November 20th Market Overview

Happy Wednesday everyone.

Retail is getting hit with a rough earnings miss on $TGT. The VIX is up and things are volatile.

$NVDA earnings report coming in hot after the bell and that is what I'll be watching post market today.

Let’s dig in….

Executive Summary

• Retail sector rocked by $TGT's earnings miss, while $WSM provides unexpected bright spot
  

• Semiconductor stocks retreat ahead of $NVDA's report, with options implying 8.5% post-earnings move
  

• Fed Governor Bowman signals inflation progress has “stalled,” impacting rate cut expectations

Market Overview

Key Market Drivers

1. Retail Sector Pressure: $TGT earnings miss triggers broader retail selloff, affecting $COST, $DG, and $FIVE
   

2. Tech Anticipation: Semiconductor stocks retreat ahead of $NVDA's earnings, with VanEck Semiconductor ETF (▼ 1.3%)
   

3. High-End Retail Resilience: $WSM's strong performance (▲ 29%) suggests luxury consumer remains healthy
   

4. Fed Commentary: Mixed signals from Fed officials about rate cut timing impact market sentiment

Stock Spotlight

• $TGT: Plunges (▼ 21%) after reporting Q3 EPS of $1.85 vs $2.30 expected, cutting FY24 guidance to $8.30-$8.90 from $9.00-$9.70
  

• $WSM: Surges (▲ 29%) on earnings beat ($1.96 vs $1.78) and raised guidance, marking best day since 2008
  

• $LMND: Jumps (▲ 17%) on Morgan Stanley upgrade, citing ambitious $10B premium growth target
  

• $APP: Advances (▲ 4.8%) after Piper Sandler initiates coverage with overweight rating

Big Name Updates

• $META: Jefferies issues buy rating (PT: $675), highlighting new Business AI group formation
  

• $AAPL: Bernstein maintains outperform rating (PT: $240), citing improved margins and negative cash conversion cycle
  

• $AMZN: JPMorgan reaffirms top pick status, forecasting strong holiday sales
  

• $NVDA: Options market pricing in 8.5% move post-earnings, hasn’t declined on consecutive earnings since ChatGPT launch

Other Notable Company News

• $CMCSA: Announces NBC Universal cable networks spinoff, valued at $7B
  

• $CHWY: Bank of America double upgrades to Buy (PT: $40), citing improving industry backdrop
  

• $HOOD: Bernstein raises to Outperform (PT: $51), expects regulatory tailwinds
  

• $DKNG: Goldman reiterates buy rating (PT: $57), highlighting TAM opportunity

Sector Watch

Policy Watch

• Fed Governor Cook signals expectation for continued rate cuts as inflation eases
  

• Fed Governor Bowman expresses concern about stalled inflation progress
  

• 94 out of 100 economists anticipate 25bps Fed rate cut in December
  

• Reuters poll indicates rising risk of U.S. inflation resurgence next year according to 57 of 67 economists

What to Watch

1. Nvidia’s Earnings Impact:

• Post-market report crucial for AI sector sentiment

• Focus on Blackwell AI chip demand commentary

• Options market pricing suggests significant volatility

2. Retail Sector Health:

• $TGT's weak discretionary spending signals

• Impact on upcoming retail earnings reports

• Holiday season forecasts from major retailers

3. Fed Policy Evolution:

• Upcoming economic data influence on rate decisions

• Commentary from Fed officials on inflation progress

• Market reaction to shifting rate cut expectations

Thanks for reading 🙂

- John