S&P futures are down 0.5% in Friday morning trading, following a lower close for U.S. equities on Thursday. Small-caps, pharma, biotech, and EVs lagged, while entertainment, semiconductors, airlines, builders, and dollar stores outperformed. Treasuries are firmer, though yields remain higher for the week. The Dollar index is down 0.2% but up 1.5% for the week. Gold is steady, Bitcoin futures rose 1.5%, and WTI crude fell 1%.
The market’s defensive tone is attributed to stretched valuations after last week’s rally, higher bond yields, and lingering uncertainty around Trump policies, including deficits and tariffs. Bulls remain optimistic on seasonality, buybacks, FOMO, and deregulation prospects. Dampened disinflation momentum has also increased speculation of a December pause in rate cuts.
Key U.S. economic data today includes retail sales, Empire Manufacturing, and industrial production. Retail sales are expected to decelerate (+0.3% m/m headline, +0.3% core). Fed’s Collins noted no new price pressures but stressed a December rate cut is not guaranteed.
Corporate Highlights:
- Applied Materials (AMAT-US): Fell post-earnings despite Q4 beat, with weaker Q1 guidance and lack of broader 2025 commentary.
- Domino’s (DPZ-US) and Pool Corp (POOL-US): Rose after Buffett’s Berkshire Hathaway disclosed positions.
- Ulta Beauty (ULTA-US): Weak after selling most of its Berkshire stake.
- Palantir (PLTR-US): Gained on plans to transfer its listing to Nasdaq from NYSE.
- Evofem Biosciences (EVO-US): Higher after Halozyme (HALO-US) confirmed acquisition offer.
- Post Holdings (POST-US): Rose on an earnings beat and upward guidance revision
U.S. equities closed lower on Thursday, with the Dow down 0.47%, the S&P 500 losing 0.60%, the Nasdaq declining 0.64%, and the Russell 2000 dropping 1.37%. Indices ended near their lowest levels for the day, with markets on track for weekly declines. Key lagging sectors included pharma (with vaccine stocks hit by news of RFK’s nod for HHS), biotech, managed care, aerospace and defense, oil services, transportation, steel, commodity chemicals, REITs, and small-caps. Big tech was mixed, while entertainment, semiconductors, airlines, asset managers, integrated energy, homebuilders, tobacco, and dollar stores outperformed.
Treasuries were mixed, showing some curve flattening as short-term yields rose slightly in response to Fed Chair Powell’s comments. The Dollar index rose 0.4%, Bitcoin futures reversed after seven days of gains, down 2.2%, while WTI crude edged up 0.4%.
A defensive tone followed somewhat hawkish interpretations of Powell’s comments, with inflation concerns persisting after firmer PPI and jobless claims data earlier in the day. The bond market continues to see yield increases due to strong macro momentum, uneven disinflation trends, and scrutiny over Trump-era policies like tariffs, which add to concerns around deficits. Bulls are still leaning on factors like seasonality, buybacks, and deregulation tailwinds, while bears highlight stretched valuations post-election rally.
Fed Chair Powell emphasized that the economy does not indicate urgency for rate cuts, allowing the Fed to be cautious. Fed Governor Kugler and Richmond’s Barkin also voiced a cautious approach, citing disinflation and economic uncertainty. Economic data showed core PPI largely in line with expectations, slight acceleration in final demand services, and a positive turn for final demand goods. Jobless claims were below consensus, with continuing claims near cycle highs.
Company News by GICS Sector
Information Technology
- Cisco Systems (CSCO-US): Revenue largely in line and EPS above estimates; guidance raised for FY25. Noted public sector weakness, though AI orders remained strong, with the company aiming to exceed $1 billion in AI-related orders for FY25.
- ASML Holding (ASML-US): Shares rose after reiterating its 2030 revenue expectations of €44B-€60B with GM of around 56%-60%, supported by AI demand.
- HP (HPQ-US): Fell 6.2% as Q4 EBITDA missed and Q1 guidance came in 6% below estimates.
- Zeta Global (ZETA-US): Responded to recent short report with a detailed rebuttal, pushing back on key claims.
Health Care
- Oscar Health (OSCR-US): Jumped 14.5% after Thrive Capital disclosed it purchased 1.06 million shares.
- Hims & Hers Health (HIMS-US): Dropped 24.5% following Amazon’s One Medical telehealth launch, which will compete directly with Hims in areas like weight loss, hair loss, and mental health treatments.
- Harrow (HROW-US): Declined 17.3% due to a Q3 revenue miss despite EPS meeting expectations, with management citing seasonality and operational challenges impacting revenue.
Communication Services
- Walt Disney (DIS-US): Up 6.2% on a Q1 beat, with strong segment performance in direct-to-consumer (Disney+ subs), while Linear and Sports segments were slightly mixed. FY25 and FY26 guidance pointed to potential upside.
Industrials
- Babcock & Wilcox Enterprises (BW-US): Increased 1.7% after receiving a $246 million coal-to-natural gas conversion project contract from AES Indiana.
Consumer Discretionary
- Tapestry (TPR-US): Gained 12.8% after terminating its merger with Capri Holdings (CPRI-US) due to regulatory delays; also announced a $2 billion share repurchase program.
- Dillard’s (DDS-US): Up 11.5% following a big Q3 EPS beat despite comps down 4%, with the company emphasizing gross margin and expense control.
- Cracker Barrel (CBRL-US): Increased 6.2% after beating Q1 estimates, with restaurant comps outperforming industry benchmarks. FY25 guidance was reaffirmed.
- Rivian (RIVN-US): Fell 14.3% as reports indicated Trump’s transition team plans to cancel Biden’s $7,500 EV tax credit.
- Wynn Resorts (WYNN-US): Rose 8.7% following CNBC’s report that Fertitta Entertainment, which holds a 9.9% stake, may become more active.
Consumer Staples
- Ibotta (IBTA-US): Decreased 12.5% after downgrades and Q4 revenue/EBITDA guidance below expectations. UBS downgraded the stock, citing advertiser budget exhaustion and lack of typical Q4 seasonality.
Financials
- Citigroup (C-US): Down 1.1% after reports that the bank is being investigated by several federal agencies regarding its handling of assets linked to sanctioned Russian oligarch Suleiman Kerimov.
- Charles Schwab (SCHW-US): Rose 2.5% as October client assets grew 29% year-over-year to $9.85 trillion, though slightly down from September.
Energy
- Helmerich & Payne (HP-US): Declined 6.2% after missing Q4 EPS and revenue targets, and issuing lower-than-expected Q1 EBITDA guidance.
Eco Data Releases | Friday November 15th, 2024
S&P 500 Constituent Earnings Announcements | Friday November 15th, 2024
No Constituent Earnings Today
Data sourced from FactSet Research Systems Inc.
