J.D. DURKIN: Good morning, Action Alerts Plus subscribers. Chris Versace and I are now back yet again to bring you everything you need to know to get ready for another busy week ahead. But first, let's start with a little reflection. Chris, good morning. Thank you for being here.

CHRIS VERSACE: Happy Monday, J.D. . And I hope you're getting ready for Halloween.

J.D. DURKIN: I certainly am, my friend. I'm going out as a stressed out journalist for Halloween. This is my Halloween costume. I think I'm pulling it off rather well. Big, good holiday wishes to you. It's a jam-packed week of earnings. It was a jam-packed week of earnings. Alphabet stealing the show for good and for not so good reasons. We also got United Rentals. Chris, who are the winners and losers when it comes to our holdings that we've had reports so far?

CHRIS VERSACE: Oh, boy. Microsoft delivered a really good quarter last week, as well as several others. But I think what we need to contemplate, J.D. , is the reaction to the market when we get these earnings reports. We talked a little bit about this last week with Alphabet. Across the board, numbers were really good. The market was a little concerned about that Google Cloud number.

But as we pointed out, when you sized up its results on a quarter-over-quarter basis, Google Cloud was the fastest-growing cloud business compared to Microsoft, even Amazon. So watching the market reaction here is going to be very critical, where perhaps really good news just isn't good enough for the market. That is really on our minds as we prepare for the earnings that we have this week.

J.D. DURKIN: So, Chris, a quick followup there, if I can. For anyone that may have seen those Alphabet cloud numbers and then worried or wondered OK, what does this mean for AWS, what does this mean for Microsoft Azure, was there any reason to think that that should have metastasized onto other names? Or was that little bit of a revenue miss unique to Alphabet?

CHRIS VERSACE: So that's actually a great context-related question, J.D. , because we are in the thick of earnings. And it's always important to not only take in what a particular company says, but how does its results stack up against everybody else? You mentioned that for Google against Microsoft and against Amazon. Again, Google Cloud's business was up around 21% year over year, up more than 4% on a quarter-over-quarter basis. While the growth was a little slower on a year-over-year basis, it continued to take share against Amazon and Microsoft. And I think that's the point that the market has missed so far.

It's also a reason why, when Google shares continued to fall later in the week, we stepped up and actually upgraded them, given the prospects for continued digital spending on advertising, which is, of course, the bread and butter business, but further growth prospects for its cloud business and that business becoming increasingly profitable in the coming quarters. And that same context that you mentioned is going to be great again this week. This morning, we had McDonald's report. But later in the week, we're going to get Wendy's and other fast food restaurants. So another week of great context.

J.D. DURKIN: And another week of great conversations about food items that will make all of us hungry for the holiday. Last week, you boosted a few price targets, Chris. You upgraded Alphabet, speaking of. And you nibbled at shares of Universal Display as well as Qualcomm. Chris, what are the highlights for members who may have missed an alert or two, I wonder?

CHRIS VERSACE: So whenever we make changes in ratings or we actually wade into existing positions, those are always big moments for the portfolio. So as we already discussed, last week, we upgraded the shares of Alphabet to a 1 rating, really using what we see as a mismatch in the market as well as the continued pressure on the shares. Luckily, they're starting to rebound along with the market this morning. So that's a nice positive.

But as it relates to the shares of Universal Display and Qualcomm, that was a very specific action. It stemmed from a report from IDC, research firm that tracks a lot of technology-related items. They found that smartphone sales jumped almost-- well, high double digits, let's say, in the September quarter compared to the June quarter. And what's important here is, the first half of the year, those smartphone sales were kind of lackluster, not really growing much.

This is simply the latest data point to us on top of a growing pile of others that says we are indeed going to see the seasonal strength in smartphone demand unfold. That led us to pick up those shares of Universal Display and Qualcomm. And we should have some nice confirmation points this week. One, we've got Samsung reporting on Wednesday. Then Qualcomm reports Wednesday night. And then Thursday, we have Apple reporting. And then also Thursday after the close, Universal Display.

J.D. DURKIN: All right. Well, speaking of strength, let's talk GDP. We got that figure with PCE last week. Gave Mr. Powell quite the scene-setter for this week's FOMC decision. Chris, on Thursday's Rundown, you let members know markets were increasingly tipping towards fear, of course, in the classic bull versus bear debate. Is that still your mood as you look ahead to things later in the week, but as you're situated as of this Monday morning?

CHRIS VERSACE: So as we kick things off, J.D. , again, the market is trying to claw its way back, if you will, from technical correction as well as being meaningfully oversold. But coming into the week, the CNN Business Fear & Greed Index still at extreme fear. We've got the expansion of what's going on in the Middle East. That's got renewed concerns for oil, for gold, and just overall spread and what that might mean. So I do think the market, while it's looking to be positive here, there's a number of reasons to be, I don't know about fearful, but I will say extremely cautious.

We've got a sea of economic data coming out this week. And I do think, as you got at with your question, that Powell is going to have some very sobering talk for the market on the back of the recent data that we had. If you trace most of the data we've gotten in the last couple of weeks, it points to the economy, again, being stronger than expected, inflation not receding as fast as people were hoping for. And the data we get in the next couple of days could very well reinforce that. So I do think we want to be cautious here as we move through the week.

