U.S. 10Y touches 5%, AI stocks tumble and oil stays above US$105 markets brace for tomorrow’s Fed decision Global markets enter Tuesday with three pressure points converging: U.S. borrowing costs briefly crossed 5%, oil remains above US$100, and the AI trade suffered a sharp reset overnight . The S&P 500, Dow and Nasdaq all closed lower Monday, while the Philadelphia semiconductor index plunged 5.9% . For Malaysian investors, there was one encouraging counterpoint: the FBM KLCI rebounded 0.66% to 1,698.01 , snapping four consecutive losing sessions despite the difficult global backdrop. 30-second market snapshot Market / Asset Latest 🇺🇸 S&P 500 7,619.98, -0.48% 🇺🇸 Dow Jones 52,421.20, -0.29% 🇺🇸 Nasdaq 26,186.41, -0.56% 🇲🇾 FBM KLCI 1,698.01, +0.66% 💵 USD/MYR ~4.04–4.05 🇺🇸 U.S. 10Y Treasury briefly >5%; ~4.98% later 🥇 Spot gold ~US$4,313/oz, -0.8% 🛢️ Brent US$105.68/bbl, +~1% ₿ Bitcoin ~US$79,150, +~2% Monday The dollar strengthened Mo...
Key Takeaway: PDD Holdings (NASDAQ) will release its Q3 2024 earnings on November 21, 2024, before markets open. Analysts forecast strong revenue and earnings growth, driven by its e-commerce business and the success of the Temu platform.
Consensus Estimates:
- Revenue: Projected at 103.70 billion CNY, up 50.64% year-over-year (YoY).
- Earnings Per Share (EPS): Estimated at 19.77 CNY, a rise of 86.47% YoY.
Key Drivers of Growth:
E-Commerce Momentum:
- PDD’s innovative group-buying model and integration with social media have gained traction.
- Online marketing services revenue: Expected to grow 23.78% YoY to 49.12 billion CNY.
- Transaction services revenue: Forecasted to rise 81.84% YoY to 53.01 billion CNY.
Temu Platform Strength:
- Temu sales: Estimated at $54 billion for 2024, up from $15.33 billion in 2023.
- Global Expansion: Temu’s rapid growth diversifies PDD’s revenue streams, reducing reliance on the Chinese market.
Investor Confidence:
- David Tepper’s Appaloosa Management increased its PDD holdings by 3.36 million shares in Q3.
- Freemont Capital raised its stake by 23.8%, and Vanguard Group expanded its position to 24.26 million shares.
Options Market Insights:
- Volatility Trends:
- PDD’s earnings reactions have been more volatile than market predictions, with actual moves averaging 14.4% versus the expected ±11.7% over the last 13 quarters.
- Bullish Sentiment: A lower 25-Delta Put-Call Spread suggests stronger demand for upside calls than downside puts.
Challenges and Stock Performance:
- PDD’s stock has declined 22% year-to-date, lagging behind broader indices.
- Despite this, analysts are optimistic about its long-term growth potential, supported by its expanding e-commerce ecosystem and Temu's international success.
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