Futures tied to the Nasdaq-100 declined as investors scrutinized Nvidia’s earnings report. Despite Nvidia surpassing third-quarter expectations and providing robust guidance, its shares dropped 3% in premarket trading. This reaction highlights the heightened expectations surrounding Nvidia, as noted by Aswath Damodaran, a finance professor at New York University’s Stern School of Business. He remarked on CNBC’s “Closing Bell: Overtime” that Nvidia not only needs to exceed analyst estimates but must do so by a significant margin, around 10%, to satisfy market anticipations.

European stocks flattened out due to weak global market sentiment. British sports retailer JD Sports saw its shares plummet over 14% in early trading after cautioning that its annual profits would likely hit the lower end of its forecast. Conversely, Zurich Insurance shares climbed 2% following the announcement of a new three-year plan. The overall market sentiment was further dampened by investor reactions to the crucial earnings report from artificial intelligence leader Nvidia.

Asia-Pacific markets experienced a downturn as investors closely monitored tech shares and developments surrounding Indian stocks linked to billionaire Gautam Adani. The chair of Adani Group, along with others, faced an indictment in a New York federal court over a significant bribery and fraud scheme. This news contributed to a decline in several key indices: India’s Nifty 50 dropped by 0.72%, Japan’s Nikkei 225 fell by 0.85%, and Hong Kong’s Hang Seng index decreased by 0.32%. In contrast, mainland China’s CSI300 saw a slight gain of 0.09%. Meanwhile, markets in South Korea and Australia ended the day marginally lower.

Economic Calendar

Earnings Calendar

Notable reports for Wednesday before the bell include AKTR, BJ, BEKE, DE, SCVL, VSTS, & WMG. After the bell reports include CPRT, ESTC, GAP, INTU, ROST, & UGI.

News & Technicals’

Ukraine reported that Russia launched an intercontinental ballistic missile (ICBM) overnight, targeting Dnipro city in the central east of the country. If confirmed, this would mark the first use of such a missile by Moscow in the ongoing conflict. Although the range of an ICBM seems excessive for a strike against Ukraine, these missiles are typically designed to carry nuclear warheads. The deployment of an ICBM would underscore Russia’s nuclear capabilities and signal a potential escalation in the conflict. The attack resulted in injuries to two individuals and caused damage to an industrial facility and a rehabilitation center for people with disabilities, according to local officials.

Gautam Adani, one of the world’s wealthiest individuals, was indicted in a New York federal court on charges related to an alleged bribery and fraud scheme. A spokesperson for Adani Group dismissed the allegations from the U.S. Department of Justice and the U.S. Securities and Exchange Commission against directors of Adani Green Energy as “baseless and denied.” Following the indictment, shares of companies within India’s Adani Group plummeted, with Adani Green Energy — the company at the heart of the allegations — experiencing a significant drop of 17.9%.

Chinese tech giant Baidu reported a 3% year-over-year decline in third-quarter revenue, totaling $4.78 billion for the quarter ending September 30. Despite this drop, the company exceeded market expectations, driven by growth in its AI cloud segment. Net income for the period increased by 14%, reaching $1.09 billion. However, Baidu’s U.S.-traded shares fell nearly 4% in premarket trading following the release of these results.

The Department of Justice is urging a federal judge to mandate that Google divest its Chrome internet browser as a remedy in the ongoing antitrust case. According to the filing, this action is intended to “permanently stop Google’s control of this critical search access point.” This push follows an August ruling by a U.S. judge that determined Google holds a monopoly in the search market. The proposed divestiture of Chrome aims to address and mitigate the competitive harms identified in the case.

Although NVDA was down during the night the US futures this morning have decided it was good enough to push for a gap up open.  Keep in mind the rest of the world seems to have a slightly different opinion.  Today we will look for clues to inspire the bulls or the bears in earnings and economic data while keeping an eye on the rising geopolitical tensions.  The bond yields continue to a concern as well the oil prices rising sharply today due to the escalating conflict.

Trade Wisely,

Doug

Stock futures edged higher on Wednesday as investors anticipated a crucial earnings report from tech giant Nvidia, which is set to release its results after the market close. Market participants are particularly interested in the demand for Nvidia’s Blackwell AI chips. Given Nvidia’s substantial market capitalization of $3.6 trillion, its performance could significantly influence the S&P 500 and Nasdaq Composite for the remainder of the week. Additionally, retailers Target and TJX are scheduled to report their earnings on Wednesday morning. Investors will also be paying close attention to remarks from Federal Reserve Governors Lisa Cook and Michelle Bowman, along with Boston Fed President Susan Collins.

European markets opened on a positive note early Wednesday, with the pan-European Stoxx 600 rising by 0.5% in early trading. Most sectors were in the green, except for the automotive sector. The FTSE 100 started flat but gained 0.2% following the release of data showing U.K. inflation surged to 2.3% in October, surpassing expectations. On the Stoxx 600, Sage Group emerged as the top performer, with its shares soaring nearly 17%, while national lottery operator La Française des Jeux (FDJ) was the worst performer, dropping by 5%.

