Stocks stumbled on their first day of the fourth quarter as tensions in the Middle East escalated. That and several other macro headwinds sent most risk assets to the downside, with oil prices catching a bid after several months of downside. 👀

Today's issue covers the latest mix of “macro” headwinds, under-the-radar dealmaking, and why Nike is not doing so well... 📰

Here’s the S&P 500 heatmap. 4 of 11 sectors closed green, with energy (+2.28%) leading and technology (-2.44%) lagging.

And here are the closing prices: 

Most bullish/bearish symbols on Stocktwits at the close: 📈 $HUSA, $INDO, $ICCT, $PK, $EONR 📉 $HUM, $HPH, $LW, $AVXL, $WING*

*If you’re a business and want to access this data via our API, email us.

Investors came into today with concerns about the impact of the U.S. dockworkers' strike on the economy and markets. As of midnight, the strike had halted half the nation’s ocean shipping. ❌

U.S. East Coast and Gulf Coast dockworkers are staging their first large-scale strike in nearly 50 years as they attempt to capitalize on a still tight(ish) labor market to secure better compensation, benefits, and some job security against automation.

Stocks related to the sector, including shipping giants like Maersk and truckers like Landstar System, were hit on fears this could impact their long-term results. Meanwhile, FedEx and other alternative modes of transportation found a bid as investors bet on them picking up the seabound slack. 🚢

Additionally, U.S. labor market data began to trickle in today, with the JOLTs data showing that the quits rate fell to its lowest level since June 2020 as the hiring rate slumped to its lowest since 2013 (excluding the pandemic). The labor market continues to soften along with the economy, which is giving investors anxiety that the Fed may be easing too slowly.

Meanwhile, Hurricane Helene impacted a North Carolina town vital to the semiconductor industry. Spruce Pine is one of the only places in the world to mine high-purity quartz, an essential ingredient of semiconductor chips used in products across many sectors and industries. 🌪️

And the news getting the most attraction is Iran firing at least 180 missiles into Israel as the Middle East’s conflict grows further. The escalation pressured risk assets across the board and pushed oil prices higher.

Overall, it’s been a busy week of macro data, primarily related to the U.S. labor market. As such, we’ll likely see continued volatility as the market digests this new information and figures out how to position for an eventful Q4. 😬

After a several-month slump due to high production and economic worries weighing on demand projections, oil prices caught a bid after Iran launched missiles into Israel, further escalating the Middle East’s tensions.

Stocktwits users were quick to point to this as a catalyst for energy to finally find its footing, with @ivanhoff highlighting Exxon Mobile’s relative strength as it quickly approaches its all-time highs.

With many other energy stocks well off their highs, if this is truly the start of a broader move higher in the sector, many expect those stocks who have helped up the best to lead the charge…and $XOM is certainly among them. 📈

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The athletic footwear and apparel maker continues to miss the mark with its customers and investors. Although the company reported adjusted earnings per share of $0.70, topping expectations of $0.52, its revenue of $11.59 billion fell short of estimates. 🔻

Investors will have to wait just a little longer for its turnaround plan. The company says it’s withdrawing its full-year guidance and postponing its investor day to allow new CEO Elliott Hill to take his position on October 14th and get his footing before providing an update.

Management said it’s seeing indications of a slight second-half improvement in revenue trends compared to the first half. However, it still expects current-quarter revenue to be down between 8% and 10%, along with a 1.50% drop in gross margins. That’s worse than the 6.90% dip anticipated by analysts. 📉

With Nike Direct sales down 13% YoY and Nike Digital down 15% YoY, the company is working to improve its product's “innovation” and repair its relationships with wholesalers…backtracking on its direct-to-consumer (DTC) strategy.

Additionally, economic weakness in China continues to weigh on sales, but many hope the country’s recent economic stimulus can help sales rebound in the key market. However, in the near term, management still sees a “softer outlook.” 🌏

Overall, it seems like Nike is getting all the bad news out of the weigh and paving the way for its new CEO to come in and make some meaningful progress. Despite prices falling 6% after the bell, Stocktwits sentiment remained in ‘bullish’ territory after the bell, signaling that at least some retail investors are betting on a comeback. 🗸

First, Abu Dhabi’s ADNOC is seeking to buy German chemicals firm Covestra in a $16.30 billion deal, which would represent one of the largest foreign takeovers by a Gulf state. 😮

The countries in that region continue to diversify their wealth away from oil, though it comes at an interesting time for Germany as Commerzbank and the government look to stave off persistent interest from Italy’s UniCredit.

Back in the U.S., Boeing is looking to raise $10 billion via a a new equity offering as it looks for the cash it needs to successfully navigate its current challenges. While it may be a near-term headwind for shares, Stocktwits sentiment hit ‘extremely bullish’ levels again as retail sees it as a long-term positive. ✈️

Another struggling company, CVS Health, signaled to investors that it’s laying off about 2,900 employees as part of cost-cutting efforts. It’s also been reported management is exploring strategic options that could include a break-up of the company to separate its retail and insurance units. 💊

Lastly, another AI chipmaker is looking to enter the public market and take on Nvidia. Startup Cerebras Systems filed its prospectus for an initial public offering (IPO) on the Nasdaq, aiming to trade under the ticker symbol $CBRS. 🤖

That said, the offering will test investors’ appetite for smaller players in the AI space. The company reported just $136.40 million in sales during the first half of 2024, generating a net loss of $66.60 million. Additionally, it brings some concentration risk, as one customer accounted for 83% of its revenue last year.

Stocktoberfest is back with an intimate event for executives, influencers, and the most active investors in financial markets on October 20-22. 🤝

Network with industry thought leaders like Howard Lindzon, Michael Batnick, Brian Shannon, Michael Parekh, and many more during the 2-day palooza.

Less than 20 tickets remain, so grab your seat now, and we'll see you in beautiful Coronado, CA! 😎

Economic data: ADP Employment Change (8:15 am ET), Fed Hammack Speech (9:00 am ET), Fed Musalem Speech (10:05 am ET), EIA Energy Inventories (10:30 am ET), Fed Bowman Speech (11:00 am ET), Fed Barkin Speech (12:15 pm ET). 📊

Pre-Market Earnings: Conagra Brands ($CAG), Moolec Science ($MLEC), and RPM International ($RPM). 🛏️

After-Hour Earnings: Levi Strauss ($LEVI) and Novagold Resource ($NG). 🎧

P.S. You can listen to all of these earnings calls and more straight from the Stocktwits app or website. You’ll find them on the calendar page and individual symbol pages once they’re set to begin! We’ll see you there. 👍

🧭 Concerned about election season volatility? Let IBD Digital be your guide—get 2 months for $12*

📻 Sonos outlines turnaround plan following app disaster

🎮 Epic is trying to sweeten the deal to use Unreal Engine and the Epic Games Store

🌮 National Taco Day deals 2024: $1 tacos at Taco Bell, freebies at Taco John's, more

🚫 CNN launches a digital paywall, charging some users to read articles for the first time

🏢 Microsoft exec tells staff there won’t be an Amazon-style return-to-office mandate unless productivity drops

🤩 Chart Art: The best trade ideas and analysis from the Stocktwits community

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