November 12th Market Overview

Happy Tuesday everyone.

Markets are taking a breather after last week's historic post-election momentum, with the S&P 500 pulling back from its first-ever close above 6,000.

Strong earnings from tech and retail sectors provided some bright spots, while small caps face pressure as investors reassess the “Trump trade”.

Let's dig in...

Executive Summary

• S&P 500 retreats from record levels amid profit-taking, with volume at 70% of 30-day average
  

• Russell 2000 leading declines ▼1.5%, signaling potential exhaustion in small-cap momentum
  

• Regional bank stocks and solar names face significant pressure, continuing post-election trend
  

• Crypto-related equities surge as Bitcoin surpasses silver’s market cap, reaching $1.73T

Market Overview

Key Market Drivers

1. Post-Election Momentum Fades: Market participants recalibrating positions after initial enthusiasm
   

2. Earnings Catalysts: Strong reports from $SHOP and $HD highlighting consumer resilience
   

3. Economic Focus: Richmond Fed President Barkin signals economy in “good place”
   

4. Technical Factors: Market analyst Ed Yardeni raises 2024 S&P target to 6,100, citing Trump policies

Stock Spotlight

• $SHOP: Surged ▲26% on stellar Q3 results - Revenue hit $2.16B (▲26% YoY), GMV reached $69.7B (▲24% YoY), with operating income soaring ▲132% to $283M
  

• $NVDA Alexander Green says this “Nvidia has invested more in this one company than any other”. 
  

• $HD: Raised FY guidance despite consumer caution on big projects, now expects -2.5% same-store sales vs previous -3% to -4%
  

• $TSLA: Dropped ▼5% despite Morgan Stanley’s $500 bull case tied to Musk’s expanded political influence
  

• $ONON: Posted strong Q3 with revenue at CHF 635.8M (▲32.3% YoY), notably APAC revenue surged ▲79.3%
  

Big Name Updates

• $META: Plans EU ad changes to meet regulatory demands, will prompt users for “less personalized” options
  

• $AMZN: Accelerates custom AI chip development to reduce $NVDA reliance
  

• $AAPL: UBS notes shortening iPhone wait times, suggesting demand softness
  

• $NVDA: Receives new coverage from Redburn Atlantic with buy rating, $178 PT; Mizuho raises PT to $165

Other Notable Company News

• $TSM: Projects full capacity for 5nm/3nm lines through H1 2025, CoWoS packaging to hit 90K wafers monthly by 2025
  

• $MPWR: Stifel defends position in $NVDA ecosystem, dismisses booking cancellation rumors
  

• $HOOD: October metrics show strong momentum - assets under custody ▲5% MoM, added 90k funded customers

Sector Watch

Policy Watch

• President-elect Trump appoints Lee Zeldin as EPA head
  

• Japan announces $65B semiconductor/AI support through 2030
  

• China plans deed tax cuts in major cities to support housing market
  

• OPEC reduces 2024 demand growth forecast to 1.82M BPD

What to Watch

1. CPI Data Release: Critical inflation reading could impact Fed policy trajectory

• Market especially sensitive after recent Fed commentary

• Could influence trading in rate-sensitive sectors

2. Retail Earnings Continue: $WMT reports before the bell

• Watch for consumer spending trends heading into holidays

• Commentary on inflation impact on margins

3. Tech Sector Momentum: Focus on AI chip developments

• $NVDA ecosystem stocks showing sensitivity to market shifts

• Custom chip initiatives from major tech players gaining attention

4. Small Cap Behavior: Russell 2000 showing signs of weakness

• Key technical levels could trigger further selling

• Important gauge of broader market risk appetite

 
Thanks for reading 🙂

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