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Friday, November 15

Some of the largest macro moves in the market today include: Bitcoin +2.5%. Nasdaq 100 Index (US) -0.8%. S&P 500 Index (US) -0.5%. 

Recent economic data releases have significantly influenced market sentiment, particularly in the U.S. Retail sales for October increased by 0.4%, surpassing expectations of a 0.3% rise and following an upwardly revised gain from September, indicating robust consumer spending ahead of the holiday season. Additionally, import prices unexpectedly rebounded with a monthly increase of 0.3%, driven largely by rising fuel costs after previous declines.

In Europe, mixed signals emerged as UK GDP growth was reported at just 1% year-on-year for Q3—slightly below forecasts—and industrial production fell more than anticipated in September (-1%). This has contributed to cautious trading across European markets amid concerns over potential rate cuts from central banks due to weakening economic indicators.

The Federal Reserve's recent comments also played a crucial role; Chair Jerome Powell indicated that there is no immediate need for aggressive interest rate cuts given current economic strength and job market conditions. As traders recalibrate their positions based on this guidance alongside upcoming retail sales figures set to be released later today, equity indices are experiencing downward pressure while bond yields remain relatively stable amidst these developments.

Invesco QQQ Trust Series I (QQQ) [-0.8%]
The Invesco QQQ Trust (NASDAQ:QQQ) has declined by approximately 0.8%, influenced by Federal Reserve Chair Jerome Powell's remarks on the U.S. economy and the diminished likelihood of imminent rate cuts. Following these comments, the probability of a December rate reduction has decreased significantly from nearly 80% to 58.9%. This sentiment has contributed to broader market losses, with major indices, including the Dow Jones, also experiencing declines. The tech sector, represented by QQQ, has reflected this downturn, marking a four-day pullback. Notably, Applied Materials (AMAT) has faced a significant drop in share price due to lowered price targets from multiple brokerages, despite reporting better-than-expected earnings. Social media discussions highlight ongoing trading strategies linked to QQQ, alongside potential inclusion of Palantir (PLTR) as it transfers to NASDAQ.

iShares China Large-Cap ETF (FXI) [+0.7%]
The iShares China Large-Cap ETF (FXI) has seen a price increase of 0.7% since Thursday, coinciding with recent economic data from China. Key indicators revealed a year-on-year growth in industrial production of 5.3% and a retail sales increase of 4.8%, suggesting positive momentum in the industrial sector. Additionally, the People's Bank of China has injected liquidity into the financial system to bolster economic stability. In a notable portfolio adjustment, billionaire investor David Tepper's Appaloosa Management reduced its stake in FXI by 5% in the third quarter, despite increasing overall exposure to Chinese stocks. Social media discussions highlight mixed economic signals, including a 0.5% decline in new home prices and JD.Com's significant decline over the past month. The USD/CNH movement contributed to FXI's performance, while Chinese retail sales growth was supported by substantial monetary stimulus measures.

AMAT | -9.0% | -12.6B
Applied Materials Inc | Semiconductor Materials & Equipment
Applied Materials Inc. has seen a significant decline in its stock price following the release of its fourth-quarter financial results and guidance for the first quarter of fiscal 2025. The company reported adjusted earnings per share of $2.32, exceeding expectations, but its revenue forecast of approximately $7.15 billion fell short of analyst estimates. This forecast contrasts with a consensus of $7.25 billion. Additionally, brokerages have revised their price targets downward, with Deutsche Bank lowering its target from 220 to 200 and Needham adjusting from 240 to 225. Despite a quarterly revenue increase of 5% year-over-year to $7.05 billion, net income dropped to $1.73 billion from $2 billion a year earlier, influenced by a notable 28% decline in sales from China. The stock has dropped significantly in premarket trading, reflecting mixed market sentiment following the earnings report.

DPZ | +5.7% | +911.1M
Domino's Pizza Inc | Restaurants
Berkshire Hathaway disclosed a stake in Domino's Pizza Inc, acquiring approximately 1.3 million shares valued at around $550 million as of September 30, according to a regulatory filing made public yesterday. This announcement prompted a significant market response, with shares of Domino's rising sharply in after-hours trading, reaching highs of $469.00. Year-to-date, Domino's stock has outperformed the S&P 500 Restaurants Sub Industry index. Social media buzz surrounding Warren Buffett's investment has fueled excitement, with discussions noting that his stake represents a 3.6% ownership in the company. Users shared charts and commented on the implications of Buffett's strategic focus on high-margin businesses, particularly amidst his reductions in stakes in other holdings.

ULTA | -5.1%| -886.1M
Ulta Beauty Inc | Other Specialty Retail
Ulta Beauty Inc. shares are down significantly in pre-market trading, following Berkshire Hathaway's decision to reduce its stake by 96.5%, leaving just 24,203 shares. This drastic divestment comes only three months after Buffett's initial investment, prompting surprise and discussion on social media platforms. The stock price has dropped to $361, reflecting a nearly 6% decline. Additionally, Ulta had previously lowered its full-year sales and profit forecasts due to weakening demand for higher-priced cosmetics and perfumes. Over the past three months, the median price target among analysts has decreased from $490 to $400. Year-to-date, Ulta's stock has experienced a notable decline of 22%.

PLTR | +2.0%| +2.7B
Palantir Technologies Inc | Application Software
Palantir Technologies Inc. is experiencing a positive pre-market session, with its stock rising following the announcement of its transfer to the Nasdaq Global Select Market, effective November 26, 2024. This move is anticipated to enhance eligibility for inclusion in the Nasdaq-100 Index, which holds significant assets under management. The company recently hosted its inaugural Developer Conference, showcasing product launches such as Ontology SDK 2.0 and new Platform APIs, attended by 150 participants from various sectors. Additionally, Jericho Capital Asset Management acquired a substantial position in Palantir, purchasing over 3 million shares. Social media discussions reflect optimism regarding these developments, particularly the implications of the stock's potential inclusion in popular tech-focused ETFs. After-hours trading indicated a notable increase in Palantir's stock following these announcements.

BABA | +1.6% | +28.7B
Alibaba Group Holding Ltd | Broadline Retail
Alibaba Group Holding Ltd reported its fiscal second-quarter results, revealing adjusted earnings per American Depositary Share of 15.06 renminbi, surpassing analysts' estimates. Revenue reached 236.50 billion renminbi, falling short of forecasts amid ongoing economic challenges in China. The international digital commerce segment experienced a significant revenue increase, while the Cloud Intelligence Group reported year-over-year growth. The company engaged in substantial share repurchases, reducing total shares outstanding by 2.1%. Social media discussions highlighted a positive outlook for Alibaba, particularly regarding strong performance during the Double 11 shopping festival. Influential investors are adjusting their positions in Chinese stocks, including Alibaba, as the company considers a bond offering in a favorable yield environment.

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