Asia-Pacific markets experienced mixed performance in volatile trading on Wednesday, influenced by escalating geopolitical tensions between Ukraine and Russia. Investors closely analyzed Japan’s October trade data, which showed a year-over-year export growth of 3.1%, a significant improvement from the 1.7% decline in September. Import growth also exceeded expectations at 0.4%, although it was lower than the previous month’s 2.1%. Japan’s Nikkei 225 index dipped by 0.16%, while Hong Kong’s Hang Seng Index edged up by 0.24%. South Korea’s Kospi gained 0.42%, but the Kosdaq fell by 0.47%. Meanwhile, Australia’s S&P/ASX 200 dropped by 0.57%.

Economic Calendar

Earnings Calendar

Notable reports for Wednesday before the bell include BERY DY, GLBE, NIO, SR, TGT, TJX, & WIX. After the bell reports include CPA, JACK, MMS, NVDA, PANW, SNOW, & SQM.

News & Technicals’

The U.S. closed its embassy in Kyiv on Wednesday, citing specific intelligence about a potential significant air attack amid escalating tensions with Russia. In a statement, the U.S. Embassy announced the closure as a precautionary measure and advised embassy staff to shelter in place. Additionally, the embassy urged U.S. citizens to be ready to take immediate shelter if an air alert is issued.

Comcast is advancing with plans to spin off its cable network channels, according to sources cited by CNBC on Tuesday. The process is anticipated to take about a year, with an official announcement possibly coming as soon as Wednesday. This strategic move aims to provide cable networks with flexibility to merge with other networks or be sold to private equity. The decision comes as millions of customers shift from traditional pay TV bundles to streaming services. Over the next year, Comcast will determine necessary licensing agreements and decide if MSNBC and CNBC will continue their collaboration with NBC News.

U.S. Treasury yields rose on Wednesday as investors weighed the geopolitical tensions and recent economic data. The yield on the 10-year Treasury increased by nearly 5 basis points to 4.426%, while the 2-year Treasury yield climbed by over 2 basis points to 4.297%. The market’s focus was on the escalating conflict between Russia and Ukraine, which has intensified tensions between the U.S. and Russia. In response to the heightened threat, the U.S. closed its embassy in Kyiv, warning of a potential significant air attack.

Target reported disappointing third-quarter earnings and revenue, falling short of analysts’ estimates and prompting the company to lower its full-year guidance. Despite efforts to boost sales by cutting prices on thousands of items, Target struggled to attract customers. This underperformance stands in stark contrast to Walmart, which exceeded Wall Street expectations and raised its outlook just a day earlier.

Despite the dangerous geopolitical situation, the market continues with high anticipation of the crucial earnings from NVDA after the bell today.  Obviously, this report could set the sentiment of the market for the rest of the week so be prepared for a substantial Thursday morning gap. The question is will it be up or down?  Plan your risk carefully and while keeping in mind a significant air strike out of Russia could occur at any time escalating the conflict.

Trade Wisely,

Doug

Stock futures dipped early Tuesday, influenced by rising geopolitical tensions and investor anticipation of key earnings reports from major retailers and Nvidia. The market’s cautious sentiment followed a stark warning from Russian President Vladimir Putin, who indicated a lowered threshold for nuclear weapon use under Russia’s new doctrine. This doctrine suggests that Russia might resort to nuclear weapons if faced with conventional threats that jeopardize its sovereignty or territorial integrity. Amid these tensions, traders are particularly focused on Walmart’s upcoming earnings report, expected later on Tuesday, which could provide valuable insights into consumer health and spending trends.

European markets declined on Tuesday amid renewed concerns over Russia. Most sectors and major regional bourses saw pullbacks, with the automotive sector dropping 2.1%, while utility stocks edged up by 0.2%. Additionally, the final reading of the annual euro zone inflation showed an increase from September’s 1.7% to a higher rate. Core inflation, which excludes volatile items like food, energy, alcohol, and tobacco, was reported at 2.7%. These developments reflect the market’s cautious stance in response to geopolitical tensions and inflationary pressures.

Asia-Pacific markets experienced gains on Tuesday, buoyed by Tesla’s positive impact on Wall Street the previous night and investor analysis of Chinese financial policymakers’ remarks at an investment summit in Hong Kong. Australia’s S&P/ASX 200 saw a rise of 0.89%, Japan’s Nikkei 225 closed 0.51%, South Korea’s Kospi increased by 0.12%, Hong Kong’s Hang Seng Index advanced 0.40%, and the Topix climbed 0.68%. These movements reflect a cautiously optimistic market sentiment in the region.

Economic Calendar

Earnings Calendar

Notable reports for Tuesday before the bell include AS, ENR, J, LOW, MDT, OCSL, VIK, VIPS, WB, & WMT. After the bell reports include ALC, AZEK, DLB, GBDC, KEYS, LVB, POWL, VREX, & ZTO.

News & Technicals’

Stock futures dipped early Tuesday following a stark warning from Russian President Vladimir Putin to the United States. Putin’s statement, which lowered the threshold for a nuclear strike, came shortly after reports that the Biden administration had permitted Ukraine to launch American missiles deep into Russia. According to Russia’s new doctrine, a nuclear strike would be considered if Russia or its ally Belarus faced aggression involving conventional weapons that posed a critical threat to their sovereignty or territorial integrity. The doctrine also stated that any aggression against Russia or its allies by a non-nuclear state, supported by a nuclear state, would be viewed as a joint attack.

