Investment Week at a Glance

Stocks finished lower for the week. The Dow Jones Industrial Average fell 1.2%, the S&P 500 was down 1.6%, and the NASDAQ fell 3.0%. Foreign stocks (MSCI EAFE) were also down for the week, falling 0.5%. Bond prices were flat for the week, with the 10-year U.S. Treasury ending the week at 4.09%.  (Data source: Wall Street Journal)

Earnings Continue to Beat Expectations

Over 85% of the S&P 500 have now reported Q3 earnings, and so far, 82% have beaten expectations, which is above the long-term average. The index is on pace for 12% earnings growth as well, which will make it 4 straight quarters of double-digit growth. Tech continues to lead the way with 22% earnings growth for the sector. Investors will continue to pay close attention to tech and AI, as it has driven the market higher in the past few years.

Government Reopening in Sight

Late on Sunday night, the Senate was able to pass a funding bill to send to the House to reopen the government. While not final yet, it does seem that we are on the right track to reopening the government. This would be a positive for the economy, as we were starting to see some impacts in certain areas that were worrisome. Once we officially see the government reopen, it will be a worry that the market can put to the side for the time being.

Palantir Falls Despite Earnings Beat

Palantir stock fell by 13% last week despite beating revenue and earnings forecasts. The company has been one of the winners in the AI boom as the stock is up over 1,000% the past 5 years and up over 100% this year despite the recent pullback. The company has benefited from government contracts, which have grown by 52% since last year. They also recently agreed to a deal with the U.S. Army that could be worth up to $10 billion. Investors are hopeful the success can continue for Palantir. (CNBC)

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Quiz

What % do the top 10 companies in the S&P 500 make-up of the index? (Scroll Down for Answer)

1.    19%
2.    27%
3.    33%
4.    40%

Answer:

4.  40%. The top 10 companies in the S&P 500 now make up 40% of the index. This is a new record and shows the concentration of the index. While this is not good or bad, it does show how the index can be driven by only a handful of the 500 companies it tracks.

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