Daily Markets: Nvidia Results Ahead; Fed Minutes, Retailer Earnings on Tap

Today’s Big Picture

Asia-Pacific equity markets finished the day mixed. Hong Kong’s Hang Seng declined 0.25%, Japan’s Nikkei gave back 0.10%, and China’s Shanghai Composite closed flat, slipping a mere 0.01%. Australia’s ASX All Ordinaries rose 0.28%, India’s SENSEX gained 0.42%, and South Korea’s KOSPI added 0.77% while Taiwan’s TAIEX closed 1.20% higher as AI-fueled speculation drove bellwethers Taiwan Semiconductor (local ticker 2330, TSM) and Mediatek (local ticker 2454, MDTKF) 1.39% and 1.54% higher, respectively. European markets are mostly down in midday trading, and U.S. equity futures point to a lower open.

Today is the last busy day of the week ahead of Thanksgiving. It is another busy day for retailer earnings that will provide fresh insights into consumer spending ahead of the Black Friday-Cyber Monday holiday shopping weekend. This afternoon brings the minutes from the Fed’s policy meeting earlier this month. While those minutes will be picked over, there'll be less scrutiny than usual given that the October CPI and PPI reports were released after that meeting. Still, readers of those minutes are likely looking for insight into how the Fed will determine when it is truly done hiking rates, as well as items that may factor into that first rate cut decision.

Comparing the year-to-date price return for the market cap weighting S&P 500 of 18.44% vs. the 3.14% return for the equal-weighted S&P 500 shows the impact of the “Magnificent Seven.” One of those seven, Nvidia (NVDA) will report its quarterly results after today’s market close. Coming off a new all-time high, it’s fair to say expectations for its October quarter results and guidance are running high but what it says about the AI market is likely to be what investors focus on most.

Data Download

International Economy

Passenger car registrations in the European Union grew 14.6% yoy to 855.5 thousand units in October, marking the 15th consecutive month of increase, boosted in part by a big jump in sales of fully electric cars. Battery electric car registrations in the EU surged by 36.3% to 121.8 thousand units in October, accounting for 14.2% of the market, up from 12% in the same month last year.

Preliminary estimates showed labor productivity in the UK, as measured by output per hour worked, fell 0.2% in 3Q 2023 following the 0.7% increase in the previous period.

Bloomberg reports France is at risk of flouting European Union fiscal guidance while Germany and Italy aren’t seen to be fully complying. The European Commission is expected to publish a draft watch list of countries today as part of its 2024 opinion on national budgets for 2024, a year in which the bloc is set to reinstate debt and deficit rules that were suspended during the pandemic.

India will provide subsidies to 27 tech companies, including Dell (DELL), HP (HPQ), Lenovo (LNVGY), Foxconn (FXCOF), Asus (ASUUY), and Acer (ACEYY), under a production-linked incentive plan for IT hardware aimed at boosting domestic manufacturing. The 27 companies are expected to invest ~$359.9 million while the value of IT hardware production is estimated to be ~$42 billion for laptops, tablets, all-in-one PCs, servers, and ultra-small form factor devices.

Domestic Economy

At 8:30 AM ET, the Chicago Fed’s National Activity Index for October will be released, and folks will be sizing it up against the 0.02 reading for September.

October Existing Home Sales data will be published at 10 AM ET, and the market expects the headline figure will dip to 3.9 million units compared to 3.96 million in September.

The Fed’s meeting minutes from its November policy meeting will be released at 2 PM ET.

Markets

OpenAI and former CEO Sam Altman’s wild ride over the weekend ended on a positive note. Microsoft (MSFT) ended up hiring Altman as the head of AI Research after the OpenAI board removed him as CEO, prompting a 2.05% gain in MSFT and pushing the Technology sector to a 1.45% gain yesterday. Communications Services saw some names trade in sympathy as that sector rose 1.13% but the rest of the market had a less exciting time returning anywhere from -0.30% to 0.78%. This, of course, was reflected in the broad indexes as the Russell 2000 added 0.52%, the Dow gained 0.58%, the S&P 500 rose 0.74% and the Nasdaq Composite closed 1.13% higher.

