To The Moon

Last Week's Recap

The US Market - The Trump trade faded

• The major averages touched fresh highs on Monday, but the upward momentum saw slowing. The S&P 500 posted a weekly loss of 2.1%, while the Nasdaq Composite slid about 3.2%, with the Trump trade fading.

• Fed Chairman Powell said on Thursday that the central bank wasn’t “in a hurry” to cut interest rates. He noted that the economy’s strong growth will permit policymakers to take their time as they decide the extent to which they reduce rates. Treasury yields rose solidly, to four-month highs, while USD index once reached 107 intraday.

• “While we think the macro backdrop still bodes well for risk assets, in the near term we should expect some micro volatility, particularly around potential policy shifts under a new administration,” said Kristy Akullian, head of iShares investment strategy, Americas, at BlackRock. “We expect the U.S. equity market to continue to move higher, but don’t expect that rise to happen in a straight line.”

• Bitcoin surged above $80,000 and then $90,000, topping $93,000 for a record before backing off to $90,000.

The US Sectors & Stocks - Biotech tumbled

• The only sectors that ended the week in the green were financials and energy, which were up 0.9% and 0.3%, respectively. The healthcare sector lost 6% on the week, making it the worst-performing group in the S&P 500.

• The information technology sector was also down 3%, as NVDA, META, GOOGL and MSFT lost. Tesla (TSLA) was a rare exception among its "Magnificent Seven" peers, as shares of the electric vehicle giant were higher by 2.3% for the week.

• President-elect Donald Trump said that he planned to nominate vaccine skeptic Robert F. Kennedy Jr. to lead the U.S. Department of Health and Human Services. The SPDR S&P Biotech ETF (XBI) tumbled more than 5% and posted its worst week since 2020. Amgen (AMGN) was down about 12%, Pfizer (PFE) fell 4.7%, and Moderna (MRNA) was off by 7%.

• Coinbase (COIN) gained for another strong week with a 13% up, as bitcoin surpassed 90,000.

• Palantir (PLTR) continued to rise 13% on a plan to transfer its listing to the Nasdaq from the New York Stock Exchange on Nov. 26. Upon transferring, Palantir said it anticipates meeting the Nasdaq-100 eligibility requirements.

• Domino's Pizza (DPZ) fell 1.3%, despite Berkshire Hathaway (BRK.B) buying 1.3 million shares of the pizza chain that were worth about $550 million in the third quarter, according to a quarterly 13-F filing. Moreover, Warren Buffett's company also initiated a holding in Pool (POOL), buying 404,000 shares that were worth $152 million. Ulta Beauty (ULTA) fell nearly 5% after Berkshire Hathaway sold nearly all its position in the beauty products retailer.

• Shopify (SHOP) jumped nearly 25%, as both revenue and EPS beat estimates. Revenue climbed 26% to $2.16 billion and gross merchandise volume increased 24% to $69.71 billion.

• Disney (DIS) reported a 39% EPS jump while revenue grew 6% to $22.57 billion, both slightly beating expectations. Disney's streaming business saw profitability improve, with operating income of $321 million vs. a year-earlier loss of $387 million. Disney+ Core subscribers increased 4% to 122.7 million. DIS shares jumped to a six-month high.

• Rocket Lab (RKLB) soared after reporting a smaller-than-expected Q3 loss while revenue grew 55% to $105 million. The satellite launcher and manufacturer guided Q4 revenue above expectations and announced a new launch service agreement for two missions with its Neutron rocket in 2026. RKLB rallied more than 200% so far this year.

• Applied Materials (AMAT) reported fiscal fourth-quarter earnings that beat analysts' estimates, but shares fell 9.2% after the chip-equipment maker issued a disappointing outlook.

• Super Micro Computer (SMCI) intends to submit a plan that will allow it to continue trading on the Nasdaq Stock Market by Monday. The embattled server company is late filing a year-end report with the SEC, putting it on the wrong side of Nasdaq's rules.