Lowe’s exceeded third-quarter earnings and revenue expectations on Tuesday and raised its outlook, although it still anticipates a decline in full-year sales compared to the previous year. Meanwhile, its competitor Home Depot has observed that customers are postponing major projects despite the Federal Reserve’s interest rate cuts. In August, Home Depot also lowered its full-year forecast, citing anticipated weak demand for home improvement in the latter half of the year due to high interest rates. These trends highlight the ongoing challenges in the home improvement sector amid fluctuating economic conditions.

Super Micro announced on Monday that it has appointed BDO as its independent auditor. Following this news, the company’s stock, which had significantly declined since its peak in March, surged by 37% in extended trading, continuing its upward momentum from earlier in the day. Additionally, Super Micro confirmed that it will remain listed on Nasdaq, subject to the exchange’s review of its compliance plan. This development marks a positive turn for the company amid its recent challenges.

Investors are trying to focus on the WMT earnings this morning but rising geopolitical tensions and the threat on nuclear weapons use by Russia is obviously tempering bullish spirits.  Of course, the highly anticipated NVDA earnings on Wednesday could quickly tip the scales of market sentiment the bulls or the bears depending on the results.  That said, plan your risk carefully to avoid overtrading due to the likely volatile price action these news events may create.

Trade Wisely,

Doug

Stock futures showed mixed results on Monday as Wall Street braced for a week of major earnings reports, following a challenging period for the three main benchmarks. Investor concerns about the trajectory of interest rates remain high, especially after Federal Reserve Chair Jerome Powell indicated on Thursday that the central bank is not in a rush to cut rates due to the economy’s robust growth and strong labor market. Currently, most investors are anticipating a year-end overnight lending rate between 4.25% and 4.50%. This week’s key market driver will be Nvidia’s earnings report, scheduled for release on Wednesday.

European markets experienced a downturn on Monday as investors shifted their focus to upcoming regional inflation data. The European Stoxx 600 index fell by 0.22%, with most major regional bourses and sectors seeing declines. Retail stocks were the hardest hit, dropping by 0.73%, while food and beverage stocks managed a modest gain of 0.29%. This week, market participants are keenly awaiting several significant data releases, including the latest U.K. inflation figures on Wednesday and the final reading of the euro zone consumer price index. Additionally, a series of purchasing managers’ index reports from various regions are scheduled for Friday.

Asia-Pacific stocks showed a mixed performance on Monday, reflecting a cautious market sentiment ahead of key economic data releases this week. In China, the loan prime rate (LPR) announcement on Wednesday is anticipated to remain unchanged, with the one-year rate at 3.1% and the five-year rate at 3.6%, according to ING. Japan is set to release its trade data on Wednesday, followed by October’s headline inflation figures on Friday, which will provide insights into the country’s economic health. Additionally, the Reserve Bank of Australia will publish the minutes from its recent meeting on Tuesday, offering further clues on the central bank’s policy direction.

Economic Calendar

Earnings Calendar

Notable reports for Monday before the bell include BRC, & TWST. After the bell reports include ACM, BRBR, & SYM.

News & Technicals’

Tencent Cloud is strategically utilizing the WeChat ecosystem to differentiate itself from other cloud service providers, according to CEO Dowson Tong. He noted that numerous Tencent clients are eager to develop their own mini programs within WeChat’s network to draw in the app’s extensive user base. This unique integration with WeChat, Tong emphasized, sets Tencent Cloud apart from many other online platforms. Meanwhile, the cloud service market is dominated by Microsoft Azure, Amazon Web Services, and Google Cloud Platform, which collectively hold 68% of the market share.

Tesla shares surged on Monday after reports emerged that President-elect Donald Trump’s transition team plans to prioritize creating a federal framework for regulating self-driving vehicles within the U.S. Transport Department. Elon Musk, a prominent advocate for Trump’s return to the White House during the recent elections, has been appointed by Trump, along with former Republican presidential candidate Vivek Ramaswamy, to head the newly established Department of Government Efficiency. This development has bolstered investor confidence in Tesla, reflecting optimism about the future regulatory environment for autonomous vehicles.

The boxing match between Jake Paul and Mike Tyson made history, with Netflix reporting that 60 million households tuned in, reaching a peak of 65 million concurrent streams. According to Most Valuable Promotions, gate receipts for the event exceeded $18 million, marking the highest revenue for a fight held outside of Las Vegas. This record-breaking event highlights the immense popularity and commercial success of the bout.

Spirit Airlines’ CEO reassured customers that they can continue booking tickets despite the company’s recent challenges. Following a failed acquisition attempt by JetBlue Airways, a significant engine recall by Pratt & Whitney, and weaker-than-expected sales, Spirit has been grappling with mounting losses. Additionally, the airline is under pressure to renegotiate $1.1 billion in debt payments due next year. Despite these hurdles, the CEO’s statement aims to maintain customer confidence and stability in the airline’s operations.

Although the earnings season is winding down, we still have some major earnings reports this week that could determine if the bulls can hold on to the upper hand or if the bears find an opening to attack.  Tuesday, we get WMT and but the most anticipated will be the report from NVDA on Wednesday.  This report could shake the market out of the postelection hangover we experienced last week.  On the other hand if the report disappoints the bears could push to fill the index gaps below. 

Trade Wisely,

Doug

U.S. stock futures saw a slight increase as investors aimed to regain momentum that had previously driven major averages to record highs. Market participants are currently debating whether this upward trend has further potential. Key economic indicators are on the horizon, with the October producer price index set for release on Thursday and the retail sales report due on Friday. Additionally, Fed Chair Jerome Powell is scheduled to speak in Dallas, Texas, which could provide further insights into the economic outlook.

