| | | Stock Market Update
briefing.com
Last Updated: 17-Oct-23 16:30 ET | Archive
Get frequent stock market updates that focus on broad U.S. and international markets approximately every half-hour starting at 6 a.m. ET with foreign market and U.S. futures summaries and market briefs. Get up to speed on premarket activity such as stock specific news headlines, ratings changes, earnings, economic events, and futures as well as overnight developments from Asian and European equity and foreign exchange market activity. After the open, not only will our market briefing keep you updated on market action, data, and events, but we’ll also keep you abreast of sector and industry performance as well as market sentiment and flow. Shortly after the close, our final stock market update provides a concise review of the day’s market action and events and highlights key items that may have an impact on the stock market on the following trading day.
Market Snapshot
| Dow | 33878.93 | -105.57 | (-0.31%) | | Nasdaq | 13490.26 | -77.72 | (-0.57%) | | SP 500 | 4357.82 | -15.81 | (-0.36%) | | 10-yr Note | -32/32 | 4.86 |
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| | NYSE | Adv 1665 | Dec 1179 | Vol 978 mln | | Nasdaq | Adv 2417 | Dec 1816 | Vol 4.4 bln |
Industry Watch
| Strong: Energy, Materials, Industrials, Real Estate, Consumer Staples |
| | Weak: Information Technology, Real Estate, Utilities, Health Care |
Moving the Market
-- Monitoring the price action in Treasuries; 10-yr note yield hitting 4.86% creating a headwind for stocks
-- Weak mega caps weigh on index performance, but market breadth is positive
-- Relative strength from value stocks and small caps
-- Lingering geopolitical uncertainty around the Israel-Hamas conflict
-- Digesting some earnings news that has garnered mixed reactions
| Closing Summary
17-Oct-23 16:30 ET
Dow +13.11 at 33997.61, Nasdaq -34.24 at 13533.74, S&P -0.43 at 4373.20
[BRIEFING.COM] The stock market saw somewhat mixed action today, but the Dow, Nasdaq, and S&P 500 all managed to recover from larger losses seen earlier in the day. Like recent sessions, uncertainty related to the Israel-Hamas war and worries about the House attempting to elect a new Speaker were overshadowed today by other factors, namely economic data and earnings news.
The S&P 500 finished flat and the Nasdaq Composite declined 0.3%, weighed down by underperforming growth and mega cap stocks. The Russell 2000 climbed 1.1% and the S&P Mid Cap 400 rose 1.2%.
Market breadth was positive with advancers leading decliners by a 4-to-3 margin at the NYSE and at 5-to-3 margin at the Nasdaq.
The relative strength in smaller cap stocks and the relative weakness in larger cap stocks was a reaction to this morning's stronger-than-expected September Retail Sales Report. Total retail sales were up 0.7% month-over-month following an upwardly revised 0.8% increase (from 0.6%) in August, and retail sales, excluding autos, were up 0.6% month-over-month following an upwardly revised 0.9% increase (from 0.6%) in August.
That report fueled increased selling in Treasuries, but also bolstered small cap and mid cap stocks, many of which have a primarily domestic orientation, due to the positive economic implications of the report. The 2-yr note yield climbed 11 basis points to 5.20%. The 10-yr note yield hit 4.86% at its high, but settled at 4.85%, which is 14 basis points higher than yesterday.
Stocks were able to rally off session lows as the 10-yr note yield pulled back from its intraday high just before 10:00 a.m. ET, but things rolled over as the 10-yr yield climbed again in afternoon trading. The S&P 500 hit 4,393 at its best level, but its rebound effort stalled there, which was just below the 50-day moving average (4,399).
The Vanguard Mega Cap Growth ETF (MGK) declined 0.3% while the Invesco S&P 500 Equal Weight ETF (RSP) logged a 0.5% gain. NVIDIA (NVDA 439.38, -21.57, -4.7%) was an influential laggard after news that the Biden administration will put more restrictions on China's ability to purchase advanced semiconductors, according to The Wall Street Journal. NVDA indicated that it is not expecting any meaningful impact from the new China rules.
Most of the S&P 500 sectors registered a gain led by materials (+1.0%) and energy (+1.0%). The information technology sector (-0.8%) saw the biggest decline.
