Trading Observations

• After the big move, some consolidation not surprising

• CPI came right inline, hopefully bond yields can settle in

• 6000 resistance.  5875 support

• II Bulls up to 60.3% - first time crossing the 60% headwind threshold

Upgrades – BKU, BMY, CCCS, CMI, EQR, ONON, PCAR, PFE, TKR, TSN, DSP

Downgrades – MASS, AE, WMS, ANGI, ARCH, BCAB, CPT, CCLD, CAT, COTY, DOCS, ETN, ESAB, FTNT, ITW, IP, PGNY, RAPT, ROK, SVRA, SHOP, SOUN, SPOT, SBUX, SYRS, TNK, TSLA

Futures

DOW +8

S&P +2

Nasdaq -12

10-Year Yield

Oil

Consumer/Financial Healthcare

RKT – Down 8% on worse than expected revenue. Mortgage rates continue to do damage.

PAY – Up 25% after the Cloud Based Bill Pay co. announced revenue up 52% y/y.

DAVE – Digital Banking small cap name Up 34% after pushing more into profitability and announcing a new bank partnership. Look out for these banks built without legacy systems.

SCHW- JPM expects Thursday’s monthly October release to be a negative catalyst on lower bank deposits.

MA – MasterCard Analyst Day today – Feels like a crowded room. Stock is up 1% on release of the deck which targets mid-teens EPS CAGR for 2025-2027.

BKU – Upgraded to overweight at WFC.

Tech Office Space – Leases highest in 3 years over Q3 – WSJ. HPP, which is a West Coast Office REIT did report and is up 3% but the stock has been trounced. Nothing in the report is anything but ok.

CAVA jumps 17% after the Mediterranean restaurant chain increased its annual projections for comparable sales.

Technology

GOOGL’s Waymo expanded its driverless taxi service throughout a larger portion of Los Angeles (Barron’s) ... (2)RIVN: VW increased the size of its planned investment in a JV with Rivian to $5.8B (up from $5B) and said the first vehicles utilizing Rivian technology could arrive as soon as 2027 (CNBC)

Apple Inc. is preparing to unveil a new smart home AI hub, codenamed J490, which aims to bring video calls and smart gadget control directly to your wall. This upcoming AI hub is Apple's strategic foray into the competitive smart home market, setting its sights on rivals like Google's Nest Hub and Amazon's Echo Show. Apple's reported new smart home device will use its AI to help it catch up with Google [yahoo.com]

CART: -7% 4Q guide disappointing implying a decel to ~9.6% GTV vs +11% in 3Q, EBITDA inline with buy side. Not enough for name that has run into print ... Q3: Order growth +10% (Q2 +10%) and GTV growth +11% (guide +8-10%, buyside 11%+), EBITDA $227m/2.7% mgn vs guide $205-215m; Guide: Q4 GTV growth in the +8-10% range (St +9%, buyside +10% high-end), and EBITDA $230-240m vs St $244m

CRM – Raised to positive at OTR

CYBR is up 7%, after the security software company reported third-quarter results that beat expectations and raised its full-year forecast.

IPO HEADLINES: Klarna files for an IPO in the US (WSJ); implied valuation $14.6B .... Databricks isn’t considering an IPO anytime soon and could raise funds at a valuation of $55B+ (The Information)

NFLX: hitting ALL-TIME HIGHS as they announced 70M ad MAUs up from 40M in May, and that it sold out all available in game inventory for two live NFL games on X-Mas day. Also rallying into Jake Paul v Tyson this weekend. Catalysts playing out as expected here

NVDA: IBM is in talks to secure access to Nvidia GPUs via AWS in a deal worth nearly $500MM over 5 years (Business Insider)

SMCI: -4.4% cant file 10-Q as needs more time for new auditor.... subsquently it faces delisting next week if they can't prove the facts of their accounting

OKLO gains 12% after the company secured partnerships to provide up to 750 megawatts of power for US data centers.

SWKS: -7% another non-AI semis miss ... provided guidance for the Dec Q that fell short of expectations, but the miss wasn’t as large as it was at QRVO

ZI: -14% not guiding to 2025 - "you should expect a very conservative approach to our guidance communications going forward in general, but particularly as we navigate this SMB transition" ... Copilot surpassed $60M ACV in the quarter; up from $18M in Q2

Industrials 

OXY reported solid EPS upside at 1.00 (vs. the Street 76c), and they exceeded expectations on production and free cash flow too. Total average global production of 1,412 thousand barrels of oil equivalent per day (Mboed) for the third quarter of 2024 exceeded the mid-point of guidance by 22 Mboed, led by Permian.

SAVE (Spirit) slumps 62% as the company closes in on a deal with creditors that would restructure its crushing debt load in bankruptcy court after discussions for a tie-up with rival Frontier Group Holdings fell apart.

BA delivers fewest planes since 2020 https://www.cnbc.com/2024/11/12/boeing-airplane-deliveries-october-strike.html [cnbc.com]

Rivian / Volkswagen joint venture deal has increased to up to $5.8B https://www.theverge.com/2024/11/12/24294827/vw-rivian-joint-venture-leadership-ev [theverge.com]

The strengthening of RIVN's balance sheet, validation from VW's confidence in RIVN technology, shared cost structure, and access to VW's scale/expertise are all positives in our view.

TSLA said it was recalling 2,431 Cybertruck electric pickup trucks in the United States as loss of drive power could increase the risk of a crash, in its sixth such move this year.

TSLA gains 1.6% and Roivant (ROIV) rises 3% after President-elect Donald Trump picked billionaire Elon Musk and entrepreneur Vivek Ramaswamy to lead a new department that will aim to make the government more efficient.