🚀 Iran Sends a Message... and Missiles

Good afternoon! Jimmy Carter just became the first living U.S. president to hit the big 100. The former peanut farmer from Georgia, who served in the Oval Office from 1977 to 1981, may have only spent one term as president, but his post-presidency work has solidified him as a global icon. From brokering peace in the Middle East with the Camp David Accords to winning the Nobel Peace Prize for his dedication to human rights, Carter’s legacy goes far beyond the White House.

To celebrate the milestone, a star-studded concert rocked Atlanta, featuring performances by the B-52s and tributes from notable figures like Barack Obama and George W. Bush. Though Carter wasn’t in attendance, his influence was center stage. After all, this is the man who helped turn Habitat for Humanity into a global force and earned the unlikely nickname “the rock ‘n’ roll president.” Not bad for a guy who started out farming peanuts.

MARKETS

• Investors hit the brakes on Tuesday after Iran fired missiles at Israel, with stocks retreating and investors flocking to safe-haven assets like U.S. Treasuries. Meanwhile, reports on manufacturing and jobs were solid, but nothing to write home about, leaving investors a bit underwhelmed.

• As tensions in the Middle East flared up, the usual suspects—oil, gold, and the U.S. dollar—got a boost. The Dow dropped 0.4%, and the Nasdaq led the retreat with a 1.5% slide.The S&P 500 dipped 0.9%, cooling off after a record high the day before, as geopolitics took the wheel.

STOCKS
Winners & Losers

What’s up 📈

• Energy stocks were the top performers in the S&P 500 today, driven by escalating concerns about potential conflict between Iran and Israel. APA Corp. ($APA) surged 4.91%, Halliburton ($HAL) climbed 3.10%, and Occidental Petroleum ($OXY) increased by 3.33%.

• Defense stocks also rallied for similar reasons. Lockheed Martin ($LMT) gained 3.66%, Northrop Grumman ($NOC) rose 3.04%, and L3Harris Technologies ($LHX) ticked up 3.03%.

• Alibaba ($BABA) surged 6.24% and Pinduoduo ($PDD) also jumped 8.03% , benefiting from improving investor sentiment toward Chinese tech stocks following fiscal and monetary policy initiatives aimed at boosting economic growth.

• Paychex ($PAYX) rose 4.92%, hitting a new 52-week high after reporting better-than-expected fiscal first-quarter results.

What’s down 📉

• Amentum Holdings ($AMTM) plummeted 20.16%, just a day after making its debut on the S&P 500.

• Humana ($HUM) declined 11.77% after announcing its 2025 Medicare Advantage and Medicare Prescription Drug Plan offerings.

• Signet Jewelers ($SIG) fell 7.91% after announcing that CEO Virginia C. Drosos will retire on November 4, 2024, after 12 years with the company. She will be succeeded by J.K. Symancyk, former CEO of PetSmart.

• Snowflake ($SNOW) slid 4.03% after Morgan Stanley expressed concerns about data interoperability and growing competition, noting that growth may slow without a near-term catalyst.

• HP Inc. ($HPQ) dropped 3.09% following a downgrade from Citi, which shifted its rating from buy to neutral, citing a weakening industry environment and limited near-term AI benefits.

• Ferrari N.V. ($RACE) fell 3.03% as the company continued its multi-year share buyback program, purchasing 46,419 common shares for €19.77 million.

• Robinhood ($HOOD) dropped 4.65%.

• Palo Alto Networks ($PANW) declined 3.66%.

• Nvidia ($NVDA) dipped 3.66%.

GEOPOLITICS
Iran Sends a Message... and Missiles

In a not-so-subtle move, Iran launched 200 ballistic missiles at Israel on Tuesday evening, sending shockwaves across both the Middle East and global markets. The attack comes hot on the heels of Israel’s targeted killings of high-ranking Hezbollah and Hamas leaders, including the dramatic airstrike that took out Hezbollah leader Hassan Nasrallah. Prime Minister Netanyahu, never one to shy away from a response, promised swift retaliation.

"Iran made a big mistake tonight, and it will pay for it," Netanyahu stated.

Markets Feel the Heat
This missile barrage didn't just light up the night sky – it sent oil prices soaring over 5% as investors braced for potential supply disruptions. Global stock markets, already jittery, took a hit, with major indices retreating as traders sought safety in bonds and gold. The Dow dropped over 250 points, while oil bulls celebrated the sudden spike in WTI crude prices.

The Middle East remains a powder keg, and this latest escalation between Iran and Israel has made energy traders reach for their helmets.

Defensive Maneuvers
Most of Iran's missiles were intercepted by Israel’s vaunted defense systems (with a little help from the U.S.), but a few managed to slip through. While the immediate damage was minimal, Netanyahu made it clear that Israel wouldn’t just let this slide. Meanwhile, U.S. President Joe Biden got involved, ordering American naval ships to fire interceptors in support of Israel.

