December 10th Market Overview

Happy Tuesday everyone.

Markets are showing another day of consolidation. Market breadth is deteriorating for the sixth consecutive session.

Google's quantum computing breakthrough is boosting tech stocks. Most market flow seems to be positioning for tomorrow's inflation data release.

Let's dig in...

Executive Summary

• Market breadth continues to narrow with more declining than advancing stocks for the sixth straight trading day
  

• NFIB Small business optimism index is up to 101.7 in November, marking the highest level since June 2021 following the election
  

• $GOOGL announces breakthrough in quantum computing, solving problems that would take classical computers billions of years. This is huge…
  

• $ORCL misses earnings expectations despite 52% growth in cloud infrastructure, highlighting competitive pressures in the space

Market Overview

All major indices posting solid gains today.

Key Market Drivers

1. Inflation Data Ahead: Economists forecast November CPI to show 0.3% monthly increase and 2.7% annual rate
   

2. Semiconductor Pressure: Industry-wide selloff triggered by China’s investigation into $NVDA's market dominance
   

3. Election Impact: Small business confidence surges as owners anticipate favorable tax and regulation policies
   

4. Cloud Competition: Oracle’s earnings miss highlights intensifying battle in cloud infrastructure market

Stock Spotlight

• $GOOGL ▲ 5.57%: Willow quantum chip breakthrough solves complex problems in minutes versus billions of years for classical computers
  

• $ORCL ▼ 7.31%: Despite record AI demand driving 336% growth in GPU consumption, missed earnings expectations with $14.06B revenue vs $14.12B estimate
  

• $ALK ▲ 13.15%: Raises Q4 guidance to $0.40-0.50 EPS from $0.20-0.40, announces new Tokyo and Seoul routes
  

• $WBA ▲ 17.40%: Surges on reports of potential acquisition by Sycamore Partners, deal could close early 2025
  

• $SIRI ▼ 12.37%: Announces $200M cost-cutting initiative and strategic shift away from high-cost streaming audiences

Big Name Updates

• $TSLA: Morgan Stanley raises PT to $400, cites potential benefits from Trump administration’s autonomous vehicle policies
  

• $META: PT increased to $670 on improving teen engagement metrics across Instagram and Facebook
  

• $NVDA: China probe focuses on 90% AI chip market share and InfiniBand bundling practices
  

• $AMZN: Mizuho raises PT to $260, maintaining positive outlook

Other Notable Company News

• $BA: Resumes 737 MAX production with 4,200 order backlog
  

• $LLY: Announces $15B share repurchase program and 15% dividend increase
  

• $DIS: CFO signals streaming price increases while focusing on cost elimination
  

• $MU: Secures $6.1B government subsidy for domestic chip production
  

• $TMUS: CEO clarifies Q4 trending “at least in line with expectations, maybe better”

Sector Watch

Bond Market

No significant bond news today.

Policy Watch

• Trump administration tariffs not expected until late 2025, potentially part of broader fiscal package
  

• Wolfe Research estimates 10% universal tariff could impact GDP by 1.2% and boost inflation 1.1%
  

• Chinese leadership signals strongest dovish stance in decade, preparing stimulus measures
  

• Biden administration successfully blocks $25B Kroger-Albertsons merger on competition concerns

What to Watch

1. CPI Report Release:

• Market reaction to inflation data could signal Fed’s path forward

• Core focus on services inflation excluding housing

• Impact on December FOMC meeting expectations

2. Semiconductor Sector Development:

• Further details on China’s investigation into $NVDA

• Broader impact on chip sector performance

• Policy response from U.S. administration

3. Cloud Infrastructure Competition:

• $ORCL's post-earnings price action

• Sector-wide implications for cloud providers

• AI-driven demand metrics
  
  
  Thanks for reading 🙂
  
  - John