European stocks traded higher as investors assessed the latest U.S. inflation data. Despite the overall positive movement, most sectors experienced a pullback, with tech stocks falling by 1.2%. In contrast, oil and gas stocks saw a gain of 1.3%. The markets are currently focused on reversing recent declines, with significant attention on upcoming data releases and corporate earnings reports.

Asia-Pacific markets experienced a general downturn, with Hong Kong’s Hang Seng index leading the losses, dropping by over 2% by the final hour of trading. This decline extended a multi-day losing streak, resulting in a 4% loss for the week as of Wednesday’s close. Mainland China’s CSI 300 also saw a significant drop of 1.73%, while Japan’s Nikkei 225 fell by 0.48%. In contrast, Australia’s S&P/ASX 200 emerged as a rare bright spot, gaining 0.37%. South Korea’s Kospi ended nearly flat with a marginal gain, whereas the Kosdaq Index declined by 1.17%.

Economic Calendar

Earnings Calendar

Notable reports for Thursday before the bell include AAP, BILI, DIS, JD, NTES, NICE, NOMD, SBH, TLN, & ZK.

After the bell reports include AMAT, ESE, GLOB, MITK, & POST.

News & Technicals’

Disney reported its fiscal fourth-quarter earnings on Thursday, narrowly surpassing analyst estimates, driven by growth in its streaming services which bolstered the entertainment segment. The company reported adjusted earnings per share of $1.14, slightly above the expected $1.10. Revenue also exceeded expectations, coming in at $22.57 billion compared to the anticipated $22.45 billion. Net income rose to $460 million, or 25 cents per share, up from $264 million, or 14 cents per share, in the same quarter last year. However, revenue for Disney’s sports segment, primarily ESPN, remained flat, with ESPN’s profit declining by 6%.

Cisco’s latest quarterly results exceeded expectations, leading the company to raise its full-year revenue target. Despite this positive development, revenue for the quarter ended October 26 dropped by 6% to $14.7 billion compared to the previous year. Net income also declined, falling to $2.71 billion, or 68 cents per share, from $3.64 billion, or 89 cents per share, in the same quarter last year. Additionally, networking revenue saw a significant decrease of 23%, reaching $6.75 billion, which was slightly below the $6.8 billion consensus estimate by analysts surveyed by StreetAccount.

On Thursday, Treasury yields remained relatively stable as investors kept a close watch on new economic data and a series of speeches from Federal Reserve policymakers. The 10-year Treasury yield edged slightly lower to 4.449%, while the 2-year Treasury yield also dipped to 4.282%. Federal Reserve Chair Jerome Powell is set to discuss the U.S. economic outlook in Dallas, Texas, later in the day. Additionally, remarks from Fed Governor Adriana Kugler, Richmond Fed President Tom Barkin, and New York Fed President John Williams are anticipated, which could provide further insights into the economic landscape.

The bulls still want to celebrate the election working to regain momentum this morning.  However, we still have a pending PPI report with a consensus estimate that suggests higher producer costs.  Should the number come in hot, expect the bond yields and the dollar continue to gain strength.  In that event watch for the possibility of a whipsaw.  On the other hand if the number weakens expect the bullish celebration to continue with more record highs into the end of the week.

Trade Wisely,

Doug

U.S. stock futures were down as investors eagerly awaited the latest consumer price index data for clues on inflation trends. The major indices had already declined during Tuesday’s session, with the market taking a pause. According to Tom Hainlin, senior investment strategist at U.S. Bank Wealth Management, part of Tuesday’s market dip was due to profit-taking following strong post-election gains, while some of it was likely due to positioning ahead of the upcoming inflation and retail sales reports. This cautious sentiment reflects the market’s sensitivity to economic indicators and their potential impact on future monetary policy.

European stocks remained relatively flat, with notable movements in specific stocks. Just Eat Takeaway saw its shares surge by 20% following the announcement of a deal to sell its U.S. unit, Grubhub, to Wonder for $650 million. Siemens Energy also performed exceptionally well, with its shares skyrocketing by 19.1%. In contrast, ABN Amro’s shares fell by 1% after the Dutch bank reported a 9% decline in quarterly net profit. These mixed performances highlighted the varied responses of investors to corporate news and earnings reports.

Asia-Pacific stock markets experienced a general decline as traders evaluated Japan’s latest corporate goods data. The data revealed that year-on-year producer price growth, or wholesale inflation, in October surged to 3.4%, marking the highest rate since July of the previous year. This economic indicator contributed to a downturn in major indices across the region. Japan’s Nikkei 225 fell by 1.66%, South Korea’s Kospi dropped 2.64%, Australia’s S&P/ASX 200 decreased by 0.75%, and Hong Kong’s Hang Seng Index was down 0.45%. The overall market sentiment was cautious as investors digested the implications of rising inflation on future economic performance.

Economic Calendar

Earnings Calendar

Notable reports for Thursday before the bell include AFGC, ARCO, CGON, CURB, CYBR, DOLE, ENLT, GFF, INBX, JHX, LOAR, PSFE, RSKD, SSYS, TSEM, & UBS.

After the bell reports include BZH, BV, CSCO, DGII, DLO, HP, HI, IBTA, JJSF, KLIC, NVEI, PACS, SONO, & TTEK.