But here’s the kicker: despite all the missile action, the market impact was limited... for now. Iran warned of further retaliation if Israel pushes back, and that looming threat could be enough to keep investors on edge.

The Aftershock
Iran's show of force might have been aimed at Israel, but it sent ripples through global financial markets. Oil surges, stock dips, and safe-haven assets like bonds and gold saw some love. Investors, already skittish from broader geopolitical risks, aren't exactly thrilled about the idea of an expanded Middle Eastern conflict.

If the tension continues to escalate, expect volatility to hang around like that last guest who just won't leave the party.

NEWS
Market Movements

• 🛑 Court Dismisses Shareholder Lawsuit Against Tesla: A court dismissed a shareholder lawsuit against Tesla ($TSLA) and CEO Elon Musk, which accused them of overstating Tesla’s self-driving safety and effectiveness.

• ⚖️ FTC Greenlights Chevron’s $53B Purchase of Hess: The Federal Trade Commission has approved Chevron's $53 billion acquisition of Hess, though it barred Hess CEO John B. Hess from sitting on Chevron's board due to his communication with OPEC.

• 🏡 Apple Developing Smart Home Display: Apple ($AAPL) is said to be developing a smart home display for release in 2025, featuring a new “homeOS” derived from Apple TV’s tvOS. The device may include wall-mounting magnets and offer enhanced smart home control.

• ⚖️ Amazon Wins Partial Dismissal in FTC Antitrust Lawsuit: Amazon ($AMZN) won partial dismissal of an FTC antitrust lawsuit, though a federal judge allowed other claims to proceed. Details were not immediately made public.

• 📶 Verizon Restores Service After Outage: Verizon ($VZ) has restored service following a significant outage that affected 100,000 customers yesterday.

• 🚖 Cruise Fined $1.5M After Accident: Cruise, GM’s ($GM) self-driving unit, will pay a $1.5M fine after one of its taxis injured a pedestrian. The company will face increased regulatory oversight as it resumes testing in several U.S. cities.

• 💉 Pfizer Reduces Stake in Haleon: Pfizer ($PFE) sold a $3.26B stake in healthcare products company Haleon ($HLN), reducing its ownership to 15%.

• 🚗 Li Auto, Zeekr, and Xpeng Report Record Deliveries: Li Auto ($LI), Zeekr, and Xpeng ($XPEV) reported record September deliveries, putting Li Auto and Xpeng on track to exceed forecasts.

• 🎬 Sony Pictures Announces CEO Succession: Sony Pictures announced that Ravi Ahuja, current president and COO, will succeed Tony Vinciquerra as CEO in early 2025. Vinciquerra will remain as non-executive chairman until the end of 2025.

• 💼 Charles Schwab Appoints New CEO: Charles Schwab ($SCHW) has appointed Rick Wurster as its next CEO, effective Jan. 1. Wurster, currently president, succeeds Walt Bettinger, who will retire but remain as co-chairman.

SUPPLY CHAIN
Dockworkers Launch Strike at Ports From Maine to Texas

Dockworkers from Maine to Texas have shut down some of the country’s busiest ports in a move that could strangle trade just as the holiday season gears up. The strike, led by the International Longshoremen’s Association (ILA), is driven by demands for a massive wage increase and resistance to port automation. Thousands of workers walked off the job early Tuesday, halting the flow of goods at critical trade hubs.

This is no ordinary labor dispute—it's a power play. Now he has laid down the gauntlet to Joe Biden, threatening to “cripple” the US economy with strike action. And with the holiday season just around the corner, they have the leverage to do it.

Retailers Brace for Impact
Big retailers, including Walmart, Costco, and IKEA, say they’ve prepared for the strike by stocking up early and rerouting shipments to West Coast ports. But even they admit that a prolonged strike will drive up costs and could lead to shortages of key products. Shipping costs are already on the rise, and it’s only a matter of time before consumers feel the pinch.

For now, holiday shoppers can breathe easy. But the longer this drags on, the harder it will be to keep shelves stocked.

Industries Feeling the Heat
The auto industry, which relies heavily on East Coast ports for vehicle imports, is especially vulnerable. European carmakers like BMW and Volkswagen are expected to take the biggest hit. But not everyone is suffering—air freight companies like FedEx and UPS are positioned to cash in as businesses scramble for alternative shipping methods.

Some companies are prepared for the long haul, but even the best-prepared businesses won’t escape unscathed if the strike stretches beyond a week. JP Morgan analysts estimate the U.S. economy could lose up to $4.5 billion per day from the disruption.

