Stock Market Week November 11 – what to expect, how to trade

This article concisely overviews the most significant macroeconomic events from November 11-15 on the stock market. I delve into the potential earnings surprises for the week and dive into exciting stock picks.

Surviving Last Week’s Wild Ride in the Stock Market

First of all, let’s recall what went wrong last week—the week of important U.S. presidential elections. I believe November 4 was a rollercoaster of events that set the stage for a thrilling upcoming week of macroeconomic data releases starting November 11. Let’s dive in.

Stocks Skyrocket in a Week for the History Books

It was a week for the record books, with stocks soaring to dizzying heights. A tidal wave of quarterly earnings, another interest rate cut from the Federal Open Market Committee (FOMC), and the drama of congressional and presidential elections created the perfect storm for a market rally for the ages.

The day after the election, the Dow Jones Industrial Average skyrocketed over 1,500 points, the Russell 2000 surged a whopping 5.8%, the Nasdaq Composite blasted off with a 3.0% gain, and the S&P 500 notched its best post-election performance ever with a 2.5% gain. Investors breathed a collective sigh of relief that the election wouldn’t be contested, and they bet big on President-Elect Trump’s promises to cut taxes and slash regulations supercharging economic growth.

The Trump Effect: Markets Go into Overdrive

The Trump effect was full force, with small-cap stocks, financials, and the U.S. dollar surging. Bitcoin joined the party, and cyclical sectors stole the show.Teslawas one of the week’s biggest winners, with shares rocketing 29.0% higher on hopes that Elon Musk’s Trump support would give the electric car maker an extra boost. I’d like you to please be aware of overvaluation. Do not chase; it is better to buy during the share price weaknesses.

The Fed Gives Markets a Green Light

Thursday’s FOMC policy announcement could have thrown cold water on the rally, but instead, the Fed gave markets the green light to keep charging ahead. The unanimous decision to cut interest rates by 25 basis points to 4.50 from 4.75% was no surprise, but what Fed Chair Powell didn’t say spoke volumes. He left the door open for another rate cut at the December meeting, and his upbeat assessment of the economy and the Fed’s policies had investors cheering.

NVIDIA and Sherwin-Williams Join the Dow’s Exclusive Club

In a changing of the guard, NVIDIA (NVDA) and Sherwin-Williams (SHW) replaced Intel (INTL) and Dow Inc. in the Dow Jones Industrial Average starting on Friday, November 8. The shakeup reflects the evolving U.S. economy and the rising stars of the tech and materials sectors.

Monday: A Mixed Bag

Monday was a mixed bag, with investors holding their breath ahead of Tuesday’s election. The major indices ultimately closed in the red, but off session lows. The Russell 2000 bucked the trend, closing 0.4% higher. Losses in mega caps and chipmakers weighed heavily on the market, but the equal-weighted S&P 500 managed a fractionally higher finish.

Factory orders were a bright spot, declining less than expected in September. But the devil was in the details, with transportation equipment orders leading the decline. Shipments of manufactured goods also fell, signaling softening demand.

Tuesday: Election Day Optimism

Election Day brought a wave of optimism, with the S&P 500 jumping 1.2%, the Nasdaq Composite gaining 1.4%, the Dow Jones Industrial Average settling 0.4% higher, and the Russell 2000 rising 1.9%. Stocks were already trending higher on the back of a strong ISM Services PMI reading for October, which bodes well for economic and earnings growth. The prospect of election uncertainty lifting also added fuel to the fire.

Earnings were in focus, with Palantir Technologies, DuPont, and GlobalFoundries registering big gains. The trade deficit widened more than expected in September, but the silver lining was that it reflected a U.S. economy running hotter than its global counterparts. The ISM Services PMI also hit a two-year high, with the services sector firing on all cylinders.

Wednesday: Election Euphoria

Wednesday was a day of election euphoria, with the news of Donald Trump’s presidential victory and expectations of a Republican-controlled House and Senate sending markets into rally mode. The Dow Jones Industrial Average, Nasdaq Composite, S&P 500, and S&P 400 all hit record highs.