Hong Kong Market - HSI lost 6.28%

• Hong Kong stocks dropped six days in a row, putting the benchmark to register its longest decline in two months, as investors digested the fallout of Donald Trump’s re-election and the lack of forceful stimulus from China. The Hang Seng Index (HSI) lost 6.28% to close below 20,000. The benchmark has dropped 15 per cent from a high on October 7.

• “The market has turned cautious on disappointment over China’s failure to ramp up government spending to spur growth,” said Yan Zhaojun, an analyst at Zhongtai Securities. “Economic and corporate fundamentals hold the key to how trading will play out going forward.”

• Alibaba Group (HK:9988/US:BABA) reported fiscal second-quarter adjusted earnings that topped analysts' estimates but revenue that missed forecasts. U.S.-listed shares of the Chinese e-commerce giant dropped 2.2%. Revenue from Alibaba's cloud business rose 7% from the year-earlier period on growth in products related to artificial intelligence.

Singapore Market - STI was up 0.55%

• Singapore shares inched 0.55% higher this week, despite Fed signals slower pace of rate cuts.

• Singapore home sales rose to the highest level in nearly a year, after developers released more inventory in suburban districts. Developers sold 738 new private units in October, according to data released Friday by the Urban Redevelopment Authority. That compares with 401 in September, and is the most since last November.

• SingTel posted a 6% rise in underlying net profit for the half-year and gave improved guidance for the full year on Wednesday. Southeast Asia's largest telecoms provider also said it expects its earnings before interest and tax (EBIT) to grow at a low double-digit rate for fiscal year 2025.

• Sea Limited (SE) swung to a 24-cent per share profit in Q3 vs. a year-earlier 26-cent loss. Sales increased 31% year over year, the Singapore-based internet services firm's best gain since early 2022. The stock, up more than 150% this year, jumped to a two-year high. Investors are growing more confident its Shopee e-commerce unit can fend off challengers.

Australian Market - ASX closed flat

• Australian shares tracked a negative lead on Wall Street, with ASX 200 slight fell 0.12% over the week. The winning stocks were led by James Hardie (ASX:JHX) Industries adding 16.59%, Block Inc. (ASX:SQ2) rising 15.01% and Megaport (ASX:MP1) gaining 12.43%.

• This week, we saw Australia’s biggest bank, Commonwealth Bank of Australia (ASX:CBA), soar to a fresh record high after the big bank released a quarterly trading update. The outlook from the big bank is that while inflation is showing signs of easing, growth in the Australian economy remains slow, but the bank remains optimistic on the overall outlook for the Australian economy’s strength.

• Building materials producer James Hardie Industries (ASX:JHX) bucked the market weakness this week to gain over 13% on the release of the company’s second quarter trading update. Despite outlining profit dropped 23% in Q2FY25 results out yesterday due to weakness in Europe and China, while its North American division, the key driver of revenue, is expected to continue growing into FY26. With tailwinds in the US from hurricanes, increased wear-and-tear of homes requiring siding replacement, and an uptick in new home builds in the region.

The Week Ahead

Macro Factors - Treasury yields are concerned

• Nvidia's earnings will be this week's highlight as the third-quarter earnings season draws to a close. A few economic data releases, with activity in the services and manufacturing sector and a consumer sentiment reading headlining the schedule.

• Investors are carefully monitoring the interest rate. Some expect a retest of 5% in the 10-year U.S. Treasury yield, which was last hovering around 4.5%, could pressure equities, and lead to a pullback in the stock market.

• Investors are trying to understand what happens after the president-elect is sworn into office, seeking clarity on a number of campaign promises including tax cuts and tariffs that could spur domestic economic growth but aggravate inflation, and potentially upend markets in the process.

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Earnings

• The S&P 500 has grown earnings by 5.4% compared to the same quarter a year prior, marking the fifth straight quarter of earnings growth, per FactSet data.

• Nvidia's earnings will be this week's highlight as the third-quarter earnings season draws to a close. The chip maker reports on Wednesday after the market closes.

Nvidia's earnings preview

Nvidia's earnings call

• Other earnings to watch this week will include Lowe's, Medtronic, and Walmart on Tuesday and Snowflake and Target on Wednesday. On Thursday, Deere and Intuit will report.