Calendar

This Week – There are 7 Central Bank Rate Decisions this week and the US enters a quiet period for its decision next week. CPI Wednesday is the last important data point. The market likes 25 bps.

Tuesday – Unit Labor Costs

Wednesday – CPI (Important)

Thursday – PPI, Jobless Claims

Friday –

Trading Observations

• Little macro

• AI higher ORCL MDB lower on numbers

• CPI tomorrow – Will be a key number if we get a 25 bps cut next week.

• 6085 resistance, 6010 support...

• Easy to overreact given first hint of selling -  overbought with valuations stretched, momentum worst day of the year (by far) CapitalObserver [x.com] wild really bespokeinvest [x.com]

• Oscillators falling back near neutral

• Once we work off overbought, I think we get a Santa rally before real concern creeps in

Upgrades – AAL, BALL, CIFR, CLSK, CXW, DOCU, GM, GPMT, IPG, JLL, MARA, NCLH, SLG, TRV, UPS, VMEO

Downgrades – AAOI, BIOA, BSIG, CARM, CNC, CCI, DHI, EBAY, FAF, IAC, IREN, MLM, MTG, PTVE, PINS, PGR, RKT, TOL

Futures

DOW -79

S&P +1

Nasdaq +9

10-Year Yield

Oil

BITCOIN

Consumer/Financial Healthcare

MAC – High end mall REIT missed earnings, which were down 14.4% y/y. 2025 should be a lower year as well.

FIS – Baird Fresh Pick Bullish.

Restaurant Data Tracker – Slowdown is evident, albeit somewhat due to weather and November generally stinking.

October RV Retail was +3% y/y, which broke a 40-month streak of declines.

REIT Cash SSNOI growth expected to be 6% at Baird for 2025.

DHI, TOL – Cut to market perform at KBW.

SLG – Upgraded to neutral at JPM after a positive investor day outlook. NYC Office Real Estate clearly may have bottomed.

SYF – Net charge offs for the month came in at 6.2%, a slightly worse result.

GS Retail Trading Themes – They like improving gross margin stories like TGT, BBWI, and DKS, share winners like WMT, DKS, and COST, and less tarrif exposed BBWI, DG, and OLLI.

PINS: -2.3% Piper downgrading; for 2024, 20% rev growth seems unlikely given the Q4 15%-17% guide and its Q1 will likely see growth in the low double-digit range. Says its early read on Performance+ is mixed and as its advertising buyer survey suggests a competitive small-cap advertising field

CASY $4.85 vs est $4.30… Revenue fell 2.7% year-over-year to $3.95 billion to miss the consensus expectation by $70 million. Inside same-store sales increased 4.0% compared to a year ago, while same-store fuel gallons were down 0.6%

AZO comps missed

LLY boosting dividend; announced $15B buyback. BofA reinstates at BUY Rating

Technology

AI/c3.AI: +10% upside in FQ2/Oct on EPS + sales. FY guide update is mixed – see a larger loss (a negative) but slightly higher sales (a small positive). Bulls see momentum across Federal and commercial segments, including new logos and growing client wallet share, as driving growth

Big Tech: Europe probes Google and Meta secret ads deal to target teenage users (FT)

EBAY: -3.5% Jeff cutting to UNDERPERFORM - sees sluggish profit growth and downside to consensus estimates from a deceleration in advertising revenue as well as increased marketing investments

GOOGL: +2.5% from ystrdy - major breakthrough on path toward quantum computing ... Monday alpha outperformance driven by pair unwinds (META/GOOGL again crowded), slightly better yip data, and Willow announcement

MBLY – PT to $24 at Baird. With awards seemingly imminent, MBLY sets up for favorable news flow and continued improved stock momentum through CES/into early 2025

MDB: -7% huge reversal off post mkt highs (16%) … CFO/COO departure overshadowing (heightens execution risk); Atlas grew 26% but below some bullish whispers. Upside came in EA which can be lumpy. Q4 inline-ish with buyside but co’s guide typically viewed as conservative. Contd investment in AI to accelerate legacy app monetization

MSFT: being more explicit in how AI can replace employees and generate cost savings as the firm emphasizes the ROI potential of the software in sales pitches (The Information)

MU: Dept of Commerce has finalized a $6.1B Micron investment in to support the construction of “several state-of-the-art memory chips facilities” (White House)

NVDA: -40bps to start; shrs on 3-day losing streak as stock cont to trade in tight range

ORCL: -8% not enough. Revs missed and IaaS and Cloud came in weaker at +24% vs bogeys at 25%. FQ3 Total Revenue +9-11% ccy, Total Cloud +25-27% ccy; reit FY25 capex doubling y/y .. mgmt talking up the roadmap for future OCI deals; qualitative tone on the call was as bullish as ever – mgmt. remains extremely sanguine on its demand outlook ... Follows 2 prior strong reports + bullish Analyst meeting back in Sept

ORCL/AI Commentary: firm’s AI business remains on fire (“GPU consumption was up 336% in the quarter”), and Oracle insists it remains the preferred cloud platform for AI; Investments in network speed to support expanding GPU clusters will maintain Oracle's AI infrastructure leadership

RDDT: +2% testing a new AI-powered chatbot as the social media company looks for ways to increase user interactions and keep people on its site. The chatbot, called Reddit Answers, will help users find information, make recommendations and surface discussions from across the platform’s forums

TSMC sales rise 34% in November, reflecting sustained growth from AI demand - Bloomey

Industrials 

Alaska Air Group (ALK) publishes presentation for Investor Day; guides Q4 EPS $0.40-0.50 vs prior guidance $0.20-0.40 and FactSet $0.49.

American Airlines Group (AAL) upgraded to outperform from market perform at Bernstein

Ashland (ASH) – Investor Day @ 09:00 ET. Look for slides or press release available prior or in conjunction with the call.

Ball (BALL) Raised to Outperform at Mizuho Securities; PT $67

Boeing (BA) restarted production of 737 MAX last week – Reuters

CleanSpark (CLSK) Raised to Overweight at JPMorgan; PT $17

D.R. Horton (DHI) Cut to Market Perform at KBW; PT $183

Fluence Energy (FLNC) announces intent to offer $300.0M in convertible notes due 2030 in private offering.

GE Vernova, Inc. (GEV) – Investor Day @ 16:30 ET. Look for slides or press release available prior or in conjunction with the call.

General Motors (GM) Raised to Equal-Weight at Morgan Stanley; PT $54

Martin Marietta (MLM) Cut to Neutral at BNPP Exane; PT $650.50

Pactiv Evergreen (PTVE) Cut to Neutral at Citi; PT $18

Parsons (PSN) and V2X form joint venture in pursuit of National Science Foundation Antarctica Contract.

Toll Brothers (TOL) Cut to Market Perform at KBW; PT $164

UPS (UPS) Raised to Outperform at BMO; PT $150