Bitcoin and dollar rally, Nvidia disappointment, corporate and fundamental news
Stock market news
• The prospect of a slowdown in AI giant Nvidia's sales growth and growing concerns over geopolitical tensions have kept investors on edge, but Bitcoin continues to rally steadily, approaching the $100,000 mark, on bets that Trump 2.0 will be crypto-friendly.
• Futures suggest European stock markets are set for a subdued open as investors digest Nvidia's forecast for its slowest revenue growth in seven quarters. For investors accustomed to the AI darling beating estimates, the numbers were disappointing. The forecast is likely to weigh on vendors and broader markets given Nvidia's place at the center of all things AI, which has driven much of the market's gains in recent months.
• With little economic data expected in the European session, the region's technology shares, which have already fallen to three-and-a-half-month lows this week, are likely to weigh on markets on Thursday.
• Indian conglomerate Adani Group has been thrust into the spotlight after its chairman, Gautam Adani, was indicted in New York for his alleged role in a $265 million bribery scheme, according to U.S. prosecutors. The fallout for the Adani empire, which was rocked by a short-selling attack in February 2023, was immediate, with shares of the conglomerate’s listed companies falling 10% to 20%. Its dollar bonds also fell.
• In currency markets, the dollar continued to lead the way, with the dollar index approaching a one-year high hit last week. The dollar has been rising since Donald Trump's decisive victory earlier this month as investors expect his proposed tariffs to be inflationary, keeping U.S. rates high for longer.
• Bitcoin remains the main talking point, up about 40% in the two weeks since the election as investors look to the Trump administration to impose friendlier regulations on the cryptocurrency sector. The largest cryptocurrency hit a record high of $97,798 in Asian hours, with $100,000 just around the corner.
• Cutting the corporate tax rate from 17% to 15% could boost the S&P 500 for years to come - Marketsinsider. The tax cuts could boost corporate earnings for S&P 500 companies by more than 20% by 2026.
• The euro could reach parity with the US dollar before the end of this year due to extremely negative sentiment among international investors regarding the Eurozone.
• The ECB warned of the risk of a “bubble” in the AI-related stock market in its semi-annual financial stability review, - Reuters.
• Ford has announced plans to cut another 4,000 jobs in Europe, about 14% of the company's European workforce by the end of 2027, primarily in Germany and the UK.
• Apple's Singles Day sales in China were lower than last year. American corporation Apple sold fewer smartphones during China's Singles Day this year, as it faced pressure from an "abnormally large" number of competing phones, Reuters writes, citing data from Counterpoint Research.
• Hedge funds are buying up shares of nuclear power producers in an attempt to profit from an expected surge in electricity demand from the AI sector.
• According to a new analysis by Goldman Sachs, 697 funds have more than $3 trillion in assets under management.
• Shares of TJX Cos. fell in New York after the unit that operates the TJ Maxx and Marshalls discount chains reported quarterly sales that missed expectations.
• Chinese biotech Laekna teams with Lilly (LLY) to develop muscle-preserving obesity drug
Lilly is seeking to cement its position as the leader in an obesity treatment market expected to reach $150 billion in revenue in the next decade.
• The U.S. military has chosen a little-known Utah supplier for its drone program. The Army has selected Teal Drones to supply thousands of surveillance aircraft, beating out some of the best-funded drone makers.
• The CEO of Delta Air Lines (DAL) said the new Trump administration will be a "breath of fresh air" for airlines after what he called government "overreach" under President Joe Biden.
• Target (TGT) shares fell 21% on Wednesday after the retailer cut its full-year profit forecast, warning that a flat quarter of sales and inventory buildup were hurting profitability.
• The U.S. Commerce Department said Wednesday it has finalized a $1.5 billion government subsidy for GlobalFoundries to expand its semiconductor manufacturing operations in Malta, New York and Vermont.
• Walmart (WMT) and Lowe's (LOW) are the latest U.S. retailers to warn that the cost of goods could rise if President-elect Donald Trump follows through on his tariff promises of 10% to 20% on all goods and a 60% tariff on goods from China.
• Less than a year after launch, US spot BTC ETFs have already accumulated over 1 million BTC. They have absorbed about 5% of the total supply.
• The Kingdom of Bhutan has invested about $1.14 billion in BTC. This is 39% of the country's GDP.
• MicroStrategy (MSTR) announced a $2.6 billion bond issue to acquire additional BTC.
