November 7th Market Overview

Happy Thursday everyone.

The markets continued their massive post-election rally today as the Fed delivered its anticipated quarter-point rate cut.

Powell got a little spicy on his response to a reporter - and the Nasdaq and S&P 500 rips to new all time highs.

Let's dig in...

Executive Summary

• Fed cuts rates 25bps to 4.50-4.75% range, signals more gradual approach to future cuts
  

• Markets extend post-election gains with S&P 500 ▲ 0.8% and Nasdaq ▲ 1.5% to fresh records
  

• Powell emphasizes policy remains restrictive despite cut, cites fiscal policy concerns
  

• Tech sector leads while financials cool after Wednesday’s momentum

Market Overview

Key Market Drivers

1. Fed Policy: 25bps cut delivered with hawkish undertones as Powell signals a more measured approach ahead
   

2. Post-Election Rally: Strong positioning across indices with continued optimism into year-end
   

3. Earnings Momentum: Notable beats from $LYFT, $DUOL, and $QCOM driving individual stock gains
   

4. Tech Leadership: Semiconductor stocks showing particular strength, lifting broader tech sector

Stock Spotlight

• $LYFT ▲ 24%: Exceeded expectations with $1.52B revenue, strong Q4 guidance, multiple analyst upgrades
  

• $WBD ▲ 9.9%: Record-breaking subscriber growth with 7.2M new additions, total base reaches 110.5M
  

• $APP ▲ 44%: Blowout earnings with Q4 EBITDA guidance of $740M-$760M vs $667M expected
  

• $QCOM ▲: Strong earnings across segments, particularly automotive (▲ 68% YoY), new $15B buyback plan
  

• $DUOL: Despite strong metrics (DAU ▲ 54% YoY), stock declines on valuation concerns

Big Name Updates

• $AAPL ▲ 2%: Leading tech rally amid broader sector strength
  

• $META ▲ 3%: Continued momentum in communication services sector
  

• $JPM ▼ 4%: Leading financial sector pullback after Wednesday’s surge
  

• $GS ▼ 0.7%: Moderating gains following post-election financial sector rally

Other Notable Company News

• $PLTR: New partnership with Anthropic and AWS for AI integration, but gets Jefferies downgrade on valuation
  

• $BA: Secured $5.2B deal with Israel for 25 F15 fighter jets, additional $4B China Airlines order potential
  

• $AMC: Unveiled comprehensive GO plan for seating and projection upgrades
  

• $ENPH: Jefferies downgrades citing post-election uncertainty

Sector Watch

Bond Market

Treasury yields went down today following Wednesday’s spike, with the 10-year yield falling 8 basis points to 4.34% and the 2-year yield dropping 6 basis points to 4.2%.

Market participants are adjusting expectations for future rate cuts, with December cut probability now at 63%.

Policy Watch

• Powell firmly states he would not resign if asked by Trump, emphasizes Fed independence
  

• Fed Chair highlights “unsustainable” fiscal path concerns amid rising deficit
  

• Policy remains restrictive despite cut, with Powell citing recent inflation data “a little higher than expected”
  

• Market expectations shift toward more gradual pace of cuts into 2025

What to Watch

1. December Fed Meeting Dynamics:

• Upcoming inflation reports will be crucial for rate decision

• Currently 63% probability of another cut

• Two more inflation reports before decision

2. Fiscal Policy Impact:

• New administration’s tax proposals

• Potential tariff adjustments

• Effect on Fed’s inflation fight

3. Tech Sector Momentum:

• Retail investor positioning

• Semiconductor strength continuation

• AI-related developments

 
Thanks for reading 🙂

- John