News & Technicals’

DirecTV’s proposed acquisition of Dish assets appears to be off the table after bondholders rejected a revised offer. The deal, which involved DirecTV acquiring Dish’s pay TV business for a nominal $1 and assuming approximately $10 billion in debt, now seems unlikely to proceed. There remains a slim chance of revival if Dish Chairman Charlie Ergen decides to negotiate, but this currently seems improbable. The rejection by bondholders underscores the challenges and complexities involved in such high-stakes corporate transactions.

Microsoft’s president and vice-chairman cautioned that the West should not underestimate China’s advancements in technology. Microsoft has maintained a presence in China since 1992, operating its largest research and development center outside the U.S. Recently, Huawei surprised the market by releasing a smartphone with download speeds indicative of 5G capabilities, despite U.S. tech sanctions. This development has fueled speculation about a significant chip breakthrough by Huawei, highlighting China’s potential to innovate and compete on the global tech stage.

Shares of Amgen declined as analysts scrutinized bone density loss data from an early-stage trial of its experimental weight loss injection, MariTide. While some analysts viewed the new data as a potential safety concern, others argued that the market reaction was exaggerated and emphasized the need for more data from a larger patient group. MariTide is a promising contender in the weight loss drug market, offering a monthly injection alternative to the weekly injections currently available from Novo Nordisk and Eli Lilly. This development highlights the ongoing competition and innovation within the weight loss pharmaceutical sector.

Investors are eagerly anticipating the release of October’s Consumer Price Index (CPI) numbers on Wednesday morning to gauge the rise in the costs of goods and services. Economists surveyed by Dow Jones predict a 0.2% increase for the month and a 2.6% year-over-year rise. The rate of price increases is crucial for the Federal Reserve’s decisions on whether to adjust interest rates. Additionally, this week’s economic calendar includes the producer price index data on Thursday and retail sales figures on Friday, both of which will provide further insights into the economic landscape.

Market sentiment and today’s price action will all be determined by the result of the Consumer Price Index report.  If the number comes in weak, I suspect the market will continue its post-election celebration.  However, should the number come in hot the profit taking that began yesterday could quickly accelerate, filling some gaps and testing areas of price support in the index charts. Keep in mind what ever happens we will quickly turn out attention toward Jobless Claims and the PPI numbers on Thursday.

Trade Wisely,

Doug

Futures remained relatively stable after stocks closed at record highs on Tuesday, with only slight declines as Wall Street continued to evaluate which sectors to invest in amid a post-election rally that has propelled equities to unprecedented levels. Investors are keenly awaiting economic data on small businesses, set to be released in the morning. Additionally, they will be closely monitoring remarks from Federal Reserve officials, including Fed Governor Christopher Waller and Minneapolis Fed President Neel Kashkari, throughout the day. Traders are also poised to analyze earnings reports from major companies like Home Depot and Shopify, which are expected to be released on Tuesday.

European markets saw a decline, primarily driven by a significant drop in mining stocks, which fell by 2.6%. In contrast, technology stocks managed a modest gain of 0.5%. Germany reported a 2.4% rise in inflation for October, as confirmed by the latest data from the country’s statistics office. Among the major indices, France’s CAC 40 slipped by 1.2%, while Britain’s FTSE 100 and Germany’s DAX fell by 0.9% and 0.8%, respectively.

Asia-Pacific markets experienced a downturn as investors adopted a cautious stance. Hong Kong’s Hang Seng index led the declines with a significant drop of 2.76%, followed by South Korea’s Kospi, which fell by 1.94%. China’s CSI 300 also saw a decrease of 1.1%, while Japan’s Nikkei 225 slipped by 0.4%. Australia’s S&P/ASX 200 had a relatively minor decline, closing 0.13% lower.

Economic Calendar

Earnings Calendar

Notable reports for Thursday before the bell include ALIT, ALMS, AZN, AVDL, CAMT, DAVA, EVGO, FA, GENI, HD, HTZ, HBM, HUYA, IAC, LEGN, LYV, MIRM, MOS, NMRA, NWN, NVAX, ONON, PTVE, PGY, PLL, PLUG, RGEN, ROIV, SRRK, SDGR, SE, FOUR, SHLS, SDHC, SPHR, SWTX, SHO, SGRY, SLVM, TH, TME, THS, TGI, TSN.

After the bell reports include DOX, AHR, AZTA, CAE, CNNE, CAVA, CHGG, CRNX, DHT, EVCM, GRAB, HPP, ICUI, CART, IAS, LNW, MARA, NTRA, NATL, NPCE, OXY, OUT, FNA, PAY, PRDO, PGNY, PRTA, PUBM, RXT, RPAY, RKLB, SDRL, SWKS, SOUN, SPOT, SU, TTGT, MODG, XENE, & ZI.

News & Technicals’

Home Depot reported quarterly earnings and revenue that surpassed analysts’ expectations, driven by increased sales from its acquisition of SRS Distribution, as well as a surge in demand for hurricane-related repairs and the impact of warmer-than-usual weather across much of the U.S. Despite these positive factors, the company noted that consumers are exercising caution following a period of elevated interest and mortgage rates.

On Tuesday, a Dutch court dismissed a landmark climate ruling against Shell, which had previously mandated the oil giant to significantly cut its global carbon emissions. This decision overturns the May 2021 ruling by The Hague district court that required Shell to reduce its greenhouse gas emissions by 45% from 2019 levels by 2030. The outcome represents a significant development in a precedent-setting case with potential far-reaching implications for future climate litigation.

