With the Thanksgiving Day holiday quickly approaching, one might think that there isn’t a lot to talk about when it comes to news affecting the stock market. That isn’t the case.
There has been quite a bit of news since yesterday’s close, and for the most part, it is news for which market participants can be mostly thankful.
To begin, NVIDIA (NVDA) stayed true to its AI self and blew past analysts’ high expectations for fiscal Q3 revenue and earnings. Just as important, NVIDIA provided Q4 revenue guidance well above the consensus estimate and said that, while U.S. export curbs to China are adversely affecting sales there, that is being more than offset by strong growth in other regions.
Shares of NVDA are up “only” 0.6% in pre-market action, but considering they had risen 25% from their October 26 low going into the report, that small gain still registers in a big way for a market that has enjoyed its leadership.
It is possible that gain fades away in today’s trading in some sell-the-news action, but even if it does, NVDA proved its mettle with its latest report, which has helped overshadow some disappointing results and/or guidance from other companies like Autodesk (ADSK), Deere (DE), HP, Inc. (HPQ), Jack in the Box (JACK), and Guess? (GES).
Currently, the S&P 500 futures are up 15 points and are trading 0.4% above fair value, the Nasdaq 100 futures are up 76 points and are trading 0.5% above fair value, and the Dow Jones Industrial Average futures are up 49 points and are trading 0.2% above fair value.
Other news of note includes reports that Sam Altman is returning to OpenAI as CEO, that Israel and Hamas have agreed to a four day pause in fighting that is part of a hostage release deal, and that OPEC+ is delaying its weekend meeting, without explanation, until November 30.
Bloomberg reported earlier that Saudi Arabia has expressed dissatisfaction with other members’ oil production levels. Whatever the case may be, WTI crude futures are down 3.9% to $74.74 per barrel, which is a nice site for the airlines to see, as well as for consumers to see as they set their sights on Black Friday shopping, envisioning lower gas prices.
There was some good news to see in the latest mortgage applications index. It was up 3.0% week-over-week with refinance applications up 2% and purchase applications up 3%. That good news stemmed from the drop in mortgage rates in recent weeks that has coincided with the drop in market rates.
The 10-yr note yield, which peeked above 5.00% in late October, saw 4.36% this morning before climbing to 4.40% following some other data this morning.
Specifically, initial jobless claims for the week ending November 18 decreased by 24,000 to 209,000 (Briefing.com consensus 227,000) while continuing jobless claims for the week ending November 11 decreased by 22,000 to 1.840 million.
The key takeaway from the report is that this report covers the period in which the survey for the November employment report is conducted, so the low level of initial jobless claims should support expectations for some decent growth — certainly at this point in the Fed’s tightening cycle — for nonfarm payrolls.
Durable goods orders for October, meanwhile, declined 5.4% month-over-month (Briefing.com consensus -3.1%) following a downwardly revised 4.0% increase (from 4.7%) in September. Excluding transportation, durable goods orders were flat month-over-month (Briefing.com consensus 0.2%) following a downwardly revised 0.2% increase (from 0.5%) in September.
The key takeaway from the report rests in the recognition that nondefense capital goods orders, excluding aircraft — a proxy for business spending — dipped 0.1% month-over-month following a 0.2% decline in September. That isn’t a major drop-off by any means, but it does fit with a softening environment in the manufacturing space.
Happy Thanksgiving! As a reminder, the market is closed Thursday and will close early at 1:00 p.m. ET on Friday.
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Originally Posted November 22, 2023 – Feeling mostly thankful
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