Additionally, Bank of America (BAC 27.62, +0.63, +2.3%), Goldman Sachs (GS 309.36, -5.03, -1.6%), Lockheed Martin (LMT 441.13, +0.72, +0.2%), and Johnson & Johnson (JNJ 156.09, -1.44, -0.9%) all reported better than expected earnings, but closed with mixed results.
- Nasdaq Composite: +29.3% YTD
- S&P 500: +13.9% YTD
- Dow Jones Industrial Average: +2.6% YTD
- S&P Midcap 400: +3.3% YTD
- Russell 2000: +0.3% YTD
Reviewing today's economic data:
- Total retail sales increased 0.7% month-over-month in September (Briefing.com consensus 0.3%) following an upwardly revised 0.8% increase (from 0.6%) in August. Excluding autos, retail sales jumped 0.6% month-over-month (Briefing.com consensus 0.2%) following an upwardly revised 09% increase (from 0.6%) in August. The strength wasn't just because of higher gasoline prices either. Excluding gasoline stations, retail sales were up 0.7%.
- The key takeaway from the report is that it doesn't reflect a consumer who is shying away from spending. That understanding should translate favorably into Q3 GDP forecasts, and less favorably in forecasts pertaining to the Fed's policy view.
- Total industrial production increased 0.3% month-over-month in September (Briefing.com consensus 0.0%) following a downwardly revised unchanged (from 0.4%) in August. The capacity utilization rate jumped to 79.7% (Briefing.com consensus 79.5%) from a downwardly revised 79.5% (from 79.7%) in August. Total industrial production was up 0.1% yr/yr. The capacity utilization rate of 79.7% was in-line with its long-run average.
- The key takeaway from the report is that manufacturing output continues to be soft. Notwithstanding the monthly gain in September, manufacturing output was down 0.8% year-over-year and is apt to remain under added pressure as the UAW strike at the Big Three automakers drags on.
- The NAHB Housing Market Index dropped to 40.0 in October (Briefing.com consensus 45.0) following a revised 44 in September (from 45).
- Business inventories increased by 0.4% in August (Briefing.com consensus 0.3%) following a revised 0.1% increase in July (from 0.0%).
Wednesday's economic calendar features:
- 7:00 ET: Weekly MBA Mortgage Index (prior 0.6%)
- 8:30 ET: September Housing Starts (Briefing.com consensus 1.380 mln; prior 1.283 mln) and Building Permits (Briefing.com consensus 1.448 mln; prior 1.543 mln)
- 10:30 ET: Weekly crude oil inventories (prior 10.18 mln)
- 14:00 ET: October Fed Beige Book
Treasuries settle with sharp losses
17-Oct-23 15:35 ET
Dow -22.05 at 33962.45, Nasdaq -55.26 at 13512.72, S&P -6.94 at 4366.69
[BRIEFING.COM] The three major indices are trying to climb off recent lows.
The 2-yr note yield climbed 11 basis points to 5.20% and the 10-yr note yield settled at 4.85%, which is 14 basis points higher than yesterday.
Ahead of tomorrow's open, Elevance Health (ELV), Procter & Gamble (PG), Morgan Stanley (MS), Travelers (TRV), Abbott Labs (ABT), ASML (ASML), U.S. Bancorp (USB), Ally Financial (ALLY), and others will report earnings.
Energy complex settles mixed
17-Oct-23 15:00 ET
Dow -105.57 at 33878.93, Nasdaq -77.72 at 13490.26, S&P -15.81 at 4357.82
[BRIEFING.COM] The major indices moved lower over the last half hour.
Energy complex futures settled mixed. WTI crude oil futures rose 0.1% to $86.73/bbl and natural gas futures fell 1.2% to $3.08/mmbtu. The S&P 500 energy sector (+0.9%) is among the top performers alongside the materials sector (+0.9%).
United Airlines (UAL), Omnicom (OMC), J.B. Hunt Transport (JBHT), and Interactive Brokers (IBKR) are among the notable companies reporting earnings after today's close.
Moderna continues to slip among S&P 500 stocks, VFC advances on activist chatter
17-Oct-23 14:30 ET
Dow -63.79 at 33920.75, Nasdaq -44.33 at 13523.65, S&P -8.25 at 4365.38
[BRIEFING.COM] The S&P 500 is tied for first place with the Dow Jones Industrial Average, each down just -0.19% apiece.
