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Palantir is an artificial intelligence, analytics, and automated decision-making company that leverages data to drive efficiency across its clients' organizations. The firm serves commercial and government clients via its Foundry and Gotham platforms, respectively. Palantir works only with entities in Western-allied nations and reserves the right not to work with anyone that is antithetical to Western values. The company was founded in 2003 and went public in 2020.

According to the advance estimate released by the Bureau of Economic Analysis (BEA), U.S. gross domestic product (GDP) rose in the third quarter at an annualized rate of 3.4%. That's above the 3.2% consensus and an acceleration from 2.2% in the second quarter. Real final sales to private domestic purchasers, which focuses on the core consumer spending and business investment, were up a strong 4.9%, topping a sturdy 4.6% increase in 2Q. The measure often provides a better signal of economic momentum than headline GDP. The results are consistent with the Federal Open Market Committee's (FOMC's) recent comment that economic activity is expanding at a strong pace. Nominal GDP, which is not adjusted for inflation, was up 5.6% in 3Q. The FOMC voted 10-2 to maintain the Federal Funds target at 3.75%-4.0%. Argus Fixed Income Strategist Kevin Heal expects a quarter-point hike in December before the FOMC moves to the sideline in 2027. Spending by consumers rose 3.8% in 3Q, matching 2Q. Durable goods slowed, but the big services category grew 4.1%, up from 3.4% in 2Q. Services added about 1.9 points of growth. Private investment grew 19.4%. Spending on Artificial Intelligence continued to be an important driver of growth. Intellectual property products grew by 8.4%. Equipment grew 20.9%. Net exports of goods and services, also called the trade balance, reduced 3Q GDP by 3.3 percentage points. Imports increased by 19.7%. Spending and investment by the federal government was up 15.8% after a 2.4% decline in 2Q. National defense spending was up 11.7%, but contributed only 0.41 percentage point to growth. In other reports from the BEA, headline PCE inflation was up 3.6% on a year-over-year basis in September. That was in line with consensus, but up from a 3.4% pace in August and well above the Federal Reserve's 2% target. The FOMC acknowledged Wednesday that inflation has been running above the committee's objective for close to six years, but doubled down on returning inflation to the 2% target. Core PCE inflation was also elevated, up 3.1%, in line with consensus, but a tick higher than in August.

Netflix’s relatively simple business model involves only one business, its streaming service. It has the biggest television entertainment subscriber base in both the United States and the collective international market, with more than 325 million subscribers globally. Netflix has exposure to nearly the entire global population outside of China. The firm has traditionally avoided a regular slate of live programming or sports content, instead focusing on on-demand access to episodic television, movies, and documentaries. The firm introduced ad-supported subscription plans in 2022, giving the firm exposure to the advertising market in addition to the subscription fees that have historically accounted for nearly all its revenue.

On Friday, the Bureau of Labor Statistics (BLS) will report the September unemployment rate. Our forecast is for a downtick to 4.0%, while the consensus is for the rate to be unchanged at 4.1%. The reason for our optimism is evidence of strong 3Q GDP growth. The Federal Reserve Bank of Atlanta's GDPNow is projecting 5% growth for the third quarter, up from 1.5% in 2Q. A "nowcast" is an enhanced tally of the indicators that have been released to date. Growth in real final sales to private domestic purchasers is projected to be up an annualized 4.8% in 3Q. This is a useful measure of economic output because it excludes the recently noisy trade balance, inventories, and government categories and focuses on the pillars of consumer spending and gross private fixed investment. Growth that is well above potential GDP could lead to job gains and lower unemployment. Potential GDP is the structural growth rate for the economy. It is currently about 2.2%. An additional indicator for lower unemployment is that both our 115,000 estimate for nonfarm payroll growth and consensus call of 90,000 are above a reasonable estimate of "breakeven." The Atlanta Fed's Jobs Calculator estimates that it would take job gains of 72,900 per month to hold the unemployment rate at 4.1%. Empirically that looks reasonable. Unemployment has been steady at 4.2% in June, 4.1% in July, and 4.1% in August. Despite some month-to-month volatility, the three-month average for nonfarm payroll gains of 71,000 is consistent with the "breakeven" estimate. The Weekly ADP estimate for private payrolls points to a little-changed unemployment rate. The ADP estimate of 20,000 new jobs a week over the last four weeks creates a pace of about 80,000 a month -- which is close to breakeven. Can unemployment remain at 4.1% or lower without stoking inflation? We think it can. Our estimate for growth in average hourly earnings is 3.1%. Subtracting productivity growth of about 2% provides a 1.1% approximation of unit labor costs, and that is well below the Fed's 2% inflation target.