Tesla was one of the biggest winners, capitalizing on hopes that Elon Musk’s Trump support would be a boon for the company. Small-caps, financials, the U.S. dollar, and bitcoin were also along for the ride, and cyclical sectors outperformed. Treasuries were sold, sending yields soaring.

Thursday: The Fed Fuels the Rally

Thursday’s FOMC policy announcement could have derailed the rally, but instead, the Fed gave markets more reason to cheer. The unanimous decision to cut interest rates as expected was no surprise, but Fed Chair Powell’s press conference was music to investors’ ears. He left the door open for another rate cut in December and marveled at the strength of the economy and the Fed’s policies.

The S&P 500 and Nasdaq Composite pushed further into record territory, while the Dow Jones Industrial Average closed little changed. The Russell 2000 pulled back 0.4% after Wednesday’s 6% surge. Treasury yields, which moved to session lows during the press conference, settled near intraday lows, with the 10-yr yield dropping nine basis points to 4.34% and the 2-yr yield falling five basis points to 4.22%.

Initial jobless claims were steady, with layoff activity remaining calm but hiring slowing. Productivity growth helped keep labor costs in check, and wholesale inventories fell more than expected in September.

Friday: A Record-Breaking Finish

The week ended on a high note, with the S&P 500 trading above 6,000 for the first time and the Dow Jones Industrial Average breaking above the 44,000 mark before settling off session highs. The Nasdaq Composite closed little changed, weighed down by losses in some mega-cap names. The 10-year yield dropped four basis points to 4.31%.

Consumer sentiment was the silver lining, with the University of Michigan’s preliminary reading showing consumers were already feeling more upbeat about their income prospects and short-run business conditions before the election results.

The Emotional Roller Coaster Ride of the Week of November 11

Be prepared, because the next week will be an exciting ride on the economic front lines. A slew of market-moving macroeconomic events is set to drop, and we’re about to dive into what you need to know.

Monday, November 11: The Calm Before the Storm

Please hold onto your hats because Monday is shaping up to be a fairly chill day. We’re not expecting any earthshaking macroeconomic data, so the market should hum along quietly with lower volatility and medium trading volume. Think of it as the calm before the storm…

Tuesday: Germany Takes the Spotlight

Tuesday, on the other hand, is when things start to get interesting. It’s typically a turnaround day, marked by ramping up trading volumes and higher volatility. All eyes will be on the German CPI data for October. The crystal ball is currently pointing to a 0.4% increase, but if that number gets blown out of the water, European markets could be in for a rough ride. With Germany’s political situation adding to the economic uncertainty, it’s no wonder German stocks are already feeling the heat.

Wednesday: The U.S. Core CPI Takes Center Stage

But the real main event goes down on Wednesday when the U.S. Core CPI data drops. As of now, the market consensus is betting on no changes to the MoM CPI rate, with Core CPI sticking at 2.4% in October. But don’t be fooled – this data has the potential to send shockwaves through the stock market, offering up crucial clues about a possible interest rate cut in December 2024.

Thursday: Volatility Day

By the time Thursday rolls around, prepare for increased volatility in the stock market because it’s about to get real. The U.S. initial jobless claims report and U.S. PPI data are both set to drop, providing a one-two punch of market-moving info. But the pièce de résistance is Jerome Powell, the Fed Chair, taking the stage with a highly anticipated speech. Investors will hang onto his every word for hints about 2025’s interest rate policy and the possible size of that December rate cut.

All eyes will be on Federal Reserve Chair Jerome Powell when he steps up to the mic on November 14, 2024. The market is hungry for clues about where the Fed’s monetary policy is headed, and Powell’s speech promises to be a main course event. Here’s what’s at stake, based on recent developments and what the market is craving:

Will the Fed Keep Cutting Rates?
The Fed has already given us a taste of rate cuts, trimming its target range to 4.5% from 4.75% last week. Now, the market is salivating for more, pricing in a near-lock that the benchmark rate will fall further. Powell’s speech is our chance to determine if the Fed will serve up more rate cuts, and if so, how much and how fast.
Powell’s Take on Inflation
Powell has acknowledged that inflation is declining, and the job market has cooled off. But we’re all eager to hear his latest assessment. Will he give us reason to believe that inflation is trending in the right direction, and how will that shape the Fed’s next moves?
A Stronger Economy Ahead?
There are whispers that the U.S. economy could be more robust next year than we thought. Powell has hinted at this, and now we need him to spill the details. How will the Fed’s updated economic outlook guide its policy decisions, and what does it mean for us?
The Fed’s Balancing Act
Powell has given us a glimpse into the Fed’s thinking – if the economy hums along and inflation stays in check, the Fed can ease off the brakes. But we need more. How will the Fed juggle keeping inflation at bay with nurturing economic growth? We’re counting on Powell to paint a clearer picture.
The Global Factor
The title of Powell’s speech, “Global Perspectives with Federal Reserve Chair Jerome Powell,” suggests that he will explore how global economic trends shape U.S. monetary policy. In a world that is more interconnected than ever, this could be a revealing discussion.
The Main Event
Jerome Powell’s speech won’t just be a dry recitation of facts and figures. It will be a closely parsed event that could set the tone for the Fed’s policy trajectory and, by extension, the health of the U.S. economy. The Fed’s dual mandate of maximizing employment and keeping prices stable hangs in the balance. So, it is critical to watch what Mr. Powell will tell us. This could be an exciting ride.

Friday: U.S. Retail Sales Take the Spotlight

Finally, Friday brings us the U.S. retail sales data, giving us a window into the consumer purchasing power trends. This is mission-critical intel for anyone looking to maximize their short-term exposure and ride that December stock market rally like a pro.

So, there you have it. The week of November 11 is shaping up to be a doozy. Stay tuned for more analysis as these events unfold!

Earnings Surprises Abound: The Most Exciting Third Week Reports

Last week, the election stole the spotlight, but don’t think for a second that earnings took a backseat. This past week was a whirlwind of reports; we’re still reeling. A whopping 90% of S&P 500 companies have dropped their Q3 numbers, giving us a lot to chew on.

So, how’s the health of Corporate America?The diagnosis is… decent.FactSettells us that 75% of companies managed to surpass the expectations of those pesky Wall Street analysts. But before celebrating, consider this: that number falls short of the 77% five-year average. And it gets even more interesting.Those earnings beats?They weren’t exactly blowouts. Companies exceeded estimates by a mere 4.3%, a far cry from the 8.5% five-year average and the 10-year average of 6.8%.

The bottom line?S&P 500 companies are poised to post a respectable 5.3% earnings growth for Q3, marking the fifth consecutive quarter of year-over-year growth. But here’s the kicker: with indexes soaring to record highs, investors are paying a premium for that growth. The S&P 500 trades at a frothy forward 24.3 times earnings estimates, dwarfing the five-year average of 20.2 times.

So, when earnings season kicks off again on November 11, we should be prepared for what promises to be a thrilling (and potentially gut-wrenching) ride.

This week is shaping up to be another busy one for earnings. As usual, many companies will release their Q3 2024 financial results during the week of November 11. I’ll highlight the most exciting forthcoming earnings to watch.

Monday: MNDY, ZETA, LYV

Tuesday:SHOP, HD, SE, ONON, HTZ, MOS,SOUN,MARA, CAVA,SPOT, CART

Wednesday:CYBR,CSCO, BZH,LYFT

Thursday:DIS, JD, LUNR, NICE,AAP, QBTS,AMAT, OKLO,BILI

Friday:BABA

Looking more forward into the end of November 2024

Historically, November 5th to December 31st has been a sweet spot for investors.CNBC reportsthat the S&P 500 has averaged a 2.68% gain during this time frame, going back to 1928. The Nasdaq has also typically joined in on the upward trend.

But before you get caught up in the excitement, remember: past performance is no guarantee of future success. It’s crucial to approach those soaring stocks with a critical eye, especially if they seem overvalued compared to their realistic growth potential.

So, where should you put your money as we enter the later stages of this bull market? Look for undervalued gems that are highly likely to smash earnings expectations in Q4 2024 and into 2025. Those are the stocks that could help your portfolio truly shine.

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Diving into Exciting Picks

Get ready for a thrilling week of earnings reports!As you can see from the earnings calendar above, things are keeping busy. But don’t worry, I’ve got you covered. I’ve picked out the companies that look the most exciting from an investing point of view.