S&P 500 constituents Moderna (MRNA 86.45, -5.49, -5.97%), Catalent (CTLT 45.00, -1.52, -3.27%), and Western Digital (WDC 44.74, -1.01, -2.21%) dot the bottom of the standings. MRNA continues its recent string of losses, while WDC dips on reports that its deal with Kioxia may be in danger.
Meanwhile, VF Corp (VFC 18.34, +2.15, +13.31%) is today's top gainer following comments from shareholder Engaged Capital which suggested the company refresh its Board in order to drive value.
Gold modestly higher on Tuesday
17-Oct-23 14:00 ET
Dow -94.22 at 33890.32, Nasdaq -71.21 at 13496.78, S&P -14.13 at 4359.50
[BRIEFING.COM] With about two hours to go on Tuesday the tech-heavy Nasdaq Composite (-0.52%) is today's top laggard, the major averages having shuffled lower over the prior half hour. In recent news, Rep. Jim Jordan failed to reach the 217 vote threshold in the House to be elected Speaker.
Gold futures settled $1.40 higher (+0.04%) to $1,935.70/oz, modest gains loomed over by a higher treasury yield market and subdued trading in the greenback.
Meanwhile, the U.S. Dollar Index about flat at $106.25.
Page One
Last Updated: 17-Oct-23 09:01 ET | Archive
Rates tracking higher, stocks tracking lower
The equity futures market is pointing to a lower open for stocks, but don't blame the earnings news. Bank of America (BAC), Goldman Sachs (GS), Johnson & Johnson (JNJ), and Lockheed Martin (LMT) surpassed their respective consensus earnings estimates.
The good earnings news may be deemed good at another time, but it seems to be just hanging out there at the moment as corporate news that is being overshadowed by a continued rise in Treasury yields, lingering uncertainty about the evolution of the Israel-Hamas War, and political uncertainty here at home as the House tries to fill a vacant Speaker chair.
Rep. Jim Jordan (R-OH) is the GOP's new nominee coming out of conference, but it remains unclear if he will get the 217 votes needed to be elected Speaker. A full House vote will be held at 12:00 p.m. ET today.
Participants will have to wait and see how the vote unfolds, but they don't have to wait any more to see how the September Retail Sales Report unfolded. It was out at 8:30 a.m. ET, and it was stronger than expected.
Total retail sales increased 0.7% month-over-month in September (Briefing.com consensus 0.3%) following an upwardly revised 0.8% increase (from 0.6%) in August. Excluding autos, retail sales jumped 0.6% month-over-month (Briefing.com consensus 0.2%) following an upwardly revised 0.9% increase (from 0.6%) in August. The strength wasn't just because of higher gasoline prices either. Excluding gasoline stations, retail sales were up 0.7%.
The key takeaway from the report is that it doesn't reflect a consumer who is shying away from spending. That understanding should translate favorably into Q3 GDP forecasts, and less favorably in forecasts pertaining to the Fed's policy view.
Treasury yields, which were already higher ahead of the Retail Sales report, continued their climb after its release. The 2-yr note yield is up six basis points to 5.15% and the 10-yr note yield is up 11 basis points to 4.82%. The September Industrial Production and Capacity Utilization Report will be released at 9:15 a.m. ET.
The move in the Treasury market has applied some added weight to the equity futures market.
Currently, the S&P 500 futures are down 23 points and are trading 0.6% below fair value, the Nasdaq 100 futures are down 118 points and are trading 0.8% below fair value, and the Dow Jones Industrial Average futures are down 98 points and are trading 0.3% below fair value.
The broader market, therefore, is on track for a lower open, but of course there will be some individual standouts like Bank of America (BAC), which is up 1.4% after its earnings report, and Wyndham Hotels & Resorts (WH), which is up 12.4% after receiving a hostile takeover offer from Choice Hotels International (CHH) for $90.00 per share in cash and stock.
All moves of course are unfolding against a tense, and highly uncertain, geopolitical backdrop. Israel has yet to launch its ground invasion on Gaza, but President Biden will be traveling to Israel on Wednesday to show U.S. support for Israel and to consult with regional leaders on next steps.
To be sure, each step is a delicate one in the attempt to keep a wider conflict from happening.