U.S. Treasury yields saw a notable increase, with the 10-year Treasury yield rising by over four basis points to 4.3550%. The 2-year Treasury yield, which is particularly sensitive to interest rate expectations, climbed by more than six basis points to 4.3149%. Investors are also closely watching key economic data set to be released throughout the week, including the NFIB Business Optimism Index on Tuesday, which will provide insights into the performance of small businesses in October.

Germany is preparing for a federal election in February, earlier than initially proposed by Chancellor Olaf Scholz, following the collapse of his ruling coalition last week. A confidence vote is now scheduled for December 16, a crucial step before the early elections can proceed. This parliamentary vote is necessary for the chancellor to formally call for the election. According to sources within Scholz’s Social Democratic Party (SPD), the federal election is set to take place on February 23.

The record highs continued Monday though we did see a little weakness, beginning to show up by the close of the day.  With another light day on the economic calendar traders will look for inspiration in earnings reports.  Bond yields continue to be problematic as markets grapple with the pending CPI and PPI reports as well as the changes the new administration will deliver.  If some profit taking does begin be prepared for the possibility of some big point moves.

Trade Wisely,

Doug

Stock futures rose on Monday as Wall Street aimed to extend last week’s impressive rally to new record highs. This follows a remarkable week for U.S. stocks, with the Dow, S&P 500, and Nasdaq all closing at all-time highs. The Dow and S&P 500 had their strongest weeks in about a year, with the Dow briefly surpassing 44,000 for the first time. While no significant economic data is expected on Monday, investors are eagerly anticipating inflation reports due later in the week. Additionally, companies like Live Nation, the parent of Ticketmaster, and Aramark, a food and facility service provider, are set to report their earnings on Monday.

European stocks opened the week on a positive note, with the pan-European Stoxx 600 index trading higher on Monday. This uptick comes as investors brace for a busy week filled with key economic data releases, including inflation figures from Germany and the U.S., as well as GDP data from the U.K. Leading the gains were construction and materials stocks, which rose by over 1.8%. Despite this positive start, it’s worth noting that the benchmark index recorded its third consecutive weekly loss by the end of last week, reflecting ongoing market volatility.

Asia-Pacific markets experienced a downturn on Monday following China’s latest stimulus measures, which failed to meet expectations and raised concerns about the recovery of the world’s second-largest economy. Japan’s benchmark Nikkei 225 showed a slight increase, closing at 39,533.32, while the broader Topix index dipped by 0.09% to 2,739.68. In contrast, Hong Kong’s Hang Seng index saw a significant decline of 1.62%, South Korea’s Kospi dropped by 1.15%, and Australia’s S&P/ASX 200 fell by 0.43%. This mixed performance highlights the ongoing uncertainty in the region’s markets.

Economic Calendar

Earnings Calendar

Notable reports for Thursday before the bell include ARMK, & MNDY. After the bell reports include AROC, AGO, JRVR. KYTX, LAZR, NVRO, TALO, & ZETA.

News & Technicals’

In a recent filing with a Delaware court, FTX highlighted a 2021 transaction where Binance, along with its CEO Changpeng Zhao and others, divested their investment in FTX. This involved selling a 20% stake in FTX and an 18.4% stake in its U.S.-based entity, West Realm Shires, back to the company. This litigation represents the latest escalation in the ongoing tensions between two of the largest players in the cryptocurrency market, following the dramatic collapse of FTX that sent shockwaves through the industry.

In a research note last week, Citi strategists pointed out that cryptocurrency remains one of the “few Trump trades that has yet to retrace.” During his campaign, President-elect Donald Trump made numerous promises to the crypto industry, including a bold pledge to make the U.S. the “crypto capital of the planet.” Looking forward, some analysts are optimistic about the continued rise of cryptocurrencies, with several predicting that bitcoin could reach the $100,000 milestone by the end of the year.

Last month, policymakers introduced new subsidies and tax breaks aimed at supporting households with children under the age of three. However, analysts have pointed out that these measures primarily benefit existing families rather than incentivizing the formation of new ones. Additionally, the success of these policies heavily depends on the capacity of local governments to effectively implement them. This comes at a time when the United Nations has projected a significant demographic shift for China, predicting that the country, currently the second most populous in the world, could see its population decline by more than half by 2100, marking the steepest drop of any nation.

Thought the impressive rally continues this morning with another gap up open keep in mind that the banks and bond markets are closed today so choppy conditions would not be a surprise after the open.  The IWM is the only index not at record highs and there appears to be concerted efforts to push toward that goal this morning.  That said, the parabolic nature of the current rally also warrants a bit of caution not to case already extended stocks and be watching for a profit-taking pullback that could begin at any time.

Trade Wisely,

Doug

Following a significant market rally spurred by the decisive presidential election, stock futures saw a slight gain. Bitcoin, the U.S. dollar, and bank stocks all surged in Wednesday’s post-election trading. Conversely, several international funds and solar stocks faced declines as investors anticipated negative impacts from the President-elect’s policies. On Thursday, market participants are keenly awaiting the Federal Reserve’s interest rate decision and Chair Jerome Powell’s press conference. Additionally, quarterly earnings reports are expected from Moderna and Warner Bros. Discovery before the market opens, with Block, Pinterest, and Rivian set to report in the afternoon.

