November 13th Market Overview

Happy Thursday everyone.

Markets are down today as Powell’s cautious stance on rate cuts triggered a broad selloff. His remarks in Dallas about the economy’s strength giving the Fed “ability to approach decisions carefully” set the tone, while fresh PPI data added to inflation concerns.

Let's dig in...

Executive Summary

• Markets reset expectations on Powell’s stance that strong economy allows “careful approach” to future policy
  

• October’s PPI and labor data paint picture of resilient economy with stubborn inflation pressures
  

• Disney ($DIS) leads corporate earnings wins, jumping 7% on streaming growth and optimistic guidance
  

• Post-election market momentum shifts as investors digest failed Tapestry-Capri merger and broader M&A implications

Market Overview

Key Market Drivers

1. ETF Industry Record: State Street reports unprecedented ETF inflows, with SPDR S&P Regional Banking ETF ($KRE) attracting over $1.1B in past week. Industry projected to hit $1T inflows by December 9th
   

2. Producer Price Data: October PPI increased 0.2% monthly, with core PPI running hotter than forecast at 0.3%, up from September’s 0.2%
   

3. Labor Market Strength: Initial jobless claims dropped to 217,000 from 221,000, beating economist expectations of 220,000, signaling continued job market resilience
   

4. Powell’s Rate Outlook: Fed Chair emphasized “no urgency” for rate cuts, citing economic strength, causing December rate-cut probability to drop from 82.5% to 58.9%

Stock Spotlight

• $DIS: up 7% after beating Q4 estimates with $1.14 EPS vs $1.10 expected; streaming business showed strong growth
  

• $NVDA: Oppenheimer raised price target to $175 citing “full-stack AI hardware/software” positioning ahead of Nov. 20 earnings
  

• $TPR & $CPR: Tapestry up 13% while Capri declined 5% after terminating their merger agreement
  

• $HIMX: Dropped 14% following Amazon’s entry into telehealth market with Prime service offering

Big Name Updates

• $TSLA: continues down after a huge run… -5% as Jefferies noted potential “conflicts of interest ranging from political responsibilities to governance”
  

• $CSCO: Slipped despite topping estimates and raising full-year guidance
  

• $RTX: Down 4%, leading aerospace sector weakness

Other Notable Company News

• $GILD: Received new buy rating from Citi with $125 target, citing HIV treatment potential
  

• $KRE: Regional Banking ETF attracted $1.1B in post-election inflows
  

• $RMD: JPMorgan flagged potential pressure from upcoming Eli Lilly’s sleep apnea treatment

Sector Watch

Bond Market

Treasury yields spiked following Powell’s remarks:

• 2-year yield climbed to 4.349%

• 10-year yield reached 4.451%

• December rate cut probability dropped to 58.9% from 82.5%

Policy Watch

Powell’s key points:

• Economy shows “no signals” requiring urgent rate cuts
  

• Inflation progress continues but remains above 2% target
  

• Labor market maintains “rough balance” despite recent volatility
  

• Monetary policy moving toward “more neutral setting” without preset path

What to Watch

1. NVIDIA ($NVDA) Earnings (Nov 20):

• Market reaction to AI demand metrics

• Guidance amid China restrictions

• Impact on broader semiconductor sector

2. Regional Bank Performance:

• Post-election momentum in $KRE continues to show strength with $1.1B inflows

• Impact of Powell’s rate decision timing on sector

• Deposit trends as rates hold higher

3. Healthcare Sector Developments:

• ResMed pressure from Eli Lilly’s upcoming sleep apnea treatment

• Novo Nordisk’s phase 3 CagriSema trial results impact

• Obesity drug market competition heating up

4. Post-Election Market Themes:

• ETF flows tracking toward record territory

• Trump-associated stock performance

• Industrial sector response to policy expectations

Thanks for reading 🙂

- John