Another highlight yesterday was Boeing (BA) as shares were bid up 4.65% after the company received a rating upgrade from analysts at Deutsche Bank in response to a recent pickup in the company’s order book.

Here’s how the major market indicators stack up year-to-date:

• Dow Jones Industrial Average: 6.05%
• S&P 500: 18.44%
• Nasdaq Composite: 36.48%
• Russell 2000: 2.06%
• Bitcoin (BTC-USD): 125.88%
• Ether (ETH-USD): 68.76%

Stocks to Watch

Before U.S. equity markets begin trading today, Abercrombie & Fitch (ANF), Analog Devices (A), Baidu (BIDU), Best Buy (BBY), Burlington Stores (BURL), Dick’s Sporting Goods (DKS), Dycom Industries (DY), Hibbett (HIBB), Kohl’s (KSS), Lowe’s (LOW), and Medtronic (MDT) will report their latest quarterly results.

Pre-market breadth is healthy, as shares of 218 of the 503 companies in the S&P 500 have traded hands so far today with 93 gainers and 125 decliners. Standouts this morning include Agilent Technologies (A) which is seeing a strong bid (more below) and Lowe’s (LOW) which has been trading off in response to this morning’s earnings release.

Agilent Technologies moved higher after reporting better-than-expected quarterly results after last night’s market close. The company guided current quarter revenue to $1.555-$1.605 billion compared to the consensus estimate of $1.65 billion and the $1.69 billion posted for its October quarter. For its fiscal 2024, Agilent expects revenue to fall within the range of $6.71-$6.81 billion, below the consensus of $6.96 billion.

Shares of C3.ai (AI) fell yesterday following reports that the enterprise software company is cutting jobs.

Jacobs Engineering (J) entered into a definitive agreement to spin off and combine its Critical Mission Solutions and Cyber & Intelligence government services businesses with Amentum, a leading global engineering and technology solutions provider, to create a new, publicly traded player in the government services sector.

Reports indicate China is preparing a list of 50 private and state-down property developers, including China Vanke (CHVKF), Seazen Group (SZENF), and Longfor GroupLGFRY), that are eligible for loans and equity financing.

The U.S. Securities and Exchange Commission charged cryptocurrency exchange Kraken for allegedly commingling customer money with its own while operating as an unregistered securities exchange, broker, dealer, and clearing agency.

IPOs

Readers who want to dig deeper into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.

After Today’s Market Close

Autodesk (ADSK), Guess? (GES), HP Inc. (HPQ), Jack in the Box (JACK), Nordstrom (JWN), and Nvidia (NVDA) will report their quarterly results after equities stop trading. Those looking for more on upcoming quarterly earnings reports should head on over to Nasdaq’s Earnings Calendar.

On the Horizon

Wednesday, November 22

• Eurozone: Flash Consumer Confidence - November
• US: Weekly MBA Mortgage Applications
• US: Durable Orders – October
• US: The University of Michigan Consumer Sentiment Index (Final) – November
• US: Weekly EIA Crude Oil Inventories

Thursday, November 23

• Eurozone: HCOB Flash Manufacturing & Services PMIs – November
• UK: S&P Global/CIPS Flash Manufacturing & Services PMIs - November

Friday, November 24

• Japan: Inflation Rate – October
• Japan: Jibun Bank Flash Manufacturing & Services PMIs – November
• Germany: Ifo Business Climate Index – November
• US: S&P Global Flash Manufacturing & Services PMIs – November

Thought for the Day

“The thing I’m most thankful for right now is elastic waistbands.” ~ Unknown

Disclosures

• Dycom (DY), Nvidia (NVDA) are constituents of the Tematica BITA Digital Infrastructure & Connectivity Index
• Microsoft (MSFT) is a constituent of the Tematica Research Thematic Dividend All-Stars Index

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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