Bloomberg Stock Movers
2026-10-29 · Hosted by — · Bloomberg / iHeartMedia
Executive Summary
A busy pre-market earnings morning saw Eli Lilly shares up 4% after the company raised full-year adjusted EPS guidance to $35-$36 per share (up 50 cents from the prior range), fueled by a third-quarter top-and-bottom-line beat and strong Monjaro revenue. Merck shares rose 2% after also raising its full-year profit forecast, driven by its cancer drug Keytruda and a newer, faster-to-administer version called Keytruda Qlex, even as some European countries blocked sales of the treatment.
Key Stories & Changes
1. Eli Lilly Raises Guidance on Monjaro Strength
Shares up 4% (ticker LLY)
Full-year adjusted EPS guidance raised to $35-$36 per share, up 50 cents from the prior range
Third-quarter beat on both top and bottom lines
Monjaro revenue came in ahead of estimates
2. Merck Raises Profit Forecast on Keytruda Strength
Shares up 2% (ticker MRK)
Full-year profit forecast raised; third-quarter top and bottom lines beat
Growth driven by cancer drug Keytruda, with a newer formulation, Keytruda Qlex, that can be administered in less time
Sales beat estimates even as some European countries have blocked sales of the treatment
Moderna also noted as developing an oncology drug in partnership with Merck
3. Caterpillar Drops Despite Earnings Beat on Weak Guidance
Shares down 9% in the pre-market (ticker CAT)
Third-quarter bottom-line beat; top line came in around estimates
Guided to "moderate" sales and revenue growth for Q4 versus Q4 2025, and "high teens" growth for fiscal year 2026 versus 2025
Modeled out (assuming ~17.5% growth), this implies roughly $20.8 billion in revenue — lighter than analyst estimates, suggesting an implied slowdown
4. Microsoft and Alphabet Diverge Sharply
MSFT: Microsoft — +3% (pre-market) — Azure revenue (ex-currency) up 48%, beating estimates; CapEx of $45B came in below estimates, partly due to third-party cloud capacity delivery delays; company remains free-cash-flow positive
GOOGL: Alphabet — -10% (pre-market) — Core search business, nearly two-thirds of total revenue, grew at its slowest pace in five quarters amid AI cannibalization concerns
Trends Identified
1. Divergent AI Monetization Paths Among Hyperscalers
Microsoft and Alphabet are being treated as opposite sides of the "AI coin": Microsoft is rewarded for spending on AI while maintaining positive free cash flow (cash left over after operating and capital expenses) across multiple revenue lines, while Alphabet is punished as AI-related disruption concerns weigh on its core, highly profitable search business.
2. Pharma Earnings Strength Continues on Weight-Loss and Oncology Drugs
Both Eli Lilly and Merck raised guidance this morning, underscoring continued strength in GLP-1 weight-loss drugs (Monjaro) and oncology treatments (Keytruda) as durable growth drivers even amid broader market volatility tied to tech earnings.
3. Guidance Language Can Mask Underlying Slowdowns
Caterpillar's stock drop despite a bottom-line beat illustrates how qualitative guidance language ("moderate," "high teens") can imply a quantitative slowdown once modeled against prior performance, catching investors by surprise even without an explicit miss. ---
Sentiment Analysis
Overall Market Sentiment: Mixed, Earnings-Driven
Markets showed sharply differentiated reactions across sectors this morning, from pharma strength to tech divergence to industrial disappointment.
Risk Factors Highlighted
AI cannibalization of Alphabet's core search business: Search, nearly two-thirds of total revenue, grew at its slowest pace in five quarters.
European regulatory risk for Merck: Some European countries have blocked sales of Keytruda Qlex despite otherwise strong sales performance.
Caterpillar guidance implying a slowdown: Modeled fiscal 2026 guidance suggests revenue below analyst estimates despite a bottom-line beat.
Third-party cloud capacity delivery delays: Microsoft's lower CapEx was partly attributed to delivery delays rather than intentional spending discipline, a nuance that could reverse in future quarters.
This episode was covered in today's [The Market Signal — 2026-10-29](https://marketsignal.beehiiv.com/p/the-market-signal-2026-10-29), a cross-source synthesis of multiple podcast reports.