CWS Market Review – October 21, 2025 Crossing Wall Street

CWS Market Review – October 21, 2025

(This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

The S&P 500 closed higher today for the third up day in a row, although it was a tiny gain today (+0.0033%). The index is now within striking distance of its all-time high close from almost two weeks ago. I’ve been impressed by how easily the market can move past troubling news.

Right now, Wall Street is focused on earnings. This is the time of year when we learn which companies have been doing well and which have not. Companies that fall short of expectations can expect to be punished by the market gods.

Earnings season is moving into high gear. We already have some early numbers, but I caution you not to read too much into such a small sample size.

So far, 78 companies in the S&P 500 have reported their Q3 numbers. Of those, 87.2% have beaten expectations. The long-term average “beat rate” is 67%. (That’s correct. On Wall Street, you’re expected to beat expectations.)

For the quarter, earnings are expected to grow by 9.2%. In fact, if you don’t count the energy sector, then earnings are expected to be up by 10.1%. The tech sector is expected to have earnings growth of 22.2%.

We had several more earnings reports today. Coca-Cola (KO), for example, had a good report. It beat on sales and earnings but the soft drink company said that sales may be soft going forward. In particular, Coke said that lower-income folks are buying less soda. The good news is that Coke stuck by its full-year forecast.

Coke is a bluechip as is 3M (MMM). The Post-It notes company said this morning that it made $2.19 per share which beat estimates of $2.07 per share. Sales rose 3.5% to $6.52 billion. Wall Street had been expecting $6.25 billion.

The best news is that 3M boosted guidance. For this year, 3M sees earnings coming in between $7.95 and $8.05 per share. The previous range was $7.75 to $8 per share.

Danaher (DHR), a long-time favorite of ours, reported good news. Wall Street had been expecting earnings of $1.72 per share. Instead, Danaher said it made $1.89 per share. Sales rose to $6.05 billion which was $50 million more than Wall Street had expected. Danaher also reiterated its full-year range of $7.70 to $7.80 per share.

Shares of Danaher got a nice lift in today’s trading, which also helped Thermo Fisher Scientific (TMO), a competitor which is also one of our Buy List stocks. TMO is due to report tomorrow.

But the biggest surprise may be General Motors (GM). The stock soared on its results.

The carmaker said it made $2.80 per share which was well above estimates of $2.31 per share. Quarterly revenue fell a bit to $48.59 billion. Wall Street had been expecting $45.27 billion.

GM raised its earnings guidance to a range of $9.75 to $10.50 per share from the earlier range of $8.25 to $10.00 per share.

After the closing bell today, Netflix (NFLX) reported a big earnings miss. The company made $5.87 per share. That’s $1.10 below estimates. For Q4, NFLX sees earnings of $5.45 per share which was one penny better than estimates.

How about Beyond Meat (BYND)? You might think the company has had a rough time. After all, its stock fell from a peak of $239 per share six years ago to 50 cents last week. But the stock has soared in recent days thanks to its inclusion in the Roundhill Meme Stock ETF (MEME). The stock gained 146% today.

Over the summer, I told you about Mueller Industries (MLI), which is one of our Buy List stocks. I like Mueller a lot. It’s a well-run mid-cap that’s largely overlooked by Wall Street. The stock is up over 30% this year.

Mueller makes and sells copper, brass, and aluminum products. The company operates through three segments: Piping Systems, Industrial Metals, and Climate. You may have noticed that copper prices are soaring and much of the reason is our tariff policy. Since early 1992, the stock is up by 40,000% yet only one analyst follows it.

For Q2, Mueller’s net income was $1.96 per share. That’s compared with $1.41 per share for the same quarter one year ago. The lone analyst had been expecting Q2 earnings of $1.62 per share. Mueller’s net cash generated from operations was $190.6 million.

This morning, Mueller reported Q3 earnings of $1.88 per share. That’s up from $1.48 per share one year ago. Copper averaged $4.83 per pound during the quarter, which is a 14.3% increase over last year. The company has no debt and a cash position of $1.3 billion.

Mueller’s CEO said, “Looking forward, we are highly optimistic about our business. Our plants operate most effectively when fully loaded. Given our additional capacity, we therefore expect to benefit from even greater production efficiencies when demand rebounds.”

MLI rallied over 4% today. I’ll repeat what I said this summer. If business continues to go well at Mueller, then I think the company can earn $6 per share this year and perhaps $6.50 per share next year. If that’s correct, then the company is attractively valued. The stock reached a new all-time high today.

The prices for gold and silver plunged today. In fact, it was one of the worst daily losses for the metals in years. Silver futures lost more than 7% today.

Both metals have rallied spectacularly in recent weeks. Every pullback turned into a buying opportunity. Could this one be different?

In this week’s issue, I want to talk more about silver. Last week, the price for silver got above $54 per ounce. That’s a market gain of more than 85% on the year. The metal passed its all-time high reach more than 35 years ago.

In 1979-80, there was a furious rally in silver when two Texas brothers tried to buy all the silver in the world. What’s even crazier is that they nearly got away with it.

When Nelson Bunker Hunt and Herbert Hunt started their plan, silver was around $6 per ounce. By early 1980, it got to $50 per ounce. That’s close to $200 adjusted for inflation. Time Magazine estimated they made between $2 billion and $4 billion in just nine months. To pull this off, they had to borrow enormous amounts of money. At one point, it was estimated that they held one-third of the world’s deliverable silver. Tiffany took out a full-page article to denounce them.

The Hunt brothers were the sons of the legendary oilman, Haroldson Lafayette “H.L” Hunt, Jr. Hunt the senior wrote a novel based on his idea of a fascist utopia called Alpaca. I remember one person calling it “1984, but Big Brother is the good guy.”

Not all the Hunts were so eccentric. Lamar Hunt was one of the most influential people in the development of modern football. He was the one who came up with the name “Super Bowl.” To this day, the winner of the AFC championship game is awarded the Lamar Hunt Trophy.

The Hunts were convinced that the Establishment was out to crush them, and they were pretty much right. The COMEX changed the margin requirement which forced the brothers to put up much more collateral.

(By the way, one of my first jobs in this industry was making margin calls. That’s not a metaphor. I had to actually call people to tell them they had to sell or put up more money.)

On March 27, 1980, the bottom fell out of the silver market. In one day, silver dropped by 50%. This is now known as “Silver Thursday.” In one day, the Hunts lost $1.7 billion. The brothers had to put up more money, but they couldn’t reach their margin requirement. The government was worried that Wall Street banks were so much in debt to the Hunts that if the Hunts went under, so would the banks. A silver panic could start a banking panic.

The Hunts had finally been broken. By 1982, silver was going for less than $5 per ounce. They later filed for Chapter 11. The brothers eventually become the models for brothers Randolph and Mortimer Duke in the movie Trading Places.

That’s all for now. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

Posted by Eddy Elfenbein on October 21st, 2025 at 6:32 pm

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.