European markets saw an uptick on Thursday morning, buoyed by investor anticipation of rate cuts from both the U.S. Federal Reserve and the Bank of England. The trading session was marked by a flurry of earnings reports from major European companies. Among the notable movements, Adyen’s shares plummeted by 10%, making it the day’s worst performer. In contrast, GN Store Nord, a Danish manufacturer, emerged as the top performer, with its shares surging over 10% following the release of its latest financial results.

Asia-Pacific markets experienced a mixed trading session on Thursday, with most indices showing gains despite some volatility. The yen, which had weakened to an intraday low of 154.7 against the dollar on Wednesday, reached its weakest point since July 30, rebounding slightly to 153.81 on Thursday. Leading the gains in the region, China’s CSI 300 index surged by 3.02%, while Japan’s Nikkei 225 was the only major index to close in the red, falling by 0.43%. In other news, Chinese state media reported that the National People’s Congress Standing Committee had reviewed a plan to increase local government debt, following initial discussions earlier in the week.

Economic Calendar

Earnings Calendar

Notable reports for Thursday before the bell include ACIW, ACMR, GOLF, APD, AGI, AQN, ALMS, COLD, APPN, MT, ATS, BCE, BDX, BSY, BRY, BIGC, CCJ, GOOS, CG, CARS, CEVA, CGON, YOU, CCOI, COMM, DDOG, XRAY, DNOW, DCO, DUK, DT, EPC, EDR, EPAM, EVRG, RACE, AG, FWRG, GERN, GDRX, HAE, HAIN, HAL, HBI, HSY, HGV, INBX, IBP, INSW, ORWD, KELYA, KVUE, KRP, DNUT, CLII, LFST, LGND, LSPD, MTSI, MFC, MRX, MDU, MPW, MRNA, TAP, ML, MUR, NABL, VYX, NXST, NVMI, OLPX, OSCR, PZZA, PENN, PCG, PLNT, PBH, PRMW, PRVA, RL, ROK, RXO, SCSC, SEE, STGW, SHOO, STRA, TBLA, TPR, TRP, TGLS, TGNA, TU, TPX, THR, THRY, TDG, TPB, UAA, PRKS, USFD, VCEL, VTRS, VITL, WD, WRBY, WBD, KLG, WWW, XPEL, & YETI.

After the bell reports include DKNG, ATEN, AAON, ACVA, ADPT, ADMA, AFRM, AGL, AL, ABNB, AKAM, ALRM, ALLO, AMRC, AMN, AMPL, AAOI, ALTM, ANET, ARLO, ARRY, ASTH, AVPT, AXON, BILL, BLNK, SQ, BE, BHF, CABO, CPRG, CPK, CIVI, CLFD, NET, COLL, CPAY, CYRX, DH, DRH, DIOD, DOCS, DBX, DXC, ENV, EOG, ESTA, EVH, EXPI, EXPE, FIGS, FIVN, FLYW, FTNT, FNKO, G, GETY, SPRO, GDOT, HRB, INDI, INGN, PODD, JAMF, FROG, KTOS, KURA, LGF.A, LITE, MGNI, MRVI, MLNK, MTUS, MTD, MNST, MSI, MP, MYGN, NWSA, LASR, NUS, NVEE, OLO, OS, LPRO, OPEN, OPK, OEC, OVV, PACB, PEB, PINS, PBI, PRA, PTCT, QDEL, RRR, RDFN, REZI, RNG, RIVN, RXST, SVV, SOLV, SPT, STEP, RUN, SG, SYNA, TEM, TTD, TOST, U, UPST, VCTR, WTI, WEST, WPM, XPOF, & ZD.

News & Technicals’

Moderna reported a surprising profit for the third quarter on Thursday, significantly exceeding Wall Street expectations. This positive outcome was driven by effective cost-cutting measures and higher-than-anticipated sales of its Covid vaccine. The company highlighted that its latest Covid vaccine benefited from receiving U.S. approval three weeks earlier than the previous version did in 2023. Additionally, this quarter marked the first time sales of Moderna’s vaccine against respiratory syncytial virus (RSV) were included, representing the company’s second commercially available product.

As the Federal Reserve concludes its meeting on Thursday, it is expected to implement another interest rate cut. Market participants will be keenly focused on Chair Jerome Powell’s remarks regarding future monetary policy directions. Historically, Fed policymakers have aimed to remain apolitical, so Powell is likely to steer clear of making direct comments about the anticipated policies of President-elect Donald Trump. Instead, his focus will likely be on the economic outlook and the Fed’s strategy moving forward.

Qualcomm announced impressive fourth-quarter earnings on Wednesday, surpassing Wall Street’s expectations for both earnings and revenue. The company also provided a strong outlook for the December quarter, which contributed to a surge in its stock during extended trading. Additionally, Qualcomm’s board approved a substantial $15 billion in additional share repurchases, signaling confidence in the company’s future performance and commitment to returning value to shareholders.

After yesterday’s significant market rally the question will be follow-through?  We have a big day of earnings and economic reports including a trade decision from the FOMC.  Though premarket activity suggests another gap up open be watchful for any clues of profit taking that could pull the market back with big point moves.  That said, it is also possible that the election celebration continues through the end of the week so just be prepared to protect your profits. 