J.D. DURKIN: All right, Chris, let's talk about MCD, one of the most weighted names in the Dow, trading now at $2.58 a share. It's already kicked off earnings. The last time we talked about it, Chris, you said it's way too early to gauge any potential impact from the newly emerging conversation over weight loss drugs, the Ozempics of the world, what does it mean for these other consumer-facing brands. Did you learn anything new there, Chris?

CHRIS VERSACE: Well, we're still waiting on McDonald's earnings call to be over. But I will say this, when you look at their comp sales for the quarter, they were up roughly 9% globally, a little more than 8% here in the US. Some of that's due to pricing. But it's also due to volume, J.D. . That says the impact that we're fearing, if you will, from some of these weight loss drugs has yet to emerge.

I think the bigger driver in the near term is going to be consumers continuing to feel the pinch of inflation, continuing to dip into their credit cards, dealing with higher interest costs, not just from credit cards, but other areas as well. I continue to think we're going to see that tradedown in where people are dining out. Continues to set up McDonald's rather well, in my opinion.

J.D. DURKIN: All right, looking ahead, we do have names like Apple, Qualcomm, Universal Display, Trinity Capital all on the horizon, Chris. Apple, of course, tends to steal the show. It's likely to do so once again with its "Scary Fast" event. We're also getting that information later on today. Chris, how important is this round of earnings, given what we've heard from the other names in the so-called Magnificent Seven?

CHRIS VERSACE: So it's a big week, right, probably the biggest week we've had thus far. There are more than 1,400 companies reporting, more than 160 S&P 500 constituents. So we're going to have to digest quite a bit, drink from the earnings fire hose, as it were. If I had to pick one report-- granted, all the reports for companies we have in the portfolio are important. But if I had to pick one report that is really going to make or break the week, it is going to be Apple.

And I say that simply because it's just over 7% of the S&P 500, one of, if not the largest holdings. And it is one of, if not the largest holdings as well in the NASDAQ composite, clocking in around 11%. We've learned in the past not to underestimate Apple, right? But this is an evolving landscape. And we're going to have to break down all of its businesses.

I do think tonight's event, "Scary Fast," will be a nice technical event. It'll speak to Apple continuing to refresh its portfolio, particularly for the Macs. It's a nice thing as the PC market looks to find its legs and strengthen and rebound from where it was earlier this year. But make no mistake, the inflection point for Apple's earnings are going to be iPhone, not only what it did in the quarter, but what it guides for the December quarter. That's what we'll be watching most later this week when it comes to Apple.

J.D. DURKIN: Yeah, and you talk about that being 7% or so weights of the S&P. It's a similar story for Microsoft. 28% total weight for the Magnificent Seven stocks combined. Did I get that right, Chris? That's some key consolidation.

CHRIS VERSACE: Yeah, it floats around a little bit day to day. But I would say, J.D. , if we were playing horseshoes, you'd be on the money.

J.D. DURKIN: All right, close enough. I'll take it. Any earnings outside of the portfolio, Chris, we should prioritize keeping an eye on, I wonder?

CHRIS VERSACE: Yeah, like I said, 1,400 is quite a bit. But there are some that we really want to pay attention to, regarding United Rentals in particular. We want to hear what Caterpillar has to say about its outlook for construction equipment, as well as what does it say about incremental speed for infrastructure spending here in the US. With AMD, that could very well support the case that we're seeing a rebound in the PC market.

So we'll want to pay close attention to what they say about that, as well as data center chip demand. We've also got Estée Lauder and e.l.f. Beauty. That's going to be very critical, in my opinion, for our shares of Coty. Management team at Coty continues to execute. I think we're going to be surprised by the domestic demand, particularly for fragrance and other beauty products, at Estée Lauder and e.l.f. That should be a positive for Coty.

J.D. DURKIN: Chris, that in and of itself would be more than enough for a members roundup on this Monday. But there is more. We do have another jobs report headed our way on Friday of this week. My goodness. With all the data we discussed, Chris, it's easy to get lost in the mix. Remind us why the monthly employment report is so significant when it comes to making portfolio decisions.

CHRIS VERSACE: Well, I mean, it's a huge part of the economy. If we see stronger than expected job growth, that's going to tell us that the economy continues to outperform relative to expectations. If wages are stronger than expected, on the one hand, it means that consumers have more money in their pockets, which is a good thing for consumer spending. Remember, our economy is roughly 2/3 directly/indirectly driven by the consumer. But it also says that we might see, again, lingering or extended pressures for inflation. So that's something that we're going to want to watch.

And, J.D. , we've got not only the employment report on Friday, we've got several looks at what we could see on Friday coming courtesy of ADP. We've also got the latest JOLTS report coming up. And of course, the Challenger-Gray job cuts, which not only shows job cuts for the month of October, but if we read really deep into the report, it's going to tell us what its survey says for potential job hirings in October and ahead.

J.D. DURKIN: We will follow that information closely and look forward to your contacts. Chris Versace, thank you, as always. Thanks for helping us kick off the week the right way.

CHRIS VERSACE: Happy to do it, J.D. . Thank you.

J.D. DURKIN: You got it. All right, folks, that's going to do it for today's interview. Chris Versace will be back tomorrow for more on this week's top priorities. Happy trading. Thanks for watching. And we'll see you again soon.