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Friday, November 8

Some of the largest macro moves in the market today include: USD/CNH +0.5%. Copper -2.4%. US Dollar Index +0.4%. 

The Federal Reserve recently cut interest rates by 25 basis points to a range of 4.50%-4.75%. This decision has positively influenced market sentiment, particularly in the technology and large-cap sectors, as investors anticipate further easing measures amid economic uncertainty following the recent U.S. elections. Fed Chairman Jerome Powell emphasized that the central bank remains independent from political pressures, reassuring markets about its commitment to managing inflation effectively.

In Canada, unemployment data for October showed an unexpected hold at 6.5%, slightly below expectations but indicating stability in the labor market amidst concerns over economic softening this year; net employment rose modestly during this period despite a slight increase in unemployed individuals. This outcome may alleviate fears regarding potential downturns within Canada's economy.

Additionally, Japan's leading indicators improved significantly with consumer confidence rising alongside decreased unemployment figures reported earlier today; however, household spending continues to decline on an annual basis—albeit less than anticipated last month—suggesting mixed signals about domestic consumption trends moving forward under current monetary policies and external influences such as trade relations impacted by Trump's election victory.

iShares China Large-Cap ETF (FXI) [-4.8%]
The iShares China Large-Cap ETF (FXI) has experienced a significant decline of nearly 5% in pre-market trading. This drop follows China's announcement of a new fiscal support package aimed at easing local government debt repayment strains, which has not met high expectations and has contributed to downward pressure on Chinese equities. The Shanghai Index fell, while the Hang Seng Index also decreased sharply. Additionally, a $1.4 trillion program to refinance local government debt and a 6 trillion yuan bond issuance have been approved to address hidden debt risks. Social media discussions reflect concerns about these developments and their implications for FXI. The performance of FXI was further affected by movements in USD/CNH and declines among major holdings such as TCEHY and JD, which also posted significant losses. Furthermore, the AUD/USD currency pair's decline may have influenced market sentiment toward FXI.

iShares MSCI Japan ETF (EWJ) [-1.0%]
The iShares MSCI Japan ETF (EWJ) has experienced a price decline of 1.0% since Thursday. Japan's household spending data for September revealed a year-over-year drop of 1.1%, which, while better than expected, still points to consumer weakness. Month-over-month spending fell by 1.3%, significantly worse than anticipated. The current daily return for EWJ stands at -0.17%, influenced by recent interest rate cuts from the U.S. Federal Reserve and the Bank of England, alongside mixed responses in global markets. Notably, USD/JPY fluctuations contributed positively to the ETF's performance. Among its holdings, Honda Motor Co. Ltd. reported a significant decline in fiscal second-quarter results, while Sony Group Corp. posted robust earnings driven by strong performance in key segments. The AUD/USD pair has also declined, reflecting broader market sentiment that may impact Japanese equities.

PINS | -10.6% | -2.2B
Pinterest Inc | Interactive Media & Services
Pinterest Inc reported weaker-than-expected guidance for Q4 2024, anticipating revenue between 1.125 billion and 1.145 billion, slightly below analysts' expectations of 1.145 billion. Despite a year-over-year revenue increase of 18% in Q3 to 898.4 million, adjusted earnings per share were only 0.04, missing estimates of 0.07. Global monthly active users decreased by 11% year-over-year to 537 million. Following the earnings report, shares fell significantly in after-hours trading, reflecting market concerns over the company's outlook. Although Pinterest's Q3 earnings included a GAAP net income of 31 million and an EPS of 0.40, surpassing expectations, the disappointing Q4 guidance overshadowed these results, leading to discussions on social media regarding limited revenue upside and potential overreaction in the market.

DKNG | -3.1% | -553.9M
DraftKings Inc | Casinos & Gaming
DraftKings Inc reported a wider-than-expected loss for Q3, with adjusted earnings per share at -0.17, surpassing estimates of -0.42. Revenue increased by 39% year-over-year to approximately 1.1 billion, but fell short of the anticipated 1.112 billion. Following the earnings announcement, the company revised its fiscal year 2024 revenue guidance down to a range of 4.85 billion to 4.95 billion, reflecting unfavorable sports-betting outcomes. Adjusted EBITDA guidance was also reduced, now projected between 240 million and 280 million, down from previous estimates of 340 million to 420 million. Monthly unique payers rose to 3.6 million, a 55% increase year-over-year, while average revenue per payer decreased by 10% to 103, primarily due to the Jackpocket acquisition. In after-hours trading, DraftKings' stock experienced significant volatility, dropping as much as 20%.

ABNB | -6.6%| -5.8B
Airbnb Inc | Hotels, Resorts & Cruise Lines
Airbnb Inc reported its third-quarter 2024 financial results on November 7, revealing earnings per share of $2.13, slightly below the consensus estimate of $2.14. Revenue for the quarter reached $3.73 billion, marginally exceeding expectations of $3.72 billion. The company reported a Gross Booking Value of $20.1 billion, reflecting a year-over-year increase of 10%, and a net income of $1.4 billion, resulting in a net income margin of 37%. Despite this positive revenue growth, the market reacted negatively to the slight miss in EPS and guidance for fourth-quarter revenue in the range of $2.39 billion to $2.44 billion, which is below analyst expectations. Following the earnings announcement, shares experienced significant volatility, initially rising before dropping sharply in pre-market trading, where they were noted to be down approximately 6.6%.

BABA | -3.9%| -71.8B
Alibaba Group Holding Ltd | Broadline Retail
Alibaba Group Holding Ltd's stock has dropped significantly following the announcement of new economic measures by Chinese authorities that did not meet market expectations. The measures, which include a substantial debt swap aimed at assisting local governments, were perceived as inadequate. Consequently, Alibaba's American depositary receipts fell, mirroring a broader decline in Chinese stocks. In premarket trading, the Hang Seng Index futures decreased, and the iShares China Large-Cap ETF also saw a notable drop. Social media discussions have focused on the anticipation of a fiscal stimulus package from Chinese authorities, with a key price level of $101 being highlighted for potential options trading strategies. Additionally, there was a recent report about a $1.4 trillion package targeting local governments' hidden debt over the next five years, which could influence market sentiment regarding Alibaba.

SONY | +7.1% | +1.7B
Sony Group Corp | Consumer Electronics
Sony Group Corp reported strong fiscal second-quarter results, with a 73% year-on-year increase in operating income to ¥455.08 billion, surpassing estimates. Net income rose by 69% to ¥338.50 billion, exceeding expectations. Revenue reached ¥2.91 trillion, a slight year-on-year increase but missing forecasts. The Game & Network Services segment saw an impressive operating income jump of 184%, while the Music segment's operating income rose by 12%. Despite a decline in PS5 unit sales, Sony raised its fiscal 2025 revenue outlook. Additionally, the company reported a GAAP EPS of $0.32, beating expectations, and raised its FY24 sales forecast to $87.05 billion.

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