A Jam-Packed Calendar Meets a Short but Mighty Bullish Window

👋Hello and Welcome to Monday! 🌅 

Here’s what’s on deck this week:

• The “Halloween Strategy” is set to begin from a lofty October level.

• The Fed’s rate call and Powell’s comments could set the market’s next move.

• Big Tech’s earnings blitz—Apple, Microsoft, Meta, Amazon, Alphabet—puts AI chatter back in focus.

• Investors juggle rate cuts, shutdown fallout, and a packed week of corporate scorecards.

Let’s get going.▶️▶️

💵What’s the market pricing in for the week ahead?

The Fed’s two-day meeting wraps Wednesday, and Wall Street’s betting on a quarter-point rate cut—the second this year—to bring borrowing costs down to 3.75%–4%. The move comes as labor market concerns are growing and inflation stays annoyingly above target, leaving the central bank to thread the needle between stimulating growth and reigniting price pressures.

But the Fed’s data dashboard is looking a little… blank. With the government shutdown entering month two, key reports on jobs, inflation, and trade are stuck in limbo, leaving policymakers flying partially blind. For now, private data on consumer confidence, housing, and spending will have to fill the gaps.

Five of the Magnificent Seven report this week, and all eyes are on their AI playbooks. Expect plenty of talk on spending, innovation, and how much longer investors are willing to pay up for the future of machine learning.

Click here 👈to learn more about our charts.

Big Tech Takes Center Stage in a Jam-Packed Earnings Week

It’s a heavyweight week for corporate earnings, and Wednesday’s lineup could steal the show. Microsoft kicks things off fresh off a massive $40 billion AI data center deal with Nvidia, while Alphabet’s update follows reports it’s cozying up to AI startup Anthropic. Meta rounds out the day, with investors eyeing details on its new AI-powered smart glasses.

Apple and Amazon Close Out the Week’s Main Events

Thursday belongs to Apple and Amazon. Apple just notched a record high after strong iPhone 17 sales—now all eyes are on whether the momentum holds. Amazon’s call later that day could shed light on recent AWS outages that rattled businesses across the web.

Beyond Big Tech, the Industrial Heavyweights Step Up

Exxon Mobil, Visa, UnitedHealth, Caterpillar, Boeing, Eli Lilly, and Anheuser-Busch are also on deck—offering a pulse check on energy, health care, manufacturing, and consumer spending.

🤔 Which companies are poised to possibly over- or underreact to earnings this week?

Shares of this week’s biggest reporting company (Microsoft) have a history of moving a bit more than the market expects during the trading session immediately following earnings.

Of the top 20 companies reporting earnings this week, UnitedHealth shows the strongest likelihood that it will move more than the market is expecting post earnings (keep reading below the next table for more details on how this is calculated).

Conversely, Exxon Mobil has shown a tendency to remain within its post-earnings expected range (keep reading below the next table for more details).

👇 Below is a look at this week’s biggest earnings reports, sorted by market cap.

For active traders looking for actionable insights, the highlighted columns on the table above show the implied (expected) post-earnings move for each company, along with the Average 1-Day Realized Volatility Post Earnings Ratio (1D RV).

📈Implied Move: The market’s best guess at how much a stock will swing after earnings.

📊1D RV: A powerful tool that represents the post-earnings price move divided by the expected price move over the past 12 quarters. In other words, it measures how good (or bad) the market is at pricing each company’s earnings.

💵When you see a ratio >1.0, it indicates that, historically, the earnings are mispriced and the stock moves MORE than the market anticipates, favoring straddle buyers.

🪝A ratio <1.0 tells the opposite story, meaning the stock historically moves LESS than the market anticipates, which favors straddle sellers.

Happy hunting.

Often remembered for the fact that it has hosted some of the largest market crashes in history, many traders tend to forget that October actually marks the start of a seasonally bullish period that extends through January.

While October is not ranked among some of the strongest months of the year, there is a small, but very bullish trading window that begins on Tuesday.

Ahead of this favorable stretch, Friday’s rally pushed the S&P 500 more than 11% above its all-important 200-day moving average. Of the 1,517 October trading days since 1957, just 137 (9%) of them have traded at such lofty levels.  

Jeff Hirsch at Almanac Trader has covered the “Halloween Strategy” and just about every other market cycle at length.

Jeff notes that “The last 4 trading days of October and the first 3 trading days of November have a stellar record over the last 31 years.” 

Jeff’s original analysis shown here uncovers that the S&P 500 has closed higher 80.6% of the time during this stretch of 7 trading days since 1994.

For today’s email, however, we wanted to take a slightly deeper look to break down the performance during this period:

For the performance figures below, each day's performance is measured from the close prior to the start of the 7-day trading window. For example, the performance of this year’s 7-day Halloween Strategy trading window will be measured from today’s close.

If you’re looking for the sectors where volatility is expected to be the highest this week, making for higher options premiums, look no further than technology (XLK), energy (XLE), and consumer cyclicals (XLY).

For anyone looking for less price movement and lower-priced options, industrials (XLI), staples (XLP), and healthcare (XLV) are showing the lowest implied volatility for the week ahead.

Monday

• Delayed Data: Durable-goods orders (September)

• Key Earnings: Welltower, Cadence Design Systems, Waste Management, Hartford Insurance Group

Tuesday

• Consumer confidence (October)

• More Data to Watch: S&P Case-Shiller home price index (August)

• Key Earnings: Visa, UnitedHealth, Novartis, Booking Holdings, Royal Caribbean

Wednesday

• FOMC interest-rate decision

• Fed Chair Jerome Powell press conference

• More Data to Watch: Pending home sales (September)

• Delayed Data: Advanced U.S. trade balance in goods (September), Advanced retail inventories (September), Advanced wholesale inventories (September)

• Key Earnings: Microsoft, Google, Meta, Caterpillar, ServiceNow, Verizon, Boeing, CVS, Starbucks, Carvana

Thursday

• Delayed Data: Initial jobless claims (Week ending Oct. 25), Gross domestic product (Q3)

• Key Earnings: Apple, Amazon, Eli Lilly, Mastercard, Merck, Shell, Gilead Sciences, Anheuser-Busch, Comcast

Friday

• Chicago Business Barometer (PMI) (October)

• Delayed Data: PCE index (September), Employment cost index (Q3)

• Key Earnings: Exxon Mobil, AbbVie, Chevron, Colgate-Palmolive

With the CBOE Volatility Index (VIX) now firmly back below 20, it becomes increasingly likely that the majority of this week’s closing price changes will not overshoot the daily averages of the past 12 months by a wide margin.