S&P futures are down 0.3% in Tuesday morning trading after U.S. equities closed mostly higher on Monday, led by select big tech (notably Tesla) and commodity equities, while airlines and rideshare names lagged. Treasuries are rallying, the Dollar index is up 0.2%, gold is up 0.7%, Bitcoin futures rose 0.5%, and WTI crude is down 0.6% after Monday’s 3.5% gain.
The defensive tone reflects rising geopolitical concerns as Ukraine conducts missile strikes on Russian soil amid Putin’s expanded nuclear doctrine. Walmart’s strong earnings highlighted consumer resilience, but markets remain focused on NVIDIA’s Wednesday earnings, which face high expectations. Big tech is under regulatory scrutiny, with limited market impact due to the impending administration change. Momentum seems to be building for Kevin Warsh as Treasury Secretary.
October housing starts and building permits are on the U.S. economic calendar today, with Kansas City Fed President Schmid scheduled to speak. Thursday will bring jobless claims, the Philly Fed survey, and existing home sales, while flash PMIs and University of Michigan consumer sentiment wrap up the week on Friday.
Key Corporate Highlights
- Walmart (WMT-US): Beat expectations and raised FY25 guidance, with Sam’s Club outperformance and growth in high-income customers driving results.
- Lowe’s (LOW-US): Beat earnings and raised FY guidance but flagged continued weakness in big-ticket DIY discretionary demand.
- Super Micro Computer (SMCI-US): Rose sharply after engaging BDO USA as its independent auditor and submitting a compliance plan to Nasdaq.
- Microchip Technology (MCHP-US): Gained on news of a CEO change.
- Alphabet (GOOGL-US): Justice Department reportedly considering structural changes, including potential divestiture of Chrome or Android.
- Hewlett Packard Enterprise (HPE-US): DOJ may challenge its acquisition of Juniper Networks (JNPR-US).
- ADM (ADM-US): In line with preliminary results but noted softer market conditions heading into next year while outlining performance-boosting measures.
- Symbotic (SYM-US): Surged on outsized revenue and EBITDA beats.
- AECOM (ACM-US): FY25 EBITDA guidance in line; announced dividend increase and expanded share buyback
U.S. equities were mostly higher on Monday, with the Dow down 0.13%, the S&P 500 up 0.39%, the Nasdaq gaining 0.60%, and the Russell 2000 rising 0.11%. The modest rebound followed last week’s losses of over 2% for the S&P 500 and more than 3% for the Nasdaq, which erased post-election record highs. Outperforming sectors included crypto-linked firms, semiconductors, tech hardware, entertainment, energy, precious metals miners, and dollar stores. Underperformers included credit cards, banks, airlines, housing-linked retail, department stores, athletic apparel, casual diners, biotech, pharma, and managed care.
Treasuries were slightly firmer, with a touch of curve steepening as rates stabilized following last week’s increase, which pushed yields to the highest levels since early summer. The Dollar index fell 0.4%, gold rose 1.7%, Bitcoin futures increased 0.4%, and WTI crude gained 3.4% after last week’s nearly 5% decline.
The market reflected a more positive tone amid modest Treasury gains and improving sentiment, though factors such as positive macro momentum, hawkish Fed commentary, inflationary Trump policies, and concerns over deficits continue to weigh on investor sentiment. Additionally, there are bearish narratives around elevated valuations, cracks in AI growth, geopolitical tensions, and antitrust concerns. Bullish drivers include FOMO, positive seasonality, and optimism around Trump administration tax and deregulation policies.
November’s NAHB Builder Confidence Index beat consensus, rising to 46.0 from 43.0 in October. Other highlights included ongoing discussions about Treasury Secretary nominations and President Biden’s approval of U.S. long-range missiles inside Russia. China’s President Xi expressed readiness to work with the Trump administration. NVIDIA’s upcoming earnings on Wednesday remain the corporate highlight of the week.
Company News by GICS Sector
Information Technology
- NVIDIA (NVDA-US): Fell 1.3% after The Information reported customer concerns over overheating Blackwell AI chips in servers. Earnings are expected Wednesday.
- Super Micro Computer (SMCI-US): Gained 15.9% as the company intends to submit a plan to avoid Nasdaq delisting.
- Hewlett Packard Enterprise (HPE-US): Up 1.5% after Raymond James upgraded the stock to “Strong Buy,” citing AI model advancements and traditional server growth for fiscal 2025 sales.
- Wolfspeed (WOLF-US): Rose 4.7% after announcing the departure of President & CEO Gregg Lowe, who will also leave the board.
Consumer Discretionary
- Tesla (TSLA-US): Higher after Bloomberg reported that Trump’s administration may ease regulations on self-driving vehicles.
- Redfin (RDFN-US): Dropped 4.4% after Goldman Sachs downgraded the stock to “Sell,” citing valuation and risks to housing market forecasts.
Communication Services
- Netflix (NFLX-US): Drew over 60 million viewers for the Tyson/Paul fight but faced widespread streaming issues during its largest live event to date.
- Roku (ROKU-US): Rose 7.5% after Baird upgraded the stock to “Outperform,” citing valuation and improved industry tailwinds.
- Warner Bros. Discovery (WBD-US): Rose 2.7% after settling a lawsuit with the NBA and agreeing to license Inside the NBA to ESPN and ABC starting next season.
Health Care
- Moderna (MRNA-US): Gained 7.2% after HSBC upgraded the stock to “Hold,” highlighting its pipeline and expectations for a phase 3 interim analysis of its CMV vaccine in late 2024.
- CVS Health (CVS-US): Announced four new board members as part of an agreement with Glenview Capital.
Financials
- Coinbase (COIN-US): Up 6.4% on news that CEO Brian Armstrong will meet with President Trump to discuss potential administration appointments.
- Bakkt Holdings (BKKT-US): Surged 162.5% on reports that Trump Media & Technology Group (DJT-US) is in advanced talks to acquire the crypto firm, with ICE-US owning 55% of the company.
Industrials
- Beacon Roofing Supply (BECN-US): Up 9.9% on reports of an acquisition by QXO-US, with terms not yet disclosed.
- Uber Technologies (UBER-US): Declined 5.4% on reports that the Trump administration plans to prioritize regulating self-driving vehicles.
- Bright Horizons Family Solutions (BFAM-US): Up 3.9% after BMO upgraded the stock to “Outperform,” citing potential tax credits from Trump administration policies and better risk/reward post-recent selloff (-22% MTD).
Energy
- Liberty Energy (LBRT-US): Increased 4.9% after Trump officially nominated CEO Chris Wright for Energy Secretary.
Eco Data Releases | Tuesday November 19th, 2024
S&P 500 Constituent Earnings Announcements | Tuesday November 19th, 2024
Data sourced from FactSet Research Systems Inc.
