November 13th Market Overview

Happy Wednesday everyone.

Markets are hovering near record levels as the market digest October’s inflation data matching expectations at 2.6% annually.

The post-election rally is showing signs of calming down a bit, with the market starting to carefully weigh the implications of Trump’s upcoming presidency on fiscal and monetary policy.

Let's dig in...

Executive Summary

• CPI data meets expectations, boosting December rate cut probability to 82.3% from Tuesday’s 58.7%
  

• Post-election market momentum calms down, while small-cap stocks continue to outperform
  

• Cybersecurity sector shows strength with notable gains from $CRWD and other security names
  

• Banking stocks maintain upward trajectory on anticipated deregulation policies

Market Overview

Key Market Drivers

1. October CPI rises 2.6% annually, core inflation steady at 3.3%, both matching consensus
   

2. Small-cap Russell 2000 jumps nearly 1%, continuing post-election momentum
   

3. Treasury yield curve spread widens to 13 basis points, highest since last week
   

4. Bank stocks rally amid deregulation expectations, with sector ETFs up approximately 1%

Stock Spotlight

• $RKLB: Surged ▲ 35% after posting Q3 revenue of $104.8 million, exceeding expectations with 55% YoY growth
  

• $CAVA: Jumped ▲ 7% on Q3 earnings beat of $0.15 vs $0.11 expected, revenue reaching $244 million
  

• $CHTR: Advanced ▲ 5.6% following Liberty Broadband acquisition announcement
  

• $CRWD: Climbed ▲ 4% leading cybersecurity sector strength
  

• $NVDA: Slipped ▼ 1% amid broader semiconductor weakness, dragging on tech sector

Big Name Updates

• $AAPL: Named top pick for 2025 by Evercore ISI, targeting $300 price on AI integration and iPhone upgrade cycle potential
  

• $TSLA: Trading volatile as Musk appointed to lead new government department under Trump administration
  

• $SAVE: Moving toward potential bankruptcy filing, according to market reports
  

• $SBUX: Shares decline after Redburn Atlantic downgrade, citing recovery concerns despite “Back to Starbucks” initiative

Other Notable Company News

• VanEck Semiconductor ETF ($SMH): Down over 1%, marking fourth consecutive decline
  

• Global X Cybersecurity ETF ($BUG): Up 1% as sector outperforms broader market
  

• SPDR Regional Banking ETF ($KRE): Up 14% in November, tracking best month since July

Sector Watch

Bond Market

• 10-year Treasury yield: 4.451% ▲ 0.011, rising after morning pullback
  

• 2-year Treasury yield: 4.284% ▼ 0.079, responding to inflation data
  

• Yield curve spread widening signals growing market confidence in December rate cut

Policy Watch

• Dallas Fed President Logan emphasizes cautious approach to rate cuts, citing uncertain policy environment
  

• St. Louis Fed President Musalem states “more work to do” on price stability journey
  

• Fed funds futures now pricing 82.3% probability of December rate cut, up from 58.7% Tuesday
  

• Market anticipating Trump administration’s impact on regulation, trade policies

What to Watch

1. Tomorrow’s PPI Data Release:

• Critical for confirming inflation trends

• Could influence December rate cut probability

• Watch for any deviation from expected numbers

2. Fed Chair Powell’s Speech Tomorrow:

• May provide clarity on rate cut timeline

• Could address recent inflation data

• Watch for comments on fiscal policy impact

3. Russell 2000 Performance:

• Small-caps showing strong momentum

• Key indicator of domestic economic outlook

• Monitor for continuation of post-election rally

 
Thanks for reading 🙂

- John