Breakfast News: Doubling Down
November 14, 2024
| Tuesday's Markets |
|---|
| S&P 500 5,985 (+0.02%) |
| Nasdaq 19,231 (-0.26%) |
| Dow 43,958 (+0.11%) |
| Bitcoin 89,297 (+1.09%) |
Source: Image created by Jester AI.
1. ASML Reaffirms Long-Term Vision
After dropping over 20% in two days last month following a downbeat forecast for the next fiscal year, ASML (ASML 0.60%) management today kept to their upbeat long-term outlook at its investor day, noting sustained demand from AI-driven semiconductor products.
- "We expect... ASML to deliver significant revenue and profitability growth": Forecasts for 2030 sales are in the region of $46-$64 billion, with CEO Christophe Fouquet flagging up that the business can scale existing technology.
- "You'd be hard-pressed to find a company with a stronger non-geographic moat than ASML": Fool analyst Bill Mann reminded investors "it's true the longer-term trends will likely be incredibly strong, but ... remember the growth curve may not be terribly predictable."
2. Inflation Likely Points to Cut
Markets traded sideways on Wednesday as key Consumer Price Index (CPI) data for October came out exactly as expected, causing traders to price in an 82.5% chance of another 25bps rate cut in December.
- Lack of spike in core inflation noted: The headline CPI print was 2.6%, a slight increase from the 2.4% the previous month. The core reading (excluding food and energy) was 3.3%, flat from September.
- Watching for commentary: With Fed Chair Jerome Powell due to speak later, investors should be able to get his initial take on how the data could translate to policy action next month. Producer Price Index (PPI) for October is also due out today.
3. Banks Binge on Bonds
Data just out shows the banking sector has been heavily tapping up the debt markets, issuing the most bonds for a single day on Tuesday since 2016.
- All thinking the same thing: Major players including HSBC (HSBC 2.15%) Goldman Sachs (GS 0.71%), and Citigroup (C +0.11%) helped to contribute $23.5 billion of the total $30.15 billion of investment grade issuance on the day.
- "It seems like banks are issuing bonds now to get ahead of what could happen next year with rates": Jack McIntyre, a portfolio manager at Brandywine Global, made the point the potential for higher inflation in the U.S. in 2025 could see interest rates stay higher for longer, pushing up borrowing costs for banks.
4. Next Up: E-Commerce Earnings
JD.com (JD +1.34%) is due to report Q3 earnings today, with forecasts indicating growth in both revenue and earnings for the online giant.
- Growth outlook in place: The consensus view is for revenue of $36.54 billion, a rise of over 7% from this quarter last year. Earnings per share is expected to be $1.09, an 18% jump over the same period.
- Stiff competition for market share: Amazon (AMZN 0.87%) hit a fresh record high yesterday after news of launching a discount-focused e-commerce service, known as Amazon Haul.
5. Foolish Fun
Disney (DIS 0.14%) is set to report before the opening bell. If you were the CEO for a day, and you have a binary choice in front of you, would you green-light more money toward Disney movies and streaming, OR more money to the Disney Parks, Experiences and Products business, and why? Discuss with friends and family, or become a member to hear what your fellow Fools are saying!
