A shock hitting a major chip stock and lackluster AMD earnings weighed on the market, while a hotter-than-expected jobs print did not help matters. “Mag 7” results have been somewhat muted so far, but all eyes are on Apple and Amazon tomorrow as the bulls seek renewed momentum in the major indexes. 👀

Today's issue covers  Super Micro’s auditor scare, the U.S. economy humming along, and a recap of the day’s biggest earnings movers. 📰

Here’s the S&P 500 heatmap. 5 of 11 sectors closed green, with communication services (+0.61%) leading and technology (-1.59%) lagging.

And here are the closing prices: 

Most bullish/bearish symbols on Stocktwits at the close: 📈 $CMAX, $TTI, $UIS, $TWLO, $CLH 📉 $CVNA, $QRVO, $SMCI, $MGA, $DJT*

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

Following AMD's lackluster results, semiconductors were already on shaky footing when Super Micro Computer ($SMCI) added to the weakness with a major shock.

Just before today’s opening bell, it was revealed that Ernst & Young resigned as Super Micro’s auditor, citing significant concerns over the company’s internal controls, board independence, and accounting practices. The resignation letter said EY is “unwilling to be associated” with management’s financial statements. 🤯

This added to worries sparked by Hindenburg Research’s short seller report, a delayed 2024 financial statement filing, and a reportedly ongoing federal investigation. 😟

As for a response, the company’s SEC filing says it disagrees with EY and has hired law firm Cooley and a forensic accounting firm to review its internal controls, though that review is ongoing.

With no clear answers, bears used the opportunity to push the stock down another 33% on the day. Down nearly 75% from its March all-time highs, Stocktwits sentiment is in ‘extremely bearish’ territory as investors and traders avoid the dip. 🙅

As the company is Nvidia’s third-largest customer, weakness inevitably led to a selloff across the sector. With the broader market’s momentum waning and these stocks trading near technical levels, all eyes are anxiously watching them. 😬

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Meta: Shares slipped 3% after the company reported better-than-expected results but forecast rising infrastructure expenses next year. Although the digital advertising backdrop remains healthy, the significant capital expenditure growth in 2025 has investors concerned in the near term. 💵

Microsoft: Shares slid 4% despite beating earnings and revenue from Azure and other cloud services rising 33%. The company’s guidance for revenue growth this quarter implies 10.6% growth, just below analyst estimates. Like Meta, the company’s AI investments remain a key focus for investors who are closely watching capital expenditure spending. ⛅

Robinhood: Shares fell 11% after its earnings and revenues missed expectations. Revenue jumped 41% YoY, its second-highest quarter ever. Net interest revenue rose less than anticipated, but transaction-based revenue rose 72% YoY to $319 million as it continued to invest in higher-fee products like betting markets. 💸

Coinbase: Shares dipped 5% after muted crypto trading caused revenues and earnings to miss analyst estimates. Within its core business, retail trading revenue grew 98% YoY, while institutional revenue jumped 292% to $55.30 million. Total transaction revenue was up a staggering 98% YoY. ₿

Riot Platforms: Shares fell 7% after the crypto miner reported a wider-than-expected third-quarter loss after revenue fell short of estimates. While it produced virtually the same amount of bitcoin YoY, it had to spend more to mine them. The average cost to mine BTC (excluding depreciation) was $35,376, compared to $22,741 last year, as it received fewer power credits. ⛏

MicroStrategy: The tech company turned Bitcoin betting vehicle reported results today, but the star news was that it plans to raise $42 billion to buy more Bitcoin over the next three years. Whether its capital structure can support that level of funding remains to be seen, but bulls continue to applaud Saylor’s conviction. 💰

Etsy: Shares jumped 7% after its revenue beat expectations by rising 4.1% YoY, driven by strength in advertising sales as merchants paid for better site placement. The company also said its gifting feature launched earlier this year showed promising momentum as it continues to improve the overall user experience vs. competitors. 🛒

Carvana: Shares soared 22% after the online used-car retailer easily topped earnings and revenue expectations. Management also raised its 2024 EBITDA guidance, saying it will be “significantly above the high end” of its previous $1 to $1.2 billion target. It expects a QoQ increase in retail vehicle sales during the fourth quarter. 🚘

