GOOD MORNING

Equity markets rebounded on Thursday, erasing some but not all of Wednesday’s losses. The move in the S&P 500 was largely driven by tech, led by a 20% gain in Tesla. Tesla reported a mixed quarter with a wider-than-expected margin; the news sending shares higher was the outlook for robust production and delivery growth in 2025. CEO Elon Musk estimates the growth at something like 20% to 30%, driven by a yet-to-be-seen lower-priced model.

The risk for the market next week is enormous, including earnings and economic data. The earnings deluge will continue with over 100 reports from S&P 500 Companies, including key reads from big tech names like Microsoft and Amazon. On the economic front, reports on third-quarter GDP, the PCE price index, and labor markets will drive the action. The risk is that weaker-than-expected data will raise the fear of a recession. Hot data is good news any way you look at it. The Fed may back off on the pace of interest rate cuts because of hot data, but economic and earnings growth will offset it and continue to drive stocks higher.

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