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Tuesday, November 18

Noteworthy macro moves today: US 10Y Treasury Bond +0.3%. US 2Y Treasury Bond +0.1%. Noteworthy US mega-cap moves today: Amazon.com Inc (AMZN) -2.5%. Microsoft Corp (MSFT) -2.2%. Meta Platforms Inc (META) -1.5%. 

Global equity markets are trading lower amid concerns over high valuations in technology stocks and uncertainty surrounding upcoming economic data releases, including the delayed U.S. jobs report and Nvidia's earnings announcement. The S&P 500, Dow Jones, and Nasdaq have all shown notable declines as traders react to these pressures.

Recent economic data highlights include a significant drop in housing starts in Canada, which fell by 17% year-over-year to a seasonally adjusted rate of 232,765 units in October. Additionally, U.S. jobless claims data has been distorted due to the recent government shutdown, with initial claims reported at 232,000 for the week ending October 18.

Market sentiment is further impacted by Federal Reserve officials expressing divided views on interest rate cuts; some advocate for caution while others support further accommodation. This uncertainty is reflected in the mixed performance of global equity indices today as investors await clearer signals from upcoming economic reports and corporate earnings announcements.

SPDR Dow Jones Industrial Average ETF Trust (DIA) [-0.8%]
The SPDR Dow Jones Industrial Average ETF Trust (DIA) has seen a decline of 0.8% in pre-market trading. This movement coincides with broader negative sentiment in global equity markets, where major indices are experiencing significant declines. The Nikkei Index has dropped notably due to concerns over high valuations of AI-related stocks and uncertainty regarding Federal Reserve policy. Within the ETF's holdings, Honeywell International Inc. has faced a premarket decline attributed to a double downgrade by Bank of America Merrill Lynch. Other notable contributors to the ETF's performance include declines from Microsoft, Goldman Sachs, and Amazon. The S&P 500 Index has also decreased, reflecting similar market pressures that may influence DIA's performance.

iShares MSCI Japan ETF (EWJ) [-2.1%]
The iShares MSCI Japan ETF (EWJ) has seen a decline of approximately 2.1% as the Japanese stock market, represented by the Nikkei 225 index, has dropped over 3%. This downturn is attributed to concerns regarding high valuations in technology stocks and negative sentiment from global markets. Notable contributors to the ETF's performance include Toyota Motor Corporation, Sony, and Mitsubishi UFJ Financial Group, all of which have posted significant losses. Additionally, the S&P 500 Index has decreased by 0.61%, reflecting broader market sentiment that may also be influencing EWJ's performance.

AMZN | -2.2% | -53.2B
Amazon.com Inc | Broadline Retail
Amazon.com Inc has raised $15 billion in its first U.S. dollar bond offering in three years, aimed at funding AI infrastructure and other initiatives. The proceeds will support acquisitions, capital expenditures, and share buybacks. This bond sale attracted approximately $80 billion in demand, reflecting significant interest in Amazon's financial strategies. Concurrently, the European Union is investigating Amazon's cloud computing services under digital law, alongside Microsoft. Shares of Amazon slipped after Redburn downgraded both Amazon and Microsoft to neutral from buy, citing concerns over "hyperscaler economics" and lower expected returns related to capital requirements for GPU deployments.

ESLT | +5.5% | +1.3B
Elbit Systems Ltd | Aerospace & Defense
Elbit Systems Ltd reported its Q3 2025 results, revealing a notable increase in non-GAAP earnings per share, rising to 3.35 from 2.21 year-over-year. Revenues increased to 1.922 billion, up from 1.718 billion in the prior year. The company announced an attributable net income of 133.4 million, compared to 79.1 million last year. Additionally, Elbit declared a quarterly dividend of 0.75 per share, payable on January 5, with a record date of December 22. The order backlog reached a record 25.2 billion, reflecting strong demand for its advanced systems amid ongoing global conflicts and heightened defense spending, particularly in Europe.

HD | -4.1% | -14.0B
Home Depot Inc | Home Improvement Retail
Home Depot reported its third-quarter earnings, revealing adjusted earnings per share of 3.74, falling short of analyst expectations of 3.84. Revenue reached 41.4 billion, slightly exceeding the consensus estimate of 41.18 billion. Comparable sales growth was a modest 0.2%. The company has adjusted its fiscal 2025 guidance, projecting total sales growth of approximately 3% and a decline in adjusted diluted earnings per share by about 5% from the previous year. Factors contributing to the disappointing results include a lack of storm activity and ongoing consumer uncertainty impacting demand in the home improvement sector. Following these announcements, the stock price declined significantly, reflecting market reaction to the lowered profit outlook and earnings miss. Home Depot's market capitalization was reported at 356.38 billion.

MDT | +4.1% | +5.4B
Medtronic PLC | Health Care Equipment
Medtronic PLC reported robust second-quarter fiscal 2026 results, with revenue of $8.96 billion, surpassing estimates of $8.87 billion. Adjusted earnings per share (EPS) reached $1.36, exceeding the consensus of $1.31. The company raised its fiscal 2026 organic revenue growth guidance to approximately 5.5%, up from 5%. Adjusted EPS guidance was also lifted to a range of $5.62 to $5.66, aligning with analyst expectations. The Cardiovascular Portfolio saw a significant revenue increase of 10.8%, driven by a remarkable 71% surge in Cardiac Ablation Solutions revenue in the U.S. Additionally, Medtronic's Diabetes business reported a strong 10.3% revenue increase. Following the earnings announcement, the stock saw a notable increase of 10% shortly thereafter.

LOW | -2.8% | -3.5B
Lowe's Companies Inc | Home Improvement Retail
Lowe's Companies Inc has seen a decline of nearly 3% in pre-market trading, coinciding with Home Depot's recent 5% reduction in its 2025 earnings guidance, attributed to weakness in the housing market and consumer uncertainty. During the same period, Lowe's experienced a drop of approximately 2.25%, while Home Depot fell by about 2.85%. Additionally, Lowe's is set to announce its Q3 FY2025 earnings before market open on November 19, 2025, with an estimated EPS of $2.96 and revenue of $20.8 billion. This follows Home Depot's disappointing third-quarter earnings report, which missed analyst expectations and included a lowered profit outlook due to factors such as reduced storm activity and ongoing consumer uncertainty in the home improvement sector.

PDD | -3.9% | -26.6B
PDD Holdings Inc | Broadline Retail
PDD Holdings Inc. reported its third-quarter financial results, revealing revenue of RMB 108.28 billion, a 9% year-over-year increase, yet falling significantly short of the consensus estimate of RMB 145.2 billion. Adjusted earnings per share were RMB 21.08, below the expected RMB 23.50. Net income rose to RMB 29.33 billion, reflecting a 17% increase from the previous year, while operating profit was slightly higher at RMB 25.03 billion. The company noted that revenue growth is moderating due to increased competition and external uncertainties. Following the earnings announcement, shares declined by 2.3%. Social media discussions highlighted that the reported revenue exceeded a different estimate of ¥107.59 billion, with adjusted net income showing a 14% year-over-year rise, but also noted the shortfall in EPS and revenue against other forecasts. The market capitalization was reported at ¥183.19 billion.

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