferences and best pricing strategies ahead of the holidays — so it should serve as a key indicator for Q4 retail performance.

Earlier this year, Amazon generated over $14.2 billion during its first Prime Day event.

• Tesla (TSLA) RoboTaxi Event

Tesla’s (+0.64% YTD) “We, Robot” event on Thursday promises to be a game-changer as CEO Elon Musk will unveil not only the anticipated Robotaxi, but also potentially two other vehicles: the $25,000 Model 2 (or Model A) and a Cybervan.

The Robotaxi prototype is expected to have a futuristic, minimalist design without a steering wheel, pedals, or mirrors, embodying Tesla’s vision of fully autonomous transportation. Alongside the vehicle unveiling, Tesla will also share updates on its booking platform for owners and riders, its Full Self-Driving (FSD) technology — which powers the robotaxis — and a production timeline with anticipated service launch date. 

Major Economic Events:

The Fed’s preferred inflation gauge – CPI – returns & minutes of the FOMC September meeting are released

Monday (10/7): Consumer Credit, Fed Gov Bowman Speaks, STL Fed President Musalem Speaks

Tuesday (10/8): ATL Fed President Bostic Speaks, Fed Gov Kugler Speaks in Europe, Fed Reserve Vice Chair Jefferson Speaks, U.S. Trade Deficit

Wednesday (10/9): ATL Fed President Bostic Speaks, CHI Fed President Goolsbee Speaks, DAL Fed President Logan Speaks, Minutes of Fed’s September FOMC Meeting, Wholesale Inventories

Thursday (10/10): Consumer Price Index & (Core CPI), Fed Reserve Gov Cook Speaks, Initial Jobless Claims, NY Fed President Williams Speaks, Richmond Fed President Barkin Speaks

Friday (10/11): CHI Fed President Goolsbee Speaks, Consumer Sentiment, Dallas Fed President Logan Speaks, Fed Reserve Gov Bowman Speaks, Producer Price Index & (Core PPI)

What We’re Watching:

1. Consumer Price Index (CPI)

Inflation remains a key focus for the Fed, with the target still above the desired +2% level. Wall Street anticipates that headline inflation for September will have slowed to a +2.3% annual increase, down from +2.5% in August — the slowest rate since early 2021.

Month-over-month, prices are expected to rise by +0.1% — a further decrease from the +0.2% increase seen in May.

2. Fed Meeting Minutes (September)

The Federal Reserve reduced the federal funds rate by a substantial 50 basis points to a target range of 4.75%-5.0% in September — marking the first rate cut since March 2020. While the move was widely expected, some had anticipated a smaller 25 bps cut.

New economic projections from the Fed indicate plans for 100 bps of rate reductions by the end of 2024, implying two additional 25 bps cuts this year. Looking ahead, policymakers project another percentage point of cuts in 2025, followed by a final 50 bps reduction in 2026.

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Cover Image Credit: Luis Sinco, Los Angeles Times

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