Market overview going into Turkey Weekend
Market overview going into Turkey Weekend
Swaggy's Top Stonks
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Swaggy's Top Stonks
Together with... The Motley Fool
November 25, 2021
Welcome newcomers to Swaggy's Top Stonks and thank you for subscribing.
Hope everyone is having a great Thanksgiving and enjoy the shortened trading week.
Today's edition will have a bite-sized market break-down of everything relevant going into tomorrow and next week.
This is a new format and if you like it (or hate it) then shoot us a reply to this email!
Today's Letter
Market Break-down
U.S Equity Market
News Stories Moving Markets
Notable Market Movers
Analyst Downgrades/Upgrades
Crypto
Trending Tickers
U.S Equity Market
As a reminder, the market will reopen on Friday with a 1:00 p.m. ETclosure.
· S&P 500 +25.2% YTD
· Nasdaq Composite +22.9% YTD
· Russell 2000 +18.1% YTD
· Dow Jones Industrial Average +17.0% YTD
The S&P 500 gained 0.2% on Wednesday, overcoming an early 0.7% decline, as the market adjusted to the thought of the Fed tightening policy more aggressively. The S&P was up 29bps from the European close to finish ¼ % higher on the day (4,701). The index shrugged off early losses and rallied closing at the intraday highs after a lower PCE and hawkish Fed minutes.
The Nasdaq Composite (+0.4%) and Russell 2000 (+0.2%) also completed their own comebacks, while the Dow Jones Industrial Average (-0.03%) closed fractionally lower.
Six of the 11 S&P 500 sectors closed lower while five closed higher. The real estate (+1.3%) and energy (+1.0%) sectors outperformed in positive territory. The materials (-0.7%) and consumer staples (-0.3%) sectors underperformed with modest declines.
Expectations for a more aggressive Fed were corroborated by the latest economic data and Fed commentary: the FOMC Minutes from the November meeting noted that "some participants preferred a somewhat faster pace of reductions that would result in an earlier conclusion to net purchases." Weekly initial claims (199,000) fell to their lowest level since Nov. 15, 1969. The Fed's preferred inflation gauge in the PCE Price Index was up 5.0% yr/yr in October.
The market had already been pricing in this thinking, but it's worth noting that the probability for a rate hike in May 2022 increased to 54.9%, versus 45.4% yesterday, according to the CME FedWatch Tool. The fed-funds-sensitive 2-yr yield rose three basis points to 0.64%, leaving it up 13 basis points since Friday.
The 10-yr yield declined two basis points to 1.65% after brushing up against 1.70% in the morning. The turnaround in the 10-yr yield was cited as a supportive factor for the rebound in the growth stocks, after the tumultuous start to the week for growth stocks as long term rates rose 9bps on Mondaypost Fed chair Powell’s nomination for second term.
Tech rebounded, ending in positive territory after languishing in negative territory for much of the day. Services the leader today and Software the laggard, weighed down by ADSK (15.5%) on below-consensus guidance.
Overnight USD has drifted, treasuries are unchanged and commodities are mixed. WTI crude futures were unchanged at $78.37/bbl.
Initial jobless claims hit a 52 year low and fell 71K w/w to 199K, beating estimates for 265K and lowest since 1969. However some early reads pointed to impact of seasonal adjustments (claims were up 18K w/w excluding seasonal adjustments)
New home sales increased 0.4% month-over-month in October to a seasonally adjusted annual rate of 745,000 from a downwardly revised 742,000 (from 800,000) in September. On a year-over-year basis, new home sales were down 23.1%.
(Source: FinViz)
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News Stories Moving Markets
Pinterest to spend $50M to settle discrimination suit filed by holders - Business Insider
Citing terms of the settlement announced post-close by Rhode Island Treasurer SethMagaziner, Business Insider reports that the company is committing $50M to diversity, equity, and inclusion reforms, and it won't enforce NDAs for ex-employees speaking out about mistreatment or harassment in the workplace
Apple: UBS analyst noted modest improvement in wait times for iPhone 13 Pro Max in all key regions. A positive data point for Apple in China with implied shipments for October +85% y/y to the highest total since 2014, from the China
ByteDance is seeking capital to build China's answer to Zillow. - Bloomberg
Twitter updates iOS app to stop tweets disappearing mid-read. - The Verge
Bank regulators will team up to develop crypto rules next year. - Washington Post
Jack Ma's Ant rebrands some credit offerings as part of overhaul. - WSJ
JP Morgan analysts estimate that Amazon will surpass Walmart as the largest retailer in 2022
Stripe ‘Happy’ to Stay Private After Reaching $95 Billion Value -Bloomberg
Notable Market Movers
Notable Gainers
+15.8% ~GLBE~ (Global-e Online): acquiring Flow Commerce, technology based cross-border e-commerce software solutions company, for up to ~$500M. Company will issue to Shopify a warrant for ~$70M in Global-e shares.
