U.S. stocks closed slightly higher on Friday to mark four consecutive weeks of gains. Of the 11 S&P sectors, nine closed in positive territory during the shortened session, led by Health Care. Communication Services and Technology were the two losers. Friday’s economic calendar only had the S&P Global Flash U.S. Composite PMI on the docket, which showed that private sector employment in November fell for the first time since June 2020. “Retail sentiment appeared buoyant following the strong market rally in November. Retail investors net bought +$4.8B of cash equities this past week, +2.3 standard deviations above the last 12M average and the highest weekly inflow recorded since April 2022,” JPMorgan’s Peng Cheng said. “ETFs saw an inflow of $2.7B. Unlike the previous week, broad-based equity ETFs including S&P, Nasdaq, and Russell all saw below-average demand, potentially due to retail investors’ preference for single names,” Cheng added. For the week, the Dow gained 1.27%, while the S&P 500 advanced 1% and the Nasdaq Composite tracked 0.89% higher. Read Seeking Alpha’s Catalyst Watch for a preview of next week’s major stock market events.
After a drama-filled week that saw him jump ship to Microsoft (MSFT), Sam Altman returned to OpenAI as CEO with a new board that included former Salesforce (CRM) co-CEO Bret Taylor as chairman, ex-Treasury Secretary Larry Summers, and Quora CEO Adam D’Angelo. “We believe this is a first essential step on a path to more stable, well-informed, and effective governance,” Microsoft’s Satya Nadella wrote in response. Most of OpenAI’s staff threatened to quit after Altman was ousted in what Wedbush called an “embarrassing circus show,” while SA analyst Michael Fitzsimmons said OpenAI was “hoisted by its own petard.” OpenAI researchers had reportedly warned the previous board of an AI breakthrough that could potentially threaten humanity, which was likely a factor in Altman’s ouster. (71 comments)
Nvidia (NVDA) shares fell 1.7% AH to $490.75/share on Tuesday even as the semiconductor giant posted results and guidance that handily beat expectations. Revenue more than tripled from a year ago to $18B, surging past estimates, with data center revenue at a record $14.5B. While there was no “meaningful impact” from the Biden administration’s export controls in Q3, Nvidia expects sales in China to decline “significantly” in Q4. “We do not have good visibility into the magnitude of that impact even over the long-term,” cautioned CFO Colette Kress. While SA analyst Bill Maurer believes Nvidia’s valuation is still reasonable, Investing Group Leader Jonathan Weber said waiting for a better entry point might pay off. (238 comments)
All Federal Reserve officials agreed to “proceed carefully” with interest rates, according to the minutes from the FOMC’s latest policy meeting released on Wednesday. Members wanted rates to stay restrictive “for some time,” as inflation remains above the 2% objective, with virtually no interest in cutting rates anytime soon. Fed officials also saw Q4 economic growth cooling “markedly” from the 4.9% jump in Q3. At the Oct. 31-Nov. 1 meeting, policymakers held the federal funds target range steady at 5.25%-5.50% – the highest level in 22 years – after boosting it in July. Traders are largely certain that the Fed will maintain rates this year, with the odds of a rate cut priced in for 2024. (7 comments)
Daniel Kan, co-founder and product chief at General Motors’ (GM) self-driving unit Cruise, resigned this week, just a day after its CEO Kyle Vogt stepped down. The exits came less than a month after Cruise halted operations, issued recalls and halted production of its autonomous vehicles amid safety concerns. Cruise is under federal investigation because of a hit-and-run incident in San Francisco, after which California promptly suspended its licenses. GM CEO Mary Barra appeared to shrug off these setbacks, leaving many questions unanswered as to Cruise’s future. GM already lost $732M on Cruise in Q3 and around $1.9B in the nine months ended Sept. 30. (19 comments)
Inflation headwinds, higher interest rates, waning savings, and the student loan payment resumption aren’t deterring Americans from going shopping. In fact, they might be encouraging them to do so, as they try to spot a good deal in the current environment. Around 182M people across the U.S. are forecast to shop in-store and online from Thanksgiving Day through Cyber Monday, according to the National Retail Federation, marking the highest estimate since NRF began tracking the data in 2017. On the investing side, retail stocks have been a mixed bag this year, with the S&P 500 Consumer Discretionary Index (SP500-25) up 33% YTD, while the S&P 500 Consumer Staples Index (SP500-30) has declined about 5%. (5 comments)
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