Keep a Close Eye on Shopify This Week

Watch for a potentialexplosionof growth whenShopify Inc. (SHOP)unleashes its Q3 2024 financial results on November 12, before the market even has its morning coffee. Analysts are predicting a stunning 13.9% YoY surge in EPS to $0.27 and a mind-blowing 24.1% YoY jump in revenue. That’s leaps and bounds above the peer group average, cementing SHOP’s position as the undisputed internet infrastructure services industry king.

So, let’s analyze what’s fueling thisrocket ship. For starters, Shopify’s Gross Merchandise Volume (GMS) issoaringlike an eagle, thanks to more merchantsflockingto the platform and transaction volumesswellinglike a tidal wave. And with the continuedinfiltrationof Shopify Payments, more and more transactions aregreasing the wheelsof Shopify’s payment gateways,superchargingrevenue. But that’s not all – anarmadaof merchants, combined withshrewdpricing increases on subscription plans, ispouring gasolineon the fire of revenue growth from subscription solutions.

And let’s not forget thesecret weaponin Shopify’s arsenal: innovation.Magic makerslike Shopify magic and Sidekick arewaving their wands, leveraging AI tocast a spellof improved merchant productivity and customer experience. Thesegame-changinginnovations arepoised to be the fairy dustthat takes Shopify’s growth tostratospheric heights.

With all thesepowerful tailwindsat its back, Shopify’s earnings report isset to be a must-see spectacle. As someone who’sbeen along for the ridesince summer 2024, Ican’t wait to tune into the conference call andget a glimpseinto the company’s future. But I’m not wearingrose-colored glasses– there arestorm cloudson the horizon, and they’reemblazoned with a giant T.

The Trump administrationcould be awild card. While SHOP’s Canadian roots make it less vulnerable to U.S. domestic policies, broader economic moves like tariffs and regulatory shake-ups could stillsend ripplesthrough the ecosystem. For instance, anytrade war fireworkscoulddisrupt the supply chain partyand increase merchant costs. And let’s not forget – Shopify hasalready tangledwith Trump, shutting down his online stores due to policy violations. Those are thelandmineswe need tonavigate with care.

Still, I’ve got abullseye on my heartfor Shopify, especially as wesprint into the home stretchof 2024. Bring on the earnings report!

Watch for a visible price action for SoundHound (SOUN)

Expect a potential fireworks display fromSoundHound AI Inc. (SOUN)when it unleashes its Q3 2024 financial results on November 12 after the market closes.Analysts are forecasting a stunning 24.08% YoY improvement in SOUN EPS to -$0.07, fueled by a revenue surge of 73.56% YoY to $23.0 million – a staggering 59.53% above the peer group average growth.

This isn’t a one-hit wonder.SoundHound has been on a tear for the past three years, with annual revenue surging 326%, leaving the peer group average 3-year revenue growth of 42.33% in the dust.

The company’s financial health is also looking rosy.The current ratio has ballooned to 9.00, a far cry from the 1.7 of Q2 2022.Meanwhile, the Debt-to-Equity ratio has plummeted to 0, a tiny fraction of the 14.4% peer average. And with a quick ratio of 8.77x, SoundHound has plenty of firepower to cover its obligations with the most liquid assets.

But the best may be yet to come.The recent acquisition of Amelia, an enterpriseAIsoftware company, could pour gas on the fire, contributing up to $45 million to SOUN’s revenue in 2025.Collaborations with heavy hitters like Nvidia and Connex2X will supercharge SOUN’s product offerings and market reach.These partnerships will inject SOUN’s AI technology into various sectors, including automotive and customer service.

SoundHound is also laser-focused on cost optimization.The company has converted its preferred equity into common stock and repaid $100 million in debt.With all these pieces falling into place,profitability in 2025 is within tantalizing reach.

And the icing on the cake?SoundHound stands to be one of the biggest beneficiaries under the Trump administration.Tax cuts and innovation incentives could fuel SOUN’s AI business.Trade agreements could unlock new markets for SoundHound’s AI products and services.SOUN could be first in line as the government opens the spigots for AI research and development funding.

So, despite the lofty current valuation, I remain resoundingly bullish on SOUN.This stock is a must-have on every investor’s radar.

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