-- Patrick J. O'Hare, Briefing.com
V.F. Corp extends yesterday's relief rally on a report of Engaged Capital's growing stake (VFC)
V.F. Corp (VFC +13%) extends its relief rally today after bouncing off 52-week lows yesterday. Today's upbeat sentiment stems from a WSJ report mentioning Engaged Capital building a stake in the apparel and footwear company known for The North Face and Vans brands. With VFC hitting one-year lows yesterday, Engaged Capital is buying shares on the cheap, confident that with its reportedly proposed changes, it can lean on the powerful brands from VFC to turn the company around. Some of the plans WSJ noted Engaged Capital is targeting include costs-savings potentially worth at least $300 mln annually and exploring a strategic review of VFC's noncore assets and real estate.
- Although VFC's brands are known globally, turning the company around will be no simple task, especially in the immediate term. While retail sales data for September indicated consumers' willingness to continue spending, apparel and footwear brands have struggled in the current climate. Management conceded in August that macroeconomic conditions remain complex and volatile, acknowledging a potentially higher hurdle this month with the end of the student loan pause.
- Still, VFC remained confident in delivering increasing operating earnings through improved gross margins and healthy cash flow, even if it was slightly more cautious about its top-line growth over the near term. Its current cost-saving initiatives include implementing additional automation across its facilities and enhancing its consumer-facing digital ecosystem. Direct-to-consumer sales drove growth last quarter, reflecting early success from management's focus on this channel.
- Under a new CEO, since the former executive Steven Rendle retired in December, VFC has already started mounting its comeback story. CEO Bracken Darrell stepped in to fill the CEO role earlier this year, taking part in VFC's quarterly conference call for the first time in August. The change in leadership was another factor Engaged pointed to regarding its optimism in reversing VFC's string of lackluster earnings reports.
- While not a former executive within the apparel business, Mr. Darrell's experience is in corporate turnarounds, lifting Logitech's (LOGI) market share by expanding into new categories and products. The former LOGI CEO succeeded in this strategy, increasing the company's revenue by over 100% during his tenure, which helped boost shares by around 10x.
Bottom line, Engaged Capital's growing stake in VFC is a vote of confidence in the company, its brands, and its new CEO's ability to emulate his success at LOGI. While the retail demand backdrop has endured softening demand as discretionary spending wanes in light of higher interest rates and sticky inflation, VFC commands brand loyalty and a stable long-term outlook. More individuals have shown a desire to spend time outdoors since the pandemic, evidenced by sustained travel and camping demand, an encouraging trend given VFC's emphasis on outdoor footwear and apparel.
Wyndham Hotels & Resorts trades higher on CHH bid, but seems like it prefers to stay independent(WH)
Wyndham Hotels (WH +9%) is up sharply today after Choice Hotels (CHH -5%) announced a $90 per share cash-and-stock proposal to acquire Wyndham. Not only that, but Choice disclosed that discussions have been ongoing since April. Choice has made a number of proposals to Wyndham in recent months with the price improving and the cash component increasing.
However, Wyndham has raised questions regarding the value of Choice stock and timing for obtaining regulatory approvals. As such, Wyndham made clear its unwillingness to proceed with further discussions. We suspect that is why Choice has now gone public, to perhaps to get WH shareholders onboard with the deal and perhaps pressure WH management.
- Briefing.com sees why Choice would find Wyndham attractive. We recently profiled WH in our YIELD rankings. For one thing, it's the world's largest hotel franchising company by number of properties with a leading presence in the economy and midscale segments of the lodging industry. It operates a portfolio of 24 hotel brands (Super 8, Days Inn, Ramada, Microtel, La Quinta etc.)
- WH has moved from a franchise and managed hotel company to a pure play franchise business, having sold its own hotels and exited the US Hotel Management business. Choice is not quite as large as Wyndham, but it is a major lodging franchisor in its own right. Its portfolio of 22 brands range from full-service upper upscale properties to midscale, extended stay and economy.
- Overall, we think a deal would make a lot of financial sense, but our first thought is whether this would pass regulatory scrutiny. Also, our sense is that WH does not seem too excited about the large equity components that Choice has been offering. In its final $90 bid, it would be $49.50 in cash plus 0.324 shares of CHH. That 55/45 split still strikes us as pretty high. And WH has already raised questions regarding the value of Choice stock. Clearly, WH would want a higher cash component.
- Another factor is that WH's business has been recovering. In late July, WH reported strong Q2 results. The company said that demand growth and recovery overseas was especially strong. China is now at 99% of 2019 RevPAR levels while US RevPAR is now normalizing against the record comps seen last year.
