To The Moon

The post-election rally continue to extend on Thursday (07 Nov), we saw major U.S. indices reaching their new all-time highs, this was also helped by the Federal Reserve matched investor expectations by announcing a quarter-point cut to its benchmark interest rate.

Both S&P 500 and NASDAQ was up 0.74% and 1.51% respectively reaching the intraday and closing record highs, while the DJIA closed lower after hitting an all-time high during Thursday's session.

Fed Quarter-Point Cut Matched Investors Expectations

After the two-day Fed meeting of its policy committee, Fed has commented in a statement that "the risks to achieving its employment and inflation goals are roughly in balance," this is the same language from its September statement. Fed reiterated that future decisions would be guided by economic data.

The policy committee is confident the economy is headed for a soft landing as mentioned by Fed Chair after the end of the two-day meeting. "We continue to be confident that with an appropriate recalibration of our policy stance, strength in the economy and the labor market can be maintained with inflation moving sustainably down to 2%," Powell said.

The rate cut Thursday represented the second straight time the Fed has eased policy after two years of high interest rates meant to tame post-pandemic inflation.

S&P 500 Communication Services and Information Technology Biggest Winners

Large-cap technology stocks were up across the board, with Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL) and Meta Platforms (META) all gaining ground.

This has helped the communication services and information technology sectors to gain 1.92% and 1.83% respectively, making them the significant winners in the S&P 500 sectors.

Warner Bros Discovery (WBD) also helped the communication services sector after the stock rose more than 10% despite revenue came in below expectations.

The consumer discretionary sector was helped by Tesla (TSLA) which rose 2.9% after gaining 15% yesterday amid optimism about what a Trump presidency could mean for the EV maker given CEO Elon Musk's ties to the president-elect.

Under Armour (UA) jumped 23% after the athletic apparel maker reported strong result and shares skyrocketed as the athletic apparel maker’s better-than-expected results and increased guidance indicated that CEO Kevin Plank's turnaround plan is working.

Note Yield Was Mixed With 10-Year Down On Thursday

The yield on 10-year Treasurys, which has risen in recent weeks as investors have scaled back their expectations about how aggressive the Fed will be in cutting rates, was at 4.336% recently, down six basis points from 4.43% on Wednesday when it hit its highest level since early early July. 2-year note yield was up seventeen basis points and closed 4.216%.

Stocks To Watch

$Block(SQ)$ saw an 11% decline in after-hours trading following soft Q4 guidance and a Q3 revenue miss. The company expects Q4 adjusted EBITDA of $725 million, below analyst estimates, and continues to target long-term growth objectives. Despite matching EPS expectations for Q3, the company's outlook weighed on investor sentiment.

If we looked at SQ, even though the stock has declined 11% after earnings, we could see that it is trading above the short-term and long-term MA, and the MTF is also showing strong uptrend, hence I believe for long term, this payment gateway company should still have runway.

Although third-quarter revenue from $Warner Bros. Discovery(WBD)$ came in below expectations, the media giant swung to a quarterly profit after posting a loss a year ago, and its shares popped 12%. The company's Max streaming service added 7.2 million subscribers from the previous quarter, marking its largest-ever quarterly gain. However, revenue slipped year-over-year in Warner Bros. Discovery's studio division.

We should be seeing some more upside coming from WBD, even though their third-quarter revenue missed expectations, there should be more upside coming from this company as consumer spending should be coming back strong with the inflation falling, and consumer having more disposable income.

$Match(MTCH)$ posted better-than-expected net income for the third quarter, but the online dating platform fell short of sales expectations and provided an underwhelming fourth-quarter outlook. Although revenue from Hinge improved year-over-year, the company said Tinder Direct revenue moved lower, reflecting a decline in monthly active users and soft growth in revenue per payer. Match shares tumbled 18% on Thursday, marking the steepest drop in the S&P 500.

Summary

We should be seeing more upside as the rally from the post election should continued. The tech stocks and consumer discretionary like Tesla and Amazon should continue to do well.

Do monitor how stocks are moving as there are some stocks and sectors that we can take advantage of potential low price and upside.

Appreciate if you could share your thoughts in the comment section whether you think rally would continue on Friday to close this week on a high.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.