+13.5% ~PSTG~ (Pure Storage): 3Q revenue and EPS were above consensus. 4Q revenue guidance was above consensus. Management raised FY22 revenue and operating income guidance
+10.1% ~HPQ~ (HP, Inc.): 4Q revenue and EPS were above consensus. 1Q and FY22 EPS guidance were ahead of consensus
+8.0% ~NTNX~ (Nutanix): 1Q revenue and EPS were above consensus. 2Q revenue and ACV billings guidance was above consensus. FY22 revenue guidance was ahead of consensus.
+4.8% ~DELL~ (Dell Technologies): 3Q revenue and EPS were above consensus. 4Q revenue and EPS guidance were ahead of consensus
+2.7% ~SPOT~ (Spotify Technology): initiated at buy at Benchmark, $300 target.
Notable Decliners
-15.5% ~ADSK~ (Autodesk): 3Q revenue and EPS were above consensus. 4Q revenue and EPS were below consensus. Management narrowed FY22 revenue guidance and raised EPS guidance.
-15.1% ~PLAN~ (Anaplan): 3Q revenue and EPS were above consensus. 4Q revenue guidance was ahead of consensus. Management raised FY22 revenue guidance. Downgraded to neutral from overweight at Piper Sandler.
-24.1% GPS (Gap): significantly lagging a weaker softline retail segment after reporting earnings, revenue, and comps below consensus while lowering FY22 below given continued supply/inventory constraints. Commentary mostly negative including a downgrade to neutral from overweight at JPMorgan, noting the path to 10% operating margins by FY23 appears more challenging.
Analyst Downgrades/Upgrades
Initiations
Spotify initiated at Buy at Benchmark with $300 price target
Upgrades
Nutanix price target raised to $71 from $64 at Needham. Reiterates Buy
Etsy price target raised to $310 from $264 atWedbush. Outperfrom rating maintained
Etsy price target raised to $320 from $245 at Citi. Buy rating maintained
Autodesk price raised to $344 from $324 at Morgan Stanley. Maintains Neutral
ZScaler price target raised too $400 from $325 at Deutsche Bank
Salesforce price target raise to $360 from $330 at Bank of America. Reiterates Buy
Matterport price target raised to $34 from $25 at Credit Suisse. Maintains Outperform rating
Downgrades
Anaplan downgraded to neutral from overweight at Piper Sandler, target to $48 from $77, 8% downside. Cites lower growth estimates for company.
Anaplan price target lowered to $70 from $80 at Canaccord. Maintains Buy
Anaplan price target lowered to $75 from $85 at Wells Fargo. Maintains Outperform
Anaplan price target lowered to $58 from $67 at Goldman Sachs. Maintains Neutral
Anaplan price target lowered to $73 from $80 at Morgan Stanley. Maintains Overweight
Autodesk price target lowered to $310 from $365 at Stifel. Maintains Buy rating
Autodesk price target lowered to $350 from $365 at KeyBanc. Maintains Buy rating
Autodesk price target lowered to $440 from $450 at Credit Suisse. Maintains Outperform
Autodesk price target lowered to $343 from $363 at RBC. Maintains Outperform
Zoom downgraded to Neutral from Buy at Bank of America. Price target down from $385 to $270
Zoom price target lowered to $245 from $275 at Wells Fargo. Maintains Equal Weight
Zoom price target lowered to $235 from $255 at Evercore ISI. Maintains Equal Weight
Zoom price target lowered to $300 from $275 at Stifel Maintains Hold rating
Agora target lowered to $27 from $44 at Needham
CrowdStrike price target lowered to $300 from $320 at Deutsche Bank. Maintains Buy rating
Adidas price target lowered to EUR294 from EUR300 at Credit Suisse. Maintains Neutral rating
Crypto
Bitcoin trading at below its 50day MA
Ethereum bounced off the 50day MA on Wednesday
Image Source: CoinMarketCap
WallStreetBets - Most Mentioned Equities
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