Morning Brief | Tesla surged 13% cause Q3 profit beat, Boeing's Union Rejects Deal
3min read Pre-market Movers
Ahead of Thursday's trading, the three major U.S. stock index futures performed differently, with Dow futures down 0.15%, S&P 500 futures up 0.51%, and Nasdaq 100 futures up 0.91%, thanks to Tesla's rise over 10% at Pre-market trading.
Tesla's stock surged 13% in pre-market trading. It's Q3 net profit exceeded expectations, and Elon Musk confirmed plans to accelerate the development of affordable models and Uber-like ride-hailing services.
Boeing's stock fell nearly 3% in pre-market trading as workers voted to reject a proposed pay adjustment plan and continued their strike, which has lasted more than five weeks.
IBM's stock dropped over 3% in pre-market trading due to weaker-than-expected third-quarter revenue, with lackluster performance in its consulting and infrastructure divisions.
Market Watcher
GS and Citi Predict Lower Stock Returns, While JPMorgan Remains Optimistic
Recently, Goldman Sachs strategists have warned that the S&P 500 could deliver an annualized return of only 3% going forward. Citigroup strategists also highlighted that exposure to the S&P 500 has reached levels that have historically been followed by a 10% decline. However, JPMorgan disagrees with this outlook.
Analysts from JPMorgan Chase's asset and wealth management divisions are more optimistic. They predict that U.S. large-cap stocks—the big companies that have driven much of the recent gains—will remain a core part of investors' portfolios and deliver an annualized return of 6.7% over the next 10 to 15 years.
Monica Issar, Global Head of Multi-Asset and Portfolio Solutions at JPMorgan Wealth Management, explained, We've already factored in a contraction in U.S. stock valuations, but we believe that will be offset by stronger macroeconomic and corporate fundamentals over the next decade, providing a solid foundation for investors to allocate capital.
Part of JPMorgan's optimism comes from the expectation that artificial intelligence will lead to higher revenue growth and increased profit margins, especially for the large companies heavily investing in this technology.
I'm aware of the higher valuations, but I'm more confident in our projections than theirs over the next decade, said David Kelly, Chief Global Strategist at JPMorgan Asset Management. Overall, we believe American corporations are incredibly competitive—they know how to expand profit margins effectively.
Pre-market Headlines
NVIDIA Successfully Fixed Blackwell Design Flaws with TSMC's Help, According to Jensen Huang
NVIDIA CEO Jensen Huang stated on Wednesday that the design flaws in NVIDIA's latest Blackwell AI chip have been fixed with the help of long-term partner TSMC, which previously affected production. He also refuted rumors of a rift between NVIDIA and TSMC, stating that TSMC remains an obvious partner, and NVIDIA is very grateful for TSMC's strong assistance in helping NVIDIA successfully fix the flaw and enable the Blackwell chip series to be mass-produced smoothly.
Boeing's Union Rejects Deal, Extends Five-Week Strike
Boeing's crisis deepens as workers ruthlessly rejected a wage-raising offer and plan to extend their more than five-week strike, halting most manufacturing activities. The vote to dismiss the deal was 64%, the union said, despite the offer including a 35% wage increase over four years and a signing bonus ranging from $3,000 to $7,000.
Apple Slashes iPhone 16 Orders Amid Weak Demand, Analyst Reports
There 2 bad news for Apple. First, the well-known Apple supply chain analyst Ming-Chi Kuo Apple has reduced orders for the iPhone 16 by about 10 million units for the fourth quarter of this year and the first half of 2025;
Second, According to sources told the media, Apple has significantly reduced the production of its mixed reality headset Vision Pro since the beginning of this summer and may stop producing the current version of the product before the end of the year. One employee revealed that their factory had already suspended production of Vision Pro components in May.
World at A Glance
Weight-loss drugs didn't save health costs in two years
Drugs like Wegovy may trim your waistline but not medical costs, according to an analysis of U.S. health insurance claims shared with Reuters.
The full-year cost of care for U.S. patients with obesity two years after starting on Nordisk's Wegovy or similar GLP-1 drugs was $18,507, on average. That represents a 46% jump over the average annual medical cost of $12,695 prior to taking the medication, data provided by pharmacy benefits manager Prime Therapeutics show. The costs for a similar control group of patients not taking the drugs grew by 14% for the same period.
Novo Nordisk asks US to stop compounding pharmacies from making weight-loss drug copies
Novo Nordisk asked the U.S. Food and Drug Administration to ban compounding pharmacies from making copycat versions of its popular weight-loss and diabetes drugs, which it said were too complex for those manufacturers to produce safely.
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