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Thursday, November 7

Some of the largest macro moves in the market today include: Copper +4.0%. USD/CNH -0.6%. US Dollar Index -0.4%. Some of the largest moves among US mega-cap stocks include: JPMorgan Chase & Co (JPM) -1.0%. 

The Bank of England has cut its Bank Rate by 25 basis points to 4.75%, marking the second rate reduction in four years as inflation data showed a significant decline. This decision was influenced by evidence of slowing price growth and is expected to have implications for future monetary policy amid an expansionary budget from the Labour Party that could temporarily lift inflation expectations.

In response to Donald Trump's recent election victory, U.S. markets experienced substantial gains, with major indices reaching record highs; this optimism stems from anticipated pro-business policies including tax cuts and deregulation under Republican control. However, rising Treasury yields are raising concerns about potential economic slowdowns that may affect market sentiment moving forward.

China's trade figures revealed a notable increase in exports alongside declining imports for October 2024, leading to a surge in China's trade surplus—its largest since June—and reflecting ongoing challenges related to domestic demand amidst external pressures such as tariffs associated with Trump’s presidency. These developments indicate shifting dynamics within global supply chains and highlight broader geopolitical influences on financial markets.

Invesco DB US Dollar Index Bullish Fund (UUP) [-0.5%]
The Invesco DB US Dollar Index Bullish Fund (UUP) has declined by 0.5% since Wednesday. This movement aligns with a broader decrease in the U.S. dollar index, which fell by 0.35%. As of 5:45 AM ET today, the U.S. dollar index was down by 0.19% to 104.89, influenced by rising global stocks and expectations of fiscal expansion. Concurrently, U.S. mortgage applications dropped significantly last week, and crude oil inventories increased, suggesting potential economic concerns. Additionally, Treasury yields have risen, reflecting market anticipation of inflationary pressures due to higher tariffs. The USD/CNH currency pair has also dropped notably, indicating a correlation that may affect the dollar index and, consequently, the performance of UUP.

iShares Russell 2000 ETF (IWM) [-0.3%]
The iShares Russell 2000 ETF (IWM) has experienced a decline of 0.3% in pre-market trading on Thursday, following a notable increase of 5.80% on November 6, 2024. Year-to-date performance remains robust at 18.2%. The ETF's top holdings have shown mixed results, with Duolingo Inc. reporting strong Q3 results yet issuing lower Q4 guidance, leading to a significant stock decline. Meanwhile, the labor market displayed resilience, with initial jobless claims rising slightly but remaining stable overall. This aligns with IWM's historical volatility response. Concurrently, the Russell 2000 Index increased by 0.8% during market hours, influenced by political developments and expectations of pro-business policies. In contrast, the Dow Jones Index declined slightly, reflecting broader market sentiment and correlating with IWM's current price movement.

ARM | -4.2% | -6.1B
Arm Holdings PLC | Semiconductors
Arm Holdings PLC reported its second-quarter financial results for the fiscal year ending September 30, 2024, with adjusted earnings per share of 0.30, surpassing estimates of 0.26, and sales of 844 million, exceeding expectations of 808.37 million. This represented a year-over-year revenue increase of 4.71%. Despite these positive earnings results, shares fell in after-hours trading by approximately 4.3%. The company reaffirmed its full-year revenue guidance between 3.8 billion and 4.1 billion, with adjusted EPS projected at 1.45 to 1.65. For the third quarter, Arm anticipates revenue between 920 million and 970 million, with adjusted EPS expected between 0.32 and 0.36. The CEO highlighted strong demand for high-performance products and noted that the cumulative number of chips shipped by the Arm ecosystem has exceeded 300 billion.

Z | +13.7% | +2.2B
Zillow Group Inc | Real Estate Services
Zillow Group Inc reported its third-quarter earnings on November 6, 2024, achieving revenue of $581 million, exceeding analyst expectations of $554.68 million. The adjusted earnings per share (EPS) was $0.35, surpassing the consensus estimate of $0.29 by over 20%. This marks a 17% year-over-year revenue increase from $496 million in the same quarter last year. The company's residential revenue rose by 12%, rentals revenue increased by 24%, and mortgages revenue surged by 63% year-over-year. Zillow also reported an average of 233 million monthly active users, reflecting a 1% growth year-over-year. Despite a net loss of $20 million, or 3% of total revenue, the strong financial results contributed to a significant rise in stock price, with a notable increase following the earnings announcement. Additionally, the company set its Q4 revenue guidance between $525 million and $540 million.

HSY | -2.7%| -946.2M
Hershey Co | Packaged Foods & Meats
Hershey Co. reported disappointing third-quarter 2024 financial results, with adjusted earnings per share (EPS) of 2.34, falling short of the consensus estimate of 2.56 by 0.22. Revenue for the quarter was 2.99 billion, missing expectations of 3.08 billion and marking a year-over-year decline of 1.4%. The company revised its fiscal year 2024 guidance, lowering its adjusted EPS outlook to a range of 9.00 to 9.10 from a previous estimate of 9.49 to 9.59, while the consensus was 9.40. Additionally, Hershey's North America salty snacks segment experienced a significant decline in net sales of 15% year-over-year, amidst high cocoa prices and a challenging consumer environment. The revenue guidance for fiscal year 2024 was also adjusted downward to between 11.2 billion and 11.2 billion from a previous range of 11.4 billion to 11.4 billion.

QCOM | +5.8%| +11.8B
Qualcomm Inc | Semiconductors
Qualcomm Inc's shares have surged following the release of its fourth-quarter financial results, which exceeded market expectations. The company reported an adjusted EPS of 2.69, surpassing the estimate of 2.56, and sales of 10.244 billion, exceeding the anticipated 9.905 billion. Qualcomm projected first-quarter revenue between 10.5 billion and 11.3 billion, against an estimate of 10.59 billion, with adjusted EPS guidance of 2.85 to 3.05, compared to the 2.86 estimate. Additionally, Qualcomm's board approved a new $15 billion stock repurchase authorization, complementing its existing program. Social media highlights noted a positive market reaction, with the stock jumping approximately 10% after the earnings announcement, driven by strong performance in high-end Android handsets and the automotive sector. The stock has now reached a 14-week high.

MRNA | +7.2% | +1.5B
Moderna Inc | Biotechnology
Moderna Inc. reported its Q3 financial results, with revenue of $1.86 billion, exceeding analyst expectations of $1.25 billion and reflecting a year-over-year increase of 1.7%. The company achieved a net income of $13 million, a notable recovery from a loss of $3.6 billion in the same quarter last year. Earnings per share were $0.03, significantly surpassing estimates of a loss of $1.90. Operating expenses were reduced by 50% year-over-year to $1.93 billion, while the operating loss decreased by 97% to $70 million, markedly better than the anticipated loss of $794.1 million. Following the earnings announcement at 6:30 AM NY time, Moderna's stock price increased by 10%. The company reaffirmed its full-year net product sales guidance of $3.0 billion to $3.5 billion from its respiratory franchise.

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