- Also, WH is a play on the infrastructure spending coming down the pike. Workers need lodging, often in rural areas, when repaving new highways, roads, bridges. WH has noted it has been preparing for this, including expanding its sales teams in this area. Finally, WH's stock has pulled back recently and we suspect management would be hesitant to sell down here just as the consumer has been travelling more and ahead of the infrastructure opportunity.
Bank of America follows suit and posts upside results as rising rates provide a lift (BAC)
Following in the footsteps of JPMorgan Chase (JPM), Wells Fargo (WFC), and Citigroup (C), Bank of America (BAC) posted better-than-expected 3Q23 results, buoyed by healthy net interest income growth and a rebound in its investment banking and trading businesses. Similar to those three rivals, rising interest rates have mostly benefitted BAC as the bank generates a greater spread between the interest it earns on loans and the interest it pays out on deposits and savings accounts.
- Rising interest rates have also helped BAC's trading business -- including on the fixed income side, where trading revenue grew by 6% to $2.7 bln. Mortgage products were an area of strength here, offsetting weakness in currencies and rates products.
- Trading activity for equities was also solid with trading fees jumping by 10% to $1.7 bln.
- Like its banking peers, BAC also experienced a bounce back in its investment banking business. Global banking revenue grew by $6% to $10.5 bln as fees for advising on mergers and acquisitions rose by about 4%.
- Investment banking fees were up 2% as BAC claimed the number three spot in the investment banking fees for the industry.
- Switching over to the Consumer Banking side, revenue increased by 6% to $10.5 bln, driven by higher net interest income and loan balances. Deposits did decrease by 8%, though, as competition for deposits has intensified in this rising interest rate environment.
BAC's earnings report did have a couple other blemishes.
- For instance, net charge offs increased by nearly $400 mln yr/yr to $911 mln, reflecting the impact of higher interest rates on credit cards. While this level remains below pre-pandemic levels, net charge offs will be a metric to keep an eye on moving forward as consumers try to keep up with their credit card bills.
- Additionally, BAC's unrealized losses on its "held-to-maturity" instruments -- which are mainly government debt and mortgage-backed securities -- spiked by $131.6 bln as interest rates climbed higher. While BAC isn't under any obligation to take the losses on these investments, they are acting as a hindrance in terms of restricting the amount of capital BAC has to lend out.
Overall, though, it was a solid performance for BAC given the challenging macroeconomic conditions that saw U.S. consumer spending slowing, but remaining ahead of last year, according to CEO Brian Moynihan.
Goldman trades a bit lower on earnings; capital markets recovery to continue if conditions allow(GS)
Goldman Sachs (GS -1%) is trading modestly lower after reporting Q3 results this morning. After an EPS miss in Q2, it was nice to see Goldman bounce back with EPS upside, albeit pretty modest upside. Revenues inched lower, down 1.3% yr/yr to $11.82 bln, but that was better than analyst expectations.
- Before digging into earnings, recall that last week, Goldman announced a deal to sell its GreenSky platform and associated loan assets to a consortium of institutional investors led by Sixth Street with the deal set to close in Q1. We view the sale as an admission by Goldman that it erred in its decision to expand in consumer lending. Goldman can now focus on its two core franchises: Global Banking & Markets (GBM) and Asset & Wealth Management (AWM).
- Turning to the Q3 report, its GBM is by far Goldman's largest segment. Revenue rose 6% yr/yr and 11% sequentially to $8.01 bln. While overall Investment Banking fees rose just 1% to $1.55 bln, Equity and Debt underwriting units rose nicely, up 26% and 27%, respectively. Recall that Goldman was involved with big IPOs ARM and CART in September. So, equity underwriting picked up nicely and debt underwriting was fueled by leveraged finance activity. However, a 15% decline in advisory fees, caused by a decline in completed M&A transactions, limited growth for its IB subsegment.
- On the call, Goldman said that the IPO market has started to reopen since Labor Day. Goldman was lead on three of the four IPOs and jointly on the fourth. No other bank can make that claim. The company is encouraged by the prospect of a wider reopening of capital markets. If conditions remain conducive, Goldman expects a recovery for capital markets and strategic activity to continue. And as a leader in M&A advisory equity underwriting, a resurgence in activity could be a tailwind.