Trade Wisely,

Doug

Following Donald Trump’s victory in the 2024 presidential election, stocks are set for a significant rally on Wednesday. Bitcoin surged to an all-time high of $75,000, likely to benefit from expectations of relaxed regulations. The dollar index reached its highest level since July, and the 10-year Treasury yield rose to approximately 4.43%. Bank shares experienced a notable boost, with JPMorgan, Bank of America, and Wells Fargo, each jumping by at least 6%. Additionally, futures for the small-cap benchmark Russell 2000 increased by 6%.

European stocks continued their upward trajectory, with the pan-European Stoxx 600 rising by 1.2%. This broad-based increase saw most regional bourses and sectors gaining, with media stocks leading the charge by adding 2.6%. However, the automotive sector faced challenges, declining by 2%. Among individual companies, Commerzbank reported a 6.2% drop in net profit to 642 million euros for the third quarter, attributed to a broader decline in net interest income and increased risk provisions.

Asia-Pacific markets presented a mixed performance. Japan’s Nikkei 225 led the gains, surging by 2.61%, buoyed by the Bank of Japan’s September monetary policy meeting minutes, which revealed a consensus among members to raise rates. Conversely, South Korea’s Kospi fell by 0.52%, and Hong Kong’s Hang Seng index dropped significantly by 2.5%. Australia’s S&P/ASX 200 also saw a decline, closing 0.83%. Meanwhile, investors are closely monitoring the ongoing five-day meeting of China’s National People’s Congress for potential announcements on additional economic stimulus measures.

Economic Calendar

Earnings Calendar

Notable reports for Friday before the bell include AEP, FOLD, ASC, ASTE, ATHM, AVDX, AAVA, BCO, BIP, CLBT, CELH, COR, CTRI, GIB, CRL, CLVT, CNDT, CURB, CVS, DK, DIN, ENLT, ENVO, HLNE, HWM, IONS, IRM, JCI, JLL, KMT, KRNT, LNTH, LINE, LXP, MAC, MKTX, MCFT, EYE, ODP, OC, PFGC, PERI, PRGO, PNW, SNDR, SMG, SRE, SFL, SHOP, SMRT, SWX, STWD, SUN, SGHC, TEVA, TRMB, VERX, & VSH.

After the bell reports include ARM, ACAD, ADTN, ALB, AMC, AWR, ANSS, APA, RUCS, ASH, ASPN, ATO, BTG, BALY, BBDC, BBSI, BYND, BKH, BMBL, CDRE, CDLX, CERT, CHRD, CLNE, CWAN, CDE, COHR, CXW, CRSR, CTVA, COTY, CXT, CCRN, LAW, CSGS, CYTK, CLX, APPS, DV, DUOL, BROX, ELF, ECPG, ET, ENS, ENLC, EQX, EVTC, EOLS, FICO, FSLY, FNF, FBIN, GNK, GFL, GILD, LOPE, GH, HCAT, HL, HST, HUBS, IIPR, IONQ, JXN, JAZZ, HOBY, KNTK, KVYO, KGS, KD, LB, LZ, RAMP, LYFT, MRO, VAC, MTCH, MCK, MELI, HEOH, MKSI, MODV, MWA, NFG, NMIH, NTR, OSUR, ORA, PCRX, PYCR, PR, PLYA, POWA, POWI, PRI, PTC, QTWO, QGEN, QCOM, RDN, DPD, RYN, PLSY, RNR, RVMD, RLJ, RGLD, SRPT, SBGI, SITM, STR, SEDG, STE, SUI, TTWO, TNDM, SKT, TS, TKO, COOK, TRIP, TPC, UPWK, VECO, VCYT, VSTO, VTLE, WAY, WES, WMB, WOLF, WK, XHR, ZG, & ZIP.

News & Technicals’

CVS Health reported mixed results for the third quarter, with higher medical costs impacting its profitability. The company anticipates that these elevated costs will continue to pressure its performance throughout the year, leading them to withhold a formal outlook at this time. This earnings report marks the first under the leadership of CEO David Joyner. Additionally, CVS announced the appointment of Steve Nelson, former CEO of UnitedHealth Group, as the new president of its health insurer, Aetna, effective immediately.

Super Micro, the embattled server maker, reported a sharp 17% decline in its preliminary first-quarter results on Tuesday. The company is grappling with several corporate governance challenges, including the recent resignation of its auditor. Despite these issues, the board of directors stated that there was no evidence of fraud or misconduct by management. This statement comes as the company seeks to reassure stakeholders amid ongoing scrutiny.

Solar stocks are experiencing a sell-off as clean energy investors react to the news of Donald Trump’s upcoming second term as President. Concerns are mounting among traders that Trump might repeal the Inflation Reduction Act if Republicans gain unified control of the government. This uncertainty has led to a significant drop in the Invesco Solar ETF, which was down by 7% in premarket trading.

The world’s largest automaker by sales volume reported a 20% year-on-year decline in operating profit. Despite this drop, the company upheld its full-year operating profit forecast of 4.3 trillion yen. In a positive move for shareholders, Toyota increased its full-year dividend forecast to 90 yen, up from 75 yen the previous year.

Although the stocks are set for a significant rally, I would be very cautious about rushing in chasing the exuberant moves.  The T2122 indictor will likely show a very overbought condition first thing this morning so watch for the possibility of some profit taking or a substantial whipsaw.  Soon markets will remember we have and pending FOMC decision Thursday afternoon and choppy price action could resume. The dollar and bond yields are zooming higher in speculation of policy changes so be very careful with commodities.

Trade Wisely,

Doug