Root: Shares skyrocketed 70% after the auto insurance technology company turned a surprise profit for the first time. Revenue nearly doubled from the prior year to $305.7 million, with its “gross combined ratio” improved to 89%. Policies in force rose 57% YoY, and gross premiums written rose 48%. 📝

EBay: Shares sunk 7% after the online marketplace’s fourth-quarter guidance fell short of Wall Street estimates. Despite the company’s “solid execution,” it faces increased competition from e-commerce competitors, causing the dollar value of items sold on eBay’s marketplace to rise just 2% YoY. 📦

WingStop: Shares slipped 21% after earnings missed expectations, with revenue marginally beating. Same-restaurant sales rose 20.9% in the U.S., topping expectations and driven by transaction growth. Still, investors feel the growth stock’s momentum may be waning. 🐔

Eli Lilly: Shares lost 7% after the drugmaker slashed its full-year adjusted profit guidance, citing weak sales of its blockbuster weight loss drug Zepbound and diabetes treatment Mounjaro. Skyrocketing demand has caused Novo Nordisk and other rivals to invest billions in manufacturing capacity, increasing competition. 💊

Garmin: Shares ran 23% to new all-time highs after the company beat expectations and raised its full-year guidance, citing unabated demand. Management expects a slew of wearable product launches ahead of the holiday season to drive demand. ⌚

Dropbox: Shares popped 2% after the company cut 20% of its global workforce, adding to the 16% cut it made in April 2023. Cuts will impact parts of the business where the company is “over-invested or underperforming” while working toward a “flatter, more efficient team structure.” ✂

America’s economy is slowing, just not at the pace many had expected from the historically fast rate hiking cycle we witnessed from March 2022 through July 2023. About a year later, the Fed began its cutting cycle, attempting to keep growth going without stoking an inflation comeback. And so far, things have held up well.

Today’s advanced read on third-quarter GDP showed the country grew at a 2.8% annualized rate, below the 3.1% estimate and second-quarter read of 3%.

Consumer spending drove the strength, with personal consumption expenditures rising 3.7% in their strongest performance since Q1 2023. Federal government spending rose 9.7%, driven by a 14.9% jump in defense outlays. The two factors contributed 2.5% and 0.6% to GDP, respectively. 💵

Meanwhile, the all-important labor market data continues to roll in ahead of next week’s Fed decision. Yesterday's JOLTs report showed the number of job openings slipped to 7.4 million in September, the first reading below its pre-pandemic highs. Layoffs and discharges rose by 238,000, and quits fell by 525,000 YoY, showing a continued softening in the labor markets. 🧑‍💼

Today, the ADP employment report signaled 233,000 jobs were created in October, blowing away the 113,000 expected by analysts and exceeding September’s upwardly revised 159,000. It was the best month for job creation since July 2023, giving a slightly conflicting signal and raising the importance of Friday’s nonfarm payrolls data. 📈

Despite the inflow of stronger-than-expected data, the market still expects the Federal Reserve to cut rates by 25 bps at its meeting next week and 25 bps in December. We’ll see if the rest of this week’s data supports this view, though another cut seems like a lock next week.

Lastly, the Euro zone surprised investors with GDP growing double the 0.2% expected and hitting its fastest rate in two-year highs. Spain and Ireland drove growth, while Germany (the largest economy) avoided a recession. 👍

Economic data: Core PCE Price Index & Personal Income/Spending (8:30 am ET), Initial/Continuing Jobless Claims (8:30 am ET), Chicago PMI (9:45 am ET). 📊

Pre-Market Earnings: Norwegian Cruise Lines ($NCLH), Uber ($UBER), Peloton ($PTON), Shopify ($SHOP), Mastercard ($MA), Nikola ($NKLA), Altria ($MO), Anheuser-Busch InBev ($BUD), Sirius XM ($SIRI), MobilEye ($MBLY), Estee Lauder ($EL), and Intercontinental Exchange ($ICE). 🛏️

After-Hour Earnings: Apple ($AAPL), Amazon ($AMZN), Intel ($INTC), U.S. Steel ($X), Roblox ($RBLX), Energy Fuels ($UUUU), SM Energy ($SM), Nine Energy Service ($NINE), Atlassian ($TEAM). 🎧

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. 👍

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🎧 Trends With Friends: Big tech earnings and the future of crypto trading with VanEck portfolio manager Pranav Kanade

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