- Staying within GBM, its FICC unit saw revenue decline 6% yr/yr to $3.38 bln as it was lapping a strong 3Q22. Lower FICC intermediation revenue was driven by significantly lower revenue in currencies and commodities and lower revenue in credit products. And finally, Equities subsegment revs rose 8% to $2.96 bln, reflecting significantly higher revenue in prime financing, partially offset by significantly lower revenue from portfolio financing. Its AWM segment saw revenue decline 20% yr/yr to $3.23 bln, reflecting net losses in Equity investments, partially offset by higher Management and other fees.
- In terms of its macro outlook, the US economy is proving to be more resilient than expected, but there are reasons to remain vigilant. Treasury rates have risen sharply over the past few months, plus recent inflation and employment data has come in above estimates, driving a market expectation of higher-for-longer interest rates.
Overall, the market is not reacting too much to Goldman's report. There were a lot of cross currents. There was upside to consensus and underwriting grew nicely. Goldman also sounded somewhat positive on the IPO market and capital markets generally. However, its FICC business was a bit weak and its AWM segment saw a pretty good size drop in revs. Some macro factors also remain a concern. With that said, we commend for Goldman cutting its losses on its consumer business and moving on from GreenSky.
Johnson & Johnson's Q3 results were healthy but not sufficient to outshine lingering headwinds (JNJ)
Despite delivering another double-digit earnings beat and decent upside on its top line in Q3, Johnson & Johnson (JNJ -1%) is dropping today. The pharmaceutical and medical device giant also raised its FY23 outlook. With its former Consumer Health business spun off into Kenvue (KVUE) in May, Q3 marked the first quarter of a slimmer JNJ. While this leaner JNJ still posted plump numbers in the quarter, the market is yawning, reflecting some disappointment that results were not more substantial as well as persistent uncertainties on the horizon.
- Revenue (excluding Consumer Health) expanded by 6.8% yr/yr to $21.35 bln, moderately higher than analysts expected, fueling JNJ's 19.3% jump in earnings to $2.66, sufficient for its fourth-straight double-digit beat.
- As has been the case throughout FY23, MedTech led overall growth, advancing 10.0% yr/yr to $7.46 bln. JNJ's $16.6 bln acquisition of Abiomed last year contributed 4.6 pts to MedTech's growth in Q3. As expected, MedTech faced some adversity during the quarter, primarily due to international sanctions in Russia alongside volume-based procurement in China. Additionally, a moderate deceleration came with a return to seasonality; summer months tend to see fewer surgeries than winter months.
- Unlike last quarter, MedTech's margins fell in Q3, dropping 30 bps to 25.0%, driven by commodity inflation and unfavorable product mix. JNJ has been implementing a two-year restructuring program to improve MedTech's margin profile, focused on the operations of its orthopaedic division. As a result, short-term revenue disruption totaling around $250 mln is expected to be completed in 2025.
- Innovative Medicine, formerly JNJ's Pharmaceutical segment, remained the laggard, expanding sales by 5.1% to $13.89 bln. The relatively weaker results from Innovative Medicine branched from outside the U.S., where sales fell 2.3% compared to a 10.9% improvement domestically. The disparity stemmed from the loss of exclusivity of Zytiga in Europe, clipping overseas growth by approximately 5 pts. On a lighter note, margins moved 400 bps higher yr/yr 45.4%.
- Looking ahead, JNJ hiked its adjusted EPS forecast for FY23 to $10.07-10.13 from $10.00-10.10, narrower than the size of its Q3 beat, illuminating a conservative near-term outlook. The company's raised FY23 revenue target was slightly more upbeat, projecting $84.4-84.8 bln compared to its previous $83.6-84.4 bln estimate.
JNJ's Q3 performance was solid but not quite at the level that would instill enough confidence for investors to pile back into the stock following a ~10% correction since August highs. The ongoing talc litigation remains a cloud over JNJ. Management stated today that it continues to pursue its four-pronged strategy communicated last quarter. Meanwhile, popular new weight-loss medicines (GLP-1s) remain a concern. Management touched on this development, adding that there are some adverse effects in its bariatric business in the short term. However, JNJ is optimistic that GLP-1s could act as a tailwind, complementing possible surgery. While the talc litigation remains a headwind, we view JNJ's Q3 results as encouraging. It makes its recent sell-off a solid entry point, especially if economic conditions worsen, given healthcare's defensive nature.
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