Market Overview
Thursday’s market session saw significant gains across Wall Street, driven by cyclicals such as financials, industrials, and retailers. Equities surged broadly, while the technology sector underperformed. The S&P 500 extended its winning streak to four days, buoyed by strength in stocks like Deere, Caterpillar, and Goldman Sachs. This rotation into economically sensitive sectors reflects optimism about a warming U.S. economy, similar to trends observed post-election and in autumn.
Mega-cap tech shares, including Microsoft and Alphabet, lagged, hinting at a potential broadening of market participation. Nvidia’s post-earnings performance showcased mixed investor sentiment—stellar revenue and earnings exceeded expectations, but tempered guidance led to initial selloffs before shares turned positive. The PHLX Semiconductor Index rose slightly, reflecting optimism about AI-driven growth. Wedbush analysts praised Nvidia’s “flawless” results, emphasizing strong data center growth and the rapid ramp-up of its Blackwell chips.
On the macroeconomic front, expectations of a Federal Reserve pause in December gained traction as recent Fed commentary balanced cautious optimism with data dependency. Treasury yields rose modestly, while utilities—surprisingly—led all sectors, likely driven by AI-related demand expectations. Meanwhile, Bitcoin surged toward a record $100,000, cementing its relevance in diversified portfolios amid Wall Street’s cyclical revival.
Latest Market Update
U.S. Markets
U.S. equity futures held steady on Friday morning, signaling a positive market open with major indices poised to end the week higher. This momentum was driven by strength in cyclical stocks and upbeat earnings reports from Gap and Ross Stores.
Asian Markets
Most Asian shares rose on Friday, led by Japan’s Nikkei and South Korea’s KOSPI, buoyed by strength in chipmaking equities. Chinese markets underperformed, weighed down by mixed economic data. Japan reported rising inflation but weak business activity, while Australian equities gained on a shift into cyclical sectors.
European Markets
European equities closed higher on Thursday, with the Euro Stoxx 50 climbing 0.6%. Tech giants like ASML, SAP, and Adyen led gains, while insurers Allianz and Munich Re also posted strong performances.
Currencies and Commodities
The U.S. dollar hovered near a 13-month high on Friday, supported by strong economic data and uncertainty over the Federal Reserve’s rate path. The euro remained subdued at $1.0475 due to geopolitical tensions and political uncertainty in Europe.
Oil prices rose, heading for a robust weekly gain as heightened Russia-Ukraine tensions and potential supply disruptions outweighed concerns about rising U.S. inventories. Reports of OPEC+ potentially delaying production hikes further supported prices, alongside bargain buying after October’s declines.
Equities on the Move
Top Movers
- Gap Inc.: Shares jumped 15% in extended trade after the company raised its full-year sales forecast. Strong sales growth, particularly in Old Navy and Athleta, was driven by fresher, trendy items and reduced discounts.
- Intuit Inc.: Reported a 10% revenue increase to $3.28 billion, fueled by AI-powered financial tools. Despite the earnings beat, shares fell over 8% in extended trading due to warnings about a decline in Consumer Group revenue linked to changes in retail promotions.
- Deere & Co.: Surpassed quarterly earnings expectations but forecasted lower-than-expected profits for 2025 due to declining farm incomes and high interest rates. Shares still rose 8% as lower production costs helped cushion the impact.
Other Notable Stock Movements
- SharkNinja: Shares rebounded 5.5% despite allegations of poor governance and related-party transactions.
- Elf Beauty: Recovered from an initial 16% drop following short-seller allegations of inflated revenue and inventory. The company called the claims “without merit,” and analysts reaffirmed growth prospects.
- Nvidia: Wedbush analysts praised Nvidia’s “flawless” first-quarter results, highlighting data center growth and the rapid ramp-up of Blackwell chips. Despite slight post-earnings dips, analysts remain bullish and expect Nvidia to hit a $4 trillion market cap by 2025.
- Palo Alto Networks: Wells Fargo raised its price target to $450 after strong first-quarter results and growth from its “platformisation” strategy. Despite weaker-than-expected billings, the dip is seen as a buying opportunity.
- Ulta Beauty: Downgraded to “market perform” by William Blair due to slower recovery in the beauty sector and concerns about competition from online retailers.
- Bayer AG: UBS cut its price target to €22 from €30 after mixed third-quarter results and a weak 2025 forecast. Challenges in its pharmaceutical and seeds divisions contributed to the downgrade.
Upcoming Data and Events
Key data releases to watch:
- University of Michigan Consumer Sentiment (November): Inflation expectations will be a focal point.
- S&P Global PMI: Anticipated to reveal divergence between manufacturing contraction and robust services growth.
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