November 18th Market Overview

Happy Tuesday

The market is getting quite sassy. I think as earning season comes to an end we're in a show-me market now. Investors want proof that all this AI spending actually turns into revenue, and NVIDIA has to deliver that narrative tomorrow. Tons of headlines buzzing but I think this is the core energy the market is moving on right now.

Even a massive Anthropic (AI) deal with Microsoft and Nvidia couldn't make an impact today. That’s concerning to me.

Let's dig in...

Today's Big Picture

AI Bubble Now the Top Market Risk

Bank of America's survey shows fund managers now see AI stocks as the biggest threat to markets. Two months ago it was bond yields. Now it's whether companies are burning cash on AI with no revenue to show for it. For the first time since 2005, a majority say corporations are overspending on capex all going to AI data centers.

Nvidia Reports Wednesday With Everyone Watching

The chipmaker is down this month after major exits. Peter Thiel's fund sold its entire stake. Michael Burry bought puts against it. SoftBank dumped billions. The market wants proof tomorrow that all this AI infrastructure spending is actually turning into revenue for Nvidia.

Big AI Deals Aren't Moving Stocks Anymore

Anthropic announced a massive partnership with Microsoft $MSFT and Nvidia $NVDA billions in investments. Normally that moves markets. Today both stocks fell.

Market Overview

Index Performance

Stock Spotlight

Home Depot $HD ( ▼ 5.27% ) 
missed earnings and cut its outlook. The company thought demand would pick up as rates dropped. Instead, consumers still aren't spending and housing stays weak. Shares had their worst day since 2023.

Klarna $KLAR ( ▼ 10.41% ) 
dropped after its first earnings as a public company. The buy-now-pay-later company went from profit last year to losses this quarter. I personally have a vendetta against this company and hate it.

Cloudflare $NET ( ▼ 2.82% ) 
dropped and recoverd quite a bit after massive outages knocked out X and ChatGPT.

Big Name Updates

Meta $META ( ▼ 0.55% ) 
beat the FTC in court. The judge said the government didn't prove Meta is a monopoly. The case was about Meta buying Instagram and WhatsApp.

Intuit $INTU ( ▲ 0.91% ) 
will pay OpenAI over annually to power its products with AI.

Amazon $AMZN ( ▼ 4.42% ) 
borrowed billions in the bond market and investors jumped at it. The 40-year bond priced just above Treasuries. The bond market is saying Amazon is one of the few companies trusted to borrow for decades to build AI infrastructure.

Other Notable Company News

Energizer Holdings $ENR ( ▼ 18.16% ) 
had its worst day ever after missing earnings. The CEO blamed tariffs hitting next quarter.

Axalta Coating Systems $AXTA ( 0.0% ) 
is merging with AkzoNobel to create a paint company with in revenue.

Rockwell Automation $ROK ( ▼ 0.96% ) 
is building a new plant in Milwaukee and partnering with Nvidia on factory automation software.

Boeing $BA ( ▼ 1.07% ) 
got an order for fifteen 787s from Gulf Air.

Sector Watch

Bond Market

The 10-year Treasury is trading near. Tech company bonds are selling off with their stocks—Oracle $ORCL bonds due in 2055 now trade at spreads, up from when issued in September. More companies issuing debt to fund AI means investors want higher returns. Fed minutes from October's meeting drop tomorrow.

Policy Watch

Fed

Vice Chair Philip Jefferson said the Fed should go slow on rate cuts. Trump says he already knows who he'll pick for the next Fed chair but didn't say who. Treasury Secretary Scott Bessent has been interviewing:

• Kevin Hassett from the National Economic Council

• Former Fed governor Kevin Warsh

Trade

JPMorgan's Daniel Pinto says AI stocks are due for a correction that could hit the broader market. Investors are betting on productivity gains that won't show up fast enough, even as AI spending hits by 2030.

International

The EU opened an investigation into Amazon $AMZN and Microsoft $MSFT cloud dominance. Regulators say both platforms control too much of the market. The probe runs twelve months.

Bank of Japan Governor Ueda told the Prime Minister they're pulling back stimulus to hit their inflation target.

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What To Watch

Nvidia Earnings

Nvidia $NVDA reports Wednesday after the close. Analysts expect per share on revenue of. JPMorgan has a target versus Monday's close. The stock needs a beat and strong guidance on AI revenue to stop the bleeding.

September Jobs Report

The delayed September payrolls drop Thursday. Latest data showed claims at in mid-October versus in late September. Private sector lost an average of jobs over four weeks per ADP.

Retail Earnings

Lowe's $LOW and Target $TGT report Wednesday, Walmart $WMT Thursday. After Home Depot's miss and cut, these will show if the consumer pullback is everywhere or just housing.

Fed Minutes

October meeting minutes come out Wednesday at 2 p.m. The Fed cut rates but officials were split on whether they should.

Bitcoin

Bitcoin briefly dropped below before bouncing to around. Tech investors own a lot of crypto. If it keeps falling, certain stocks will react to that.

Thanks for reading 🙂

- John

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