• A crypto trader has bet on Bitcoin at $174,000 in 2027, according to options on the BlackRock IBIT Bitcoin ETF. Bitcoin hit a new record high of $95,000 yesterday.
• NVDA shares are down 2.5% after the report. Gross margin fell slightly to 73% from 75% last quarter. For reference, AMD has a gross margin of 97% and AVGO has 77%.
• SNOW shares are up 20% after the report. The company raised its revenue forecast to $906-911 million (analysts expected $882 million) and beat revenue and profit expectations for the reporting quarter.
The annual growth of remaining fulfillment obligations was 55% in the last quarter, which indicates acceleration.
The revenue forecast for the 4th quarter was $37.5 billion +/- 2%. This also disappointed the market a little.
But we expect a real reaction today or tomorrow during stock exchange trading.
• PANW shares fall 5% after earnings report. The company beat expectations and raised its guidance. But that guidance only reached Wall Street's forecast, which is likely what sent the stock down.
• Argentine investors have bet on Milea's popularity a year after his election.
• Trump to impose nearly 40% tariffs on China in early 2025, hitting growth: Reuters poll
• According to Rystad, major oil companies are betting big on biofuels, with more than 40 projects underway by 2030.
• Chinese robotaxi company Pony AI is seeking a valuation of up to $4.55 billion in a high-profile U.S. IPO.
• Fed to cut rates in December but slow pace in 2025 on inflation risks: Reuters poll
• VW union proposes $1.6 billion in cost cuts but no plant closures. In high-wage Germany, Volkswagen's labor costs exceed those of its rivals.
• Pfizer appoints insider Chris Boshoff to head R&D.
• Kenyan lender KCB Group's profit for 9 months rose to $445 million.
• Source says Citadel appoints Holocene's Royce as portfolio manager.
• Senator Warren Calls on Fed to Maintain Wells Fargo Asset Cap
• Santander UK sets aside $375m to cover potential car loan claims.
• HSBC relaunches Premier brand in UK in pursuit of wealthy clients
• Leading Australian banks join forces to combat fraud and scams in banking payments.
• Santander launches fintech in Mexico to expand digital services
• Nikolai Tangen will run for another term as CEO of Norway's wealth fund.
• Caixabank CEO says he will work with Angola to help BFA go public.
• Former Bankman deputy Frieda Wang avoids jail time for cryptocurrency fraud.
• Firstrade offers overnight trading and joins growing list of US brokerages
• US finalizes $1.5 billion grant to GlobalFoundries to expand chip manufacturing.
• KPMG to spend $100 million on AI partnership with Google Cloud
• Numenta, with support from the Gates Foundation, releases its AI model as open source.
• Ford to cut jobs in Europe as shift to electric vehicles and losses from Chinese rivals
• Aspen Technology forms committee to evaluate Emerson's bid.
• Chinese competitor Starlink has struck a deal to enter the Brazilian market.
• Comcast to spin off several cable TV networks into separate company as streaming dominates
Key events that could impact markets on Thursday:
-Economic events: French business climate in November; surge in eurozone consumer confidence in November.
Fundamental news
• UK - Consumer Inflation CPI (October) y/y = +2.3% (+1.7% previous). Core CPI = +3.3% y/y (+3.2% previous).
The latest report adds to the argument that the Bank of England will cut interest rates slowly in the coming months.
• The ECB has warned of the risk of a new crisis in the eurozone due to a combination of low economic growth and high levels of public debt - FT.
• The United States has recognized opposition leader Edmundo González as the elected president of Venezuela. He has thus replaced the previous president of Venezuela, Juan Guaido, who was recognized by the states. US Secretary of State Antony Blinken said that on July 28 the Venezuelan people “spoken clearly” and elected González as their leader.
• The Bundeswehr is preparing business in Germany for war with Russia. Representatives of the Bundeswehr have begun to conduct explanatory work among the country's largest companies in the event of war with Russia, based on a secret plan of the German government, the Frankfurter Allgemeine Zeitung newspaper reported. According to its sources, the first version of the document "Operational Plan Germany" contains about 1,000 pages.
• Gautam Adani, one of India's richest men, has been charged in New York with massive fraud. With a net worth of $70 billion, Adani is ranked 22nd on the world's rich list and 2nd in India, according to Forbes. Federal prosecutors have accused the founder of India's Adani Group of bribery, wire fraud and defrauding both U.S. investors and global financial institutions by making false and misleading statements.