November 4th Market Overview

Happy Monday everyone.

To state the obvious - It’s election week and also the fed meeting is this week. I’m buckled up for a bumpy ride and am personally in a risk off mindset.

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

If you figure out what the hell company he is talking about…let me know.


Let's dig in...

Executive Summary

• Markets display heightened volatility with Dow dropping 0.66% amid pre-election caution
  

• $NVDA set to replace $INTC in historic Dow Jones Industrial Average reshuffling
  

• Factory orders decline 0.5% in September, marking fourth drop in five months
  

• OPEC+ decision to delay production increase sends oil up 2.45% to $71.19

Market Overview

All major indices posting red today with the market skeptical ahead of tomorrow’s election and Thursday’s Fed decision.

Key Market Drivers

1. Election Uncertainty:

   • Latest polls show Harris gaining ground in key battleground states

   • Trump and Harris virtually tied at 48.5% and 48.4% respectively

   • Market pricing in potential policy shifts affecting renewables, banking sectors
     

2. Federal Reserve Meeting:

   • 98% probability of 25-basis point rate cut

   • Previous reduction of 50 basis points in September

   • BlackRock suggests market may be overestimating total 2024 cuts
     

3. Corporate Earnings Season:

   • 80% of S&P 500 companies have reported

   • 68% beat EPS expectations

   • Corporate sentiment shows typical pre-election uncertainty

Stock Spotlight

• $NVDA ▲ 1.09%: Joining Dow Jones Industrial Average, secures half of TSMC’s CoWoS capacity, demonstrates strong AI demand momentum
  

• $INTC ▼ 4.00%: Removed from Dow index, faces concerns about long-term viability despite $8.5B CHIPS Act grants
  

• $BRK.B ▼ 3.00%: Q3 operating earnings drop 6% to $10.1B, cash position grows to $325.2B
  

• $VST ▼ 3.22%: down on regulatory rejection of nuclear power increase for data centers
  

• $PTON ▲ 6.00%: Bank of America upgrades to buy with $9 target, citing new CEO potential

Big Name Updates

• $AAPL: Pressure continues as Berkshire reduces stake by approximately 100 million shares
  

• $AMZN: Morgan Stanley raises target to $230, citing high-margin business growth
  

• $MAR ▼ 2.06%: Misses Q3 expectations with EPS of $2.26 vs $2.31 estimate

Other Notable Company News

• $RBLX: Upgraded to overweight with $65 target, bull case at $110
  

• $CORZ: Secures $10B Microsoft investment for AI data centers
  

• $VKTX: Oral weight loss drug shows 8.2% reduction, leading efficacy in class
  

• $TTD: Added to Bank of America’s US 1 List of top buy ideas

Sector Watch

Bond Market

Treasury yields continue their notable descent, with the 10-year yield dropping 8.6 basis points to 4.311%. This marks the largest single-day decline in two months.

Policy Watch

• Federal Reserve meeting scheduled for Thursday with strong expectations for a 25-basis point rate cut
  

• China’s National People’s Congress reviewing proposal to raise local government debt limits
  

• Shanghai announces new EV subsidies, potentially impacting global automotive sector
  

• Environmental and regulatory hurdles affecting nuclear power expansion plans

What to Watch

1. Election Results Impact:

   • Potential market volatility based on outcome clarity

   • Sector-specific movements based on candidate policies

   • Possible legal challenges affecting market sentiment
     

2. Federal Reserve Decision:

   • Market reaction to expected rate cut

   • Updated economic projections

   • Powell’s commentary on inflation and growth outlook
     

3. China Policy Developments:

   • Implementation of new EV subsidies

   • Local government debt limit adjustments

   • Impact on global supply chains and trade relations

P.S.
 
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Thanks for reading 🙂

- John