2023 Nov 30, US Market
Stocks rose late in the day, posting one of the largest November gains on record, fueled by speculation that the Federal Reserve will end its rate hikes and cut rates next year.
The S&P 500's $3 trillion gain this month moved it 5% away from its all-time high. Thursday, the Nasdaq 100 underperformed. The Dow Jones Industrial Average rose, led by gains in Salesforce and Boeing. Ten-year US Treasury yields increased eight basis points to 4.34%. The dollar rose, but it had its worst month in a year.
Consumer spending, inflation, and the labor market in the United States have all cooled in recent weeks, adding to evidence that growth is gradually slowing. The Fed's preferred gauge of underlying inflation, the core personal consumption expenditures price index, met economists' expectations.
Traders continued to monitor the latest remarks from US officials. President of the Federal Reserve Bank of New York, Williams, reiterated that the benchmark lending rate is at or near its peak and that policy is "quite restrictive." His San Francisco counterpart, Daly, said rates are in a "very good place" to control inflation, but she's not considering cuts and said it's too early to tell if hikes are done.
Oil fell as OPEC+'s output cut failed to persuade traders.
Salesforce (CRM) provided a "beat and raise" report for Q3
Snowflake (SNOW) reported upbeat Q3 earnings and revenue and increased its product revenue guidance for FY24
Ford (F) said its new U.S. labor agreement with the United Auto Workers union is expected to cost $8.8B
AbbVie (ABBV) agreed to acquire ImmunoGen (IMGN) for $31.26 per share in cash
Kroger (KR) reported upbeat Q3 earnings and revenue
Nvidia (NVDA) doesn't see the U.S. achieving chip independence for 10-20 years, Bloomberg says
The EU antitrust warning aimed at Adobe's (ADBE) proposed $20B acquisition of Figma will be challenges by the company at a closed hearing, Reuters reports
The federal government of Canada and Google (GOOG) have settled their dispute over the country's Online New Act, CBC News says
Uber (UBER) could be added to the S&P 500 Friday, Barron's says
Xbox (MSFT) is in talks with partners to launch a mobile app store, Bloomberg says
Farfetch (FTCH) increases in New York after Citi upgraded the stock to Neutral
Spirit Aerosystems (SPR) higher after Baird upgraded the stock to Outperform
Xenon Pharmaceuticals (XENE) gains in New York after announcing a $225M share offering
Weibo (WB) declines in New York after announcing a 6.23M share offering
Fastly (FSLY) falls after Chief Revenue Officer Brett Shirk notified the company of his resignation
Victoria's Secret (VSCO) reported Q3 results and provided guidance for Q4 and FY23, with CEO Martin Walters commenting "We delivered third quarter results within our guidance range, and we are encouraged by the improving sales trend as we transition into the all-important holiday season"
Pure Storage (PSTG) reported Q3 results and announced its revenue guidance Q4 and FY24 that both missed consensus
Nutanix (NTNX) announced its Q1 results, with CEO Rajiv Ramaswami commenting "We delivered a solid first quarter financial performance against an uncertain macro backdrop"
Ingersoll-Rand (IR) reaffirmed its FY23 guidance, issued new targets for 2027, and provided guidance for Q4 and FY25
Five Below (FIVE) reported Q3 EPS and revenue that beat consensus and raised its FY23 EPS guidance
Jefferies upgraded Snap (SNAP) to Buy from Hold with a price target of $16, up from $12, as it sees catalysts for revenue growth upside in fiscal 2024. Jefferies has increasing optimism around the recovery in the direct response platform.
Jefferies upgraded Pinterest (PINS) to Buy from Hold with a price target of $41, up from $32, as it sees catalysts for revenue growth upside in fiscal 2024. The upgrade of Pinterest is based on increasing conviction in the company's ability to grow revenue 20%-plus in fiscal 2024, the firm tells investors in a research note.
Bernstein upgraded Restaurant Brands (QSR) to Outperform from Market Perform with an $85 price target. The firm says Restaurant Brands is "reclaiming its magic" following a turnaround that began in 2022.
Citi upgraded Farfetch (FTCH) to Neutral from Sell and removed the firm's price target in light of press reports suggesting Farfetch's Executive Chairman and founder Jose Neves is in talks to take the company private, Farfetch's subsequent cancellation of its Q3 results release and presentation and Richemont's subsequent press release stating its intention not to lend to or invest in Farfetch.
Morgan Stanley upgraded HP Enterprise (HPE) to Equal Weight from Underweight with an unchanged price target of $16. The firm says further multiple compression is unlikely, particularly with the company's longer term enterprise artificial intelligence server opportunity.
Wells Fargo downgraded Okta (OKTA) to Equal Weight from Overweight with a price target of $70, down from $80. The firm believes Okta's focus on margin expansion at a critical time like this is an oversight. KeyBanc, Scotiabank, WestPark, and TD Cowen also downgraded Okta to Neutral-equivalent ratings.
Baird downgraded Petco (WOOF) to Neutral from Outperform with a price target of $3, down from $8, telling investors after management's "latest operational reset" that the timing of profit stabilization and inflection is "proving more elusive than we anticipated."
Barclays downgraded Bilibili (BILI) to Underweight from Equal Weight with a price target of $10, down from $15. The company reported "inline-ish" Q3 results but a weaker than expected Q4 revenue growth outlook now is compounding the challenges Bilibili has been dealing with to fix its long standing bloated cost structure, the firm tells investors in a research note.
BTIG downgraded Farfetch (FTCH) to Neutral from Buy with a $5.50 price target. Given recent events, shares have become almost unanalyzable, and the unexpected possibility the joint venture with Richemont may not close introduces "significant" downside risk, the firm argues.
JPMorgan downgraded Ericsson (ERIC) to Neutral from Overweight with a price target of $5.90, down from $7.80. The firm thinks the first half of 2024 is going to remain challenging for Ericsson despite the company seeing the fruits of its restructuring program announced Q4 of 2022.
HSBC initiated coverage of Molson Coors (TAP) with a Hold rating and $68 price target. The firm thinks sustaining volume growth beyond 2024 for Molson's two big mainstream brands, fixing Blue Moon, and delivering innovation winners might be difficult goals to achieve.
Jefferies initiated coverage of GE HealthCare (GEHC) with a Hold rating and $80 price target. The company is prioritizing a shift to high-growth areas through internal and external investment, and there is a runway for margin expansion, but this is mostly baked into the shares, the firm says.
Raymond James initiated coverage of Ecolab (ECL) with an Outperform rating and $210 price target. The firm says Ecolab's sales to the foodservice, hotel, hospital, and pharmaceutical industries have strong predictability.
Jefferies initiated coverage of Paysafe (PSFE) with a Hold rating and $11 price target. While encouraged by the company's progress, the firm says a near-term share re-rating is unlikely with the company's leverage still elevated, gross margin headwinds in Merchant, and limited visibility into medium term Digital Wallet growth.
Seaport Research initiated coverage of Nuvei (NVEI) with a Buy rating and $25 price target. The firm likes the outlook for Global Commerce, where it sees numerous opportunities for further expansion in volumes and revenues, and also believes the Paya acquisition will catalyze strong future growth in the B2B, Government and ISV channel.