S&P futures rose 0.3% in Monday morning trading after U.S. equities rallied last week, with the Russell 2000 up over 8.5% for its best week since March 2020. The S&P 500 and Nasdaq hit new all-time highs, led by small caps, momentum stocks, regional banks, bitcoin, and software, while big tech also performed well. Laggards included GLP-1s, renewables, China tech, and defensive stocks. Overnight, Asian markets were mixed, with Hong Kong down nearly 1.5% and Japan slightly up. European markets were stronger, rising around 1%. The dollar index increased by 0.3%, gold fell 0.6%, Bitcoin futures surged 6.8%, and WTI crude dropped 1.5%.
The market remains bullish post-election, driven by unwinding of election hedges, VIX normalization, FOMO, favorable seasonality, buybacks, and cyclical rotations. Concerns persist that tariffs and immigration policies may overshadow expected deregulation and tax cuts in a potential Trump administration, potentially impacting Fed easing.
No major events are scheduled for today due to the Veteran’s Day holiday. The week includes key data releases: NFIB small business sentiment and the Fed’s Senior Loan Officer Survey on Tuesday, October CPI on Wednesday, PPI on Thursday, and retail sales and manufacturing data on Friday. Core CPI for October is expected to rise 0.3% m/m, keeping the y/y rate steady at 3.3%. Powell’s remarks on Thursday and the FOMC Financial Stability report on Friday are also in focus.
Only 12 S&P 500 companies are set to report earnings this week, including HD, SPOT, OXY, CSCO, DIS, and AMAT. With over 90% of companies having reported Q3 results, the blended growth rate is at 5.3%, 100 basis points above initial expectations. About 75% of companies have beaten EPS estimates, slightly below the one-year average of 78%
U.S. equities closed higher on Friday, with the Dow up 0.59%, S&P 500 rising 0.38%, Nasdaq gaining 0.09%, and the Russell 2000 up 0.71%. The Nasdaq and S&P reached new all-time highs as major indices secured strong weekly gains. Outperforming sectors included airlines, trucking, aerospace and defense, regional banks, insurance, homebuilders, and hospitality. Big tech had mixed performance, with TSLA notable for its gains. Semiconductors, energy, metals, chemicals, pharmaceuticals, and China tech were among the laggards. Treasuries were mixed, with the curve flattening as the 10-year yield approached pre-election levels near 4.30%. The dollar index rose 0.4%, gold fell 0.4%, Bitcoin was little changed, and WTI crude and copper both fell sharply, down 2.7% and 2.8% respectively.
China detailed a $1.4 trillion local government debt swap program, which exceeded expectations but was seen as focused more on stabilization than stimulus. U.S. market sentiment remained supported by the unwinding of election-related hedges, a decline in the VIX, favorable seasonality, resumed buybacks, and expectations of deregulation and tax cuts. Rate stabilization post-election also provided support, though concerns about potential tariffs impacting growth and inflation persist.
The preliminary University of Michigan consumer sentiment beat expectations, reaching its highest in six months, while one-year inflation expectations dipped slightly to 2.6%, the lowest since December 2020. Next week, markets will observe the Veteran’s Day holiday on Monday, followed by key economic data releases including October CPI on Wednesday and PPI on Thursday. Retail sales, Empire manufacturing, and industrial production are due Friday, alongside significant Fedspeak throughout the week, with Powell’s remarks on Thursday being a highlight.
GICS Sector Summary:
Information Technology
- Upstart Holdings (UPST): Soared 46.0% after a Q3 earnings and revenue beat, positive EBITDA surprise, and strong Q4 guidance. Piper Sandler upgraded the stock to overweight due to better lending dynamics and a favorable rate environment.
- Arista Networks (ANET): Fell 7.1% despite Q3 results exceeding key metrics; Q4 revenue guidance was above expectations, but operating margin and 2025 growth outlook disappointed.
- Cloudflare (NET): Declined 4.6% after a Q3 beat; Q4 revenue guidance and FY24 revenue outlook fell short amid execution challenges and delays in larger U.S. deals.
- Fortinet (FTNT): Rose 10.0% after Q3 earnings and revenue beat, driven by new customer growth, although some concerns were noted on Q4 billings guidance.
Consumer Discretionary
- Toast, Inc. (TOST): Gained 14.7% after a Q3 beat and improved guidance, citing strong momentum in new locations and ARR-to-revenue conversion.
- Capri Holdings (CPRI): Dropped 6.7% after missing Q2 EPS and revenue estimates, with the CEO noting global demand softness in luxury fashion.
- Expedia Group (EXPE): Gained 3.8% after a Q3 EBITDA beat despite a revenue miss; raised full-year guidance for GBV and EBITDA margin.
- Bloomin’ Brands (BLMN): Fell 9.7% following Q3 results that met expectations but had light operating margins. The company cut its FY EPS and comp guidance, citing lower restaurant sales.
- Rivian (RIVN): Declined after a Q3 miss but maintained its FY guidance.
- Sweetgreen (SG): Declined 6.0% after in-line Q3 results and a slight guidance raise; stock downgraded by Goldman Sachs on valuation concerns.
Health Care
- Doximity (DOCS): Jumped 34.2% following a strong Q2 earnings and revenue beat, with guidance raised for next quarter and FY25.
- Insulet (PODD): Increased 9.4% with a Q3 EPS and revenue beat, driven by international and U.S. Omnipod performance; Q4 outlook was stronger than expected.
- Evolent Health (EVH): Plunged 45.6% after a Q3 EPS miss and revenue shortfall, citing higher costs in its Specialty Performance Suite and cutting FY24 guidance.
Industrials
- Fluor (FLR): Fell 13.6% on a Q3 EBITDA miss and a cut to FY guidance, noting project delays and cancellations.
- CNH Industrial (CNH): Dropped 8.3% after missing Q3 revenue and EPS expectations, with the company cutting FY guidance due to agricultural market weakness.
Communication Services
- Pinterest (PINS): Declined 14.0% despite a Q3 revenue beat, as Q4 guidance came in below expectations due to pressures in the food and beverage sector.
Financials
- Affirm Holdings (AFRM): Down 4.7% despite beating Q1 revenue, operating income, and net income estimates; analysts noted high expectations into print.
Consumer Staples
- Monster Beverage (MNST): Dropped on missing Q3 expectations, noting a slowdown in the energy drink growth rate.
Eco Data Releases | Monday November 11th, 2024
No Economic Data Releases Today
S&P 500 Constituent Earnings Announcements | Monday November 11th, 2024
Data sourced from FactSet Research Systems Inc.
