To The Moon

The stock market experienced a pause following a strong performance since last week's election results. We saw major U.S. equities ticked lower as the post-election rally lost momentum.

The losses were relatively smaller as compared to the gains since last Tuesday’s (05 Nov) close. The S&P 500 fell 0.29% on its first down day since the election. The DJIA dropped more than 350 points, ending Tuesday's session 0.86% lower, while the NASDAQ slipped 0.09%.

The Russell 2000 index fell by 1.8% today, yet it remains up by 5.8% since the election. This decline was driven by profit-taking and rising market rates.

Mega Cap Support To Broader Equity Market

Gains in some mega-cap stocks like Microsoft (MSFT) up 1.20% and NVIDIA (NVDA) up 2.09% helped to provide support to the broader equity market.

Survey of Consumer Expectations for October Survey which indicated that year-ahead inflation expectations decreased to 2.9% from 3.0%, the three-year outlook fell to 2.5% from 2.7%, and the five-year expectations dipped to 2.8% from 2.9%, this does not have any impact on the equities.

We also saw NFIB Small Business Optimism survey, which increased to 93.7 in October from 91.5 in September. We are expecting some economic data like the October Consumer Price Index and core-Consumer Price Index, scheduled for release at 8:30 ET.

Rising Note Yield Trigger Decline

The rising market rates trigger decline as 10-year yield increasing by 12 basis points to 4.43%, before closing two basis point to 4.42% at time of this writing.

The 2-year yield rising by nine basis points to 4.34% before dropping twenty-one basis point to 4.342% at time of this writing.

S&P 500 Sector Was Affected By Broad Selling Interest

There was broad selling interest across many stocks, leading to declines. The Invesco S&P 500 Equal Weight ETF (RSP) dropped by 0.8%, and nine S&P 500 sectors recorded losses.

The consumer discretionary sector was among the hardest hit, falling by 1.1%, with notable losses in Tesla (TSLA) down 6.15%, and Home Depot (HD) was also down 1.3%. TSLA shares were affected by consolidation efforts, while HD shares reacted to earnings news.

Information Technology sector gain 0.13%, thanks to gains from Adobe (ADBE) up 4.35%, Nvidia (NVDA) up 2.09% and also Microsoft (MSFT) up 1.20%.

Stocks To Watch

$Amazon.com(AMZN)$ is reportedly negotiating a $475 million agreement to provide $NVIDIA Corp(NVDA)$ processors for IBM's (IBM) AI training via the cloud. This deal would enable IBM to use AWS's EC2 servers equipped with Nvidia's GPUs, showcasing the rising demand for Nvidia's technology. This collaboration is expected to enhance AI solutions for their shared customers, building on IBM's earlier integration of its AI platform with Amazon SageMaker.

This collaboration seems to help AMZN and NVDA stock price on Tuesday (12 Nov), as AMZN gain 1% and NVDA gain 2.09% amidst a weaker market with selling interest.

I am holding my position in these stocks as I am expecting more deal collaboration coming as other technology continue to enhance their AI solutions. I would watch Oracle, as IBM have moved their AI training onto AWS even though there is IBM Cloud.

Rocket Lab USA (RKLB) reported a Q3 GAAP EPS of -$0.10, surpassing expectations by $0.01. The company achieved a revenue of $104.81 million, marking a 54.9% year-over-year increase, which exceeded forecasts by $2.42 million. Rocket Lab's optimistic Q4 outlook projects revenue between $125 million and $135 million, with shares rising by 9.48% following the announcement.

$Occidental(OXY)$ outperformed expectations with a Q3 Non-GAAP EPS of $1.00, beating estimates by $0.25. The company's strong operational performance generated an operating cash flow of $3.8 billion. Occidental also repaid $4 billion in debt, achieving nearly 90% of its short-term debt reduction target, leading to a slight increase in shares by 0.84%.

Occidental Petroleum (OXY) Debt Reduction Effect In Focus

You may refer to my previous article on OXY earnings, looks like OXY debt reduction effect is working well and this should help OXY to continue to gain. From the technical, we are seeing OXY still trading below short-term and long-term MA level.

We need to see OXY to present a strong stock price move, MACD is making bullish upside though, but MTF weak trend is a concern, so we might want to monitor how OXY is trading price action on Wednesday (13 Nov).

Home Depot (HD) saw a slight decline in its stock price after the company's earnings call, despite exceeding Q3 earnings expectations. CEO Ted Decker noted that high interest rates are impacting consumer spending on home improvement projects. Analysts observed improvements in transaction numbers and cost leverage, though macroeconomic conditions will likely influence future estimates.

$SoundHound AI Inc(SOUN)$ posted a Q3 Non-GAAP EPS of -$0.04, beating estimates by $0.03, with revenue reaching $25.09 million, an 88.6% increase year-over-year. The company updated its revenue outlook for 2024 and 2025, with shares falling slightly by 1.06% after the announcement.

As I mentioned in my previous article Can SoundHound AI (SOUN) Projected Strong Growth Help Reduce Caution On Its High Valuation, even though SOUN technical is showing potential uptrend, but the growth is still not sitting well with investors.

I think we need to watch this stock for longer term, especially on how much new businesses can SOUN gather.

Amgen (AMGN) shares declined after Cantor Fitzgerald highlighted potential safety concerns with its obesity drug candidate MariTide (AMG-133), linked to a loss in bone mineral density. Despite these concerns, the analyst maintained an overweight recommendation with a $405 target price, citing the drug's potential to challenge existing market leaders.

$Sea Ltd(SE)$ experienced a surge in stock price by up to 20.6% following its Q3 earnings report, which showed a 31% increase in revenue to $4.3 billion. This growth was driven by all business segments, particularly the e-commerce platform Shopee. The company remains on track to meet its annual guidance, with significant growth in its SeaMoney loan book and Free Fire bookings.

Referring to my previous article on SE earnings, looks like the earnings from e-commerce and SeaMoney does help to contribute to the growth so this might signal SE future growth positive.

Sea Limited (SE) Significant Revenue Contribution From E-commerce and SeaMoney

ARK Innovation ETF (ARKK) has reached its highest trading level in over two years, gaining 23.7% in November. Despite this rise, the ETF remains significantly below its all-time high. The fund's top holdings include Tesla (TSLA), Coinbase Global (COIN), and Roku (ROKU), indicating strong interest in growth stocks.

Summary

If we looked at how Bitcoin price is moving, and the profit-taking from equities, we could see technology stocks making a comeback, as there might be more collaboration deal for AI coming up.

So I still believe that we need to have some high quality technology stocks to be defensive on our portfolio in event of market profit taking or consolidation.

Appreciate if you could share your thoughts in the comment section whether you think market would continue the consolidation with investors continue taking profits.

@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.