To The Moon

We saw stocks movement have a good start on Wednesday (13 Nov) after the closely watched Fed Consumer Price Index (CPI) report show that the consumer price index (CPI) rose 0.2% in October for the fourth straight month and advanced 2.6% on an annual basis, the Labor Department's Bureau of Labor Statistics said. Excluding the volatile food and energy components, the CPI increased 0.3% in October, meeting economists' forecasts.

While annual inflation came in at 2.6%, with both numbers in line with economists' estimates. The data helped reinforce expectations that the Fed will cut rates again at its policy meeting in December, but it was not enough to sustain and boost investor sentiment throughout the session.

DJIA and the S&P 500 ended slightly higher on Wednesday while the Nasdaq lost ground after October data showed consumer prices rising in line with expectations, adding support to bets that the U.S. Federal Reserve will cut interest rates in December. The S&P 500 was essentially flat on Wednesday (13 Nov) adding less than 0.1% as the latest inflation data matched expectations.

The major indexes were coming off losses on Tuesday as the market took a breather after hitting a series of record highs following Donald Trump's victory in the presidential election and the Federal Reserve's move to cut interest rates last week.

Meanwhile, the equal-weighted S&P 500 saw a slight increase, but overall market breadth was negative. On the NYSE, decliners outpaced advancers by a 3-to-2 margin, and on the Nasdaq, the margin was 2-to-1.

Significant Stock Movement - Gainer and Lagger

$Tesla Motors(TSLA)$ which has gained more than 30% over the past week as investors bet that the EV maker stands to benefit from CEO Elon Musk's close relationship with the president-elect, finished 0.5% higher after rising nearly 5% earlier in Wednesday's session.

Other mega-cap technology stocks were mixed, with Apple (AAPL), Microsoft (MSFT) and $Amazon.com(AMZN)$ rising while AI investor favorite Nvidia (NVDA), Alphabet (GOOGL) and Meta Platforms (META) lost ground. Looks like Amazon would be coming out as a winner from this volatilty post election result.

Among other noteworthy movers Wednesday, shares of Super Micro Computer (SMCI) fell 6.3%, leading Nasdaq decliners, after the company said it would disclosed delays in filing its quarterly report due to ongoing investigations and the need to engage a new accounting firm. The company is working to resolve these issues and complete its filings promptly.

Note Yield Rose On Correlation With Expectations Around Interest Rates

The yield on 10-year Treasurys, which is correlated to expectations around interest rates, rose to 4.468% after dipping as low as 4.36% shortly after the inflation report. The yield has been rising in recent weeks as investors have recalibrated their thinking on how aggressive the Fed will be in its moves to cut interest rates in the months ahead. In contrast, the 2-year yield, which is sensitive to changes in the federal funds rate, decreased by four basis points to 4.28%, before going back up eleven basis points to 4.305%. Following the CPI data, expectations for a rate cut increased slightly.

The fed funds futures market now predicts an 86.0% chance of a 25 basis points rate cut at the December FOMC meeting, up from 58.7% yesterday, according to the CME FedWatch tool.

S&P 500 Information Technology Dragged By Semiconductors

Semiconductor stocks was one of the laggers and this cause the PHLX Semiconductor Index (SOX) to decline by 2.0%. This downturn also affected the S&P 500 information technology sector, which fell by 0.31%, despite positive performances from Microsoft (MSFT) and Apple (AAPL), which gained 0.51% and 0.4%, respectively.

S&P 500 Consumer Discretionary sector gained 1.14% which is supported by Amazon (AMZN)gaining 2.48%, with MGM Resorts International and Lululemon Athletica as well.

Stocks To Watch

Shares of Cava Group (CAVA) ended 1.6% higher, well off their near-20% rise early in the session after the fast-casual restaurant chain reported strong earnings. Streaming giant Spotify (SPOT) gained 11% after releasing its results late yesterday.

Rocket Companies (RKT) was down 9.1% after the online financial platform badly missed revenue estimates and gave soft guidance, citing a housing market that continues to be squeezed by high borrowing costs.

Warner Bros. Discovery shares surged after Wolfe Research upgraded the stock, highlighting overseas strength for the Max streaming service and potential re-bundling opportunities.

$Walt Disney(DIS)$ saw a 1.8% rise in its stock on Wednesday, continuing a seven-day streak of gains. Activist investor Nelson Peltz expressed interest in revisiting his investment if the stock falls back to the $80s, after previously selling his stake at $119. Disney is anticipated to appoint a new CEO by next year, fueling investor optimism.

$Cisco(CSCO)$ shares dipped 0.9% despite reporting better-than-expected fiscal first-quarter results. The company posted adjusted earnings of $0.91 per share, beating analyst expectations of $0.87, although revenue fell 5.6% year-over-year to $13.84 billion. The mixed performance reflects challenges in product revenue, which dropped 9.2% from the previous year.

$Advanced Micro Devices(AMD)$ announced plans to reduce its global workforce by approximately 4% to focus on growth opportunities, particularly in challenging Nvidia's (NVDA) dominance in AI chips. The layoffs are part of a strategic realignment to better position the company for future growth.

Summary

We might seeing similar behavior from the market on Thursday (14 Nov) as investors digest the CPI data and we can see that expectations of 25 basis points rate cut have moved.

Technology sector could still be dragged by weakness from semiconductor stocks, but one sector that we can look at is S&P 500 Consumer Discretionary.

Appreciate if you could share your thoughts in the comment section whether you think market would exhibit a negative momentum in later trading session.

@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.