Crippling the Economy?
Harold Daggett isn’t playing around. He’s leading a movement that could bring the U.S. economy to its knees, just as it did during the last major dockworker strike in 1977. With billions at stake and mounting political pressure, it’s a waiting game to see how long businesses—and consumers—can hold out.

This strike might be making history, but it’s also setting the stage for a holiday season none of us will forget.

EARNINGS
Nike’s Guidance? Just Do… It Later

Nike is playing it cautious, hitting the snooze button on its full-year guidance and pushing off its investor day, originally set for November. Why? A new CEO, Elliott Hill, is about to step in, and the company’s latest earnings showed a 10% drop in sales, so there’s some serious catching up to do.

Sure, Nike beat earnings expectations by $0.18 per share, but revenue? Missed the mark. The company reported $11.59 billion, slightly under the $11.65 billion analysts were hoping for. Investors weren't thrilled—shares slipped 5.32% in after-hours trading.

New Boss, New Playbook?
With Hill taking the reins soon, Nike’s buying some time. Postponing the investor day gives him space to craft a fresh strategy—much needed, considering Nike expects revenue to slide another 8-10% next quarter. Ouch.

Investors are holding their breath, and they’re not exactly feeling the love. Nike’s stock is down 18% this year, far behind the S&P 500’s 20% gain. Hill’s going to need more than a pep talk to turn this ship around.

A Few Silver Linings
Not everything is gloomy in swoosh land. Nike’s gross margin came in higher than expected, hitting 45.4%, thanks to smart price adjustments and lower logistics costs. Plus, sales in Greater China outperformed, with that region showing some resilience.

But it wasn’t enough to make up for weakness in North America and Europe, where sales tumbled. Even Converse couldn’t lace up a win—continuing to weigh on overall performance.

Gross margin up, but sales still slipping.

What’s Next for Nike?
As Hill steps in, he’ll need to put the innovation pedal to the metal. Nike’s been leaning too hard on legacy lines like Air Jordans, Dunks, and Air Force 1s—shoes that used to sell out in seconds but now struggle to hold the same hype. Meanwhile, competitors like On and Hoka are running laps around them.

The bottom line? Investors are counting on Hill to reignite Nike’s product pipeline and rebuild retailer relationships. Whether he can pull off that comeback is the $11.59 billion question.

Calendar
On The Horizon

Tomorrow

Tomorrow, it's time for another pulse check on the labor market with the ADP National Employment Report, giving us a look at private sector job growth across the U.S.

The recent numbers haven’t exactly been brag-worthy. August saw just 99,000 new jobs, marking the fifth straight month of slowing growth. Yes, jobs are still being added, but the slowdown has economists sweating. For September, the magic number is 128,000. Anything less, and you can bet the Fed will be paying extra attention.

Before Market Open:

• Tilray Brands ($TLRY) has struggled this year as marijuana legalization slows down across the US and new avenues of growth fail to materialize. In the past, the marijuana grower has utilized its cash reserves to acquire competitors in order to foster growth—but that strategy is running out of steam, just like the company is running out of money. A recent pivot into craft beer seems more desperate than inspired, and won’t do much to bolster this struggling stock’s bottom line anytime soon. Consensus: -$0.04 EPS, $218.24 million in revenue.

NEWS
The Daily Rundown

• 🔥 UK Goes Coal-Free: The UK has officially closed its last remaining coal plant, marking the first time a G7 country has fully transitioned away from coal as a power source. After 142 years of coal use, the UK has shifted to renewable energy sources, which now provide 50% of its power.

• 🗻 Swiss and Italian Borders Shift Due to Melting Glaciers: Switzerland

  and Italy have agreed to adjust their borders near the Matterhorn after glacier melting forced changes. Swiss glaciers lost 4% of their volume in 2023 alone, the second-biggest melt on record, affecting areas used for skiing and other tourism.

• 🌪️ Hurricane Helene Devastates with Hundreds Still Missing: Rescue efforts continue after Hurricane Helene, which caused widespread flooding and power outages. At least 130 people have been confirmed dead, with hundreds still missing.

• 📱 Epic Games Sues Google and Samsung (Again): Epic Games has filed another antitrust lawsuit against Google and Samsung, accusing them of making it difficult for users to access third-party app stores on their phones. This follows Epic's previous legal battles over app store monopolies.

• 💔 Pete Rose and Dikembe Mutombo Pass Away: Baseball legend Pete Rose, known for his record-breaking hits and lifetime ban from the MLB, has died at 83. NBA great Dikembe Mutombo, renowned for his humanitarian work, passed away at 58 from brain cancer.

• 🎶 YouTube Reaches Deal to Restore Music Videos: YouTube has settled a contract dispute with performance rights group SESAC, allowing popular music videos by artists like Adele and Green Day to return to the platform.

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