Table of Contents
- 1 Home sales decrease, consumer confidence increases
- 2 3.30pm. US stock markets mixed, waiting for FOMC minutes
- 3 1. Abercrombie & Fitch raises guidance
- 4 2. Intel gets nearly $8 billion in subsidies to expand chip production
- 5 3. Kohl’s cuts its revenue forecast for the third time in a year
- 6 4. Novo Nordisk benefits from Biden’s anti-obesity drug policy
- 7 5. Best Buy’s accounts fall short of expectations
- 8 How might President Biden’s policy appointments, particularly those related to the economy and financial regulation, impact the overall performance of the US stock market and specific sectors like retail and pharmaceuticals?
Mixed opening on Wall Street between rises and falls
US stock markets close positive: Dow Jones +0.3%%, S&P 500 +0.6%, Nasdaq +0.6%. There tariff war returns to shake the markets, after Donald Trump’s warnings for an increase in tariffs on products imported from Mexico, Canada and China.
Meanwhile the Bitcoin moved further away from the psychological level of $100,000 after investors cashed in on profits generated by the US presidential election, plunging to a low of $90,799.
Someone evokes the massacre of Thanksgiving Day of November 26, 2020 when within 24 hours bitcoin had lost 13.5% to 16,412 dollars. But just four days after the crash, bitcoin was back to just under $20,000 and by mid-December it had risen to a new all-time high above $24,000. By the end of the year, the price had risen above $30,000, en route to the bull market peak of $65,000 later reached in April 2021. The precedent, in short, bodes well. But we know that history never repeats itself in the same way.
“The $100,000 milestone remains a formidable psychological barrier,” he noted Dead Greenspanfounder of Quantum Economics. «The community has been keeping an eye on this level for years, and while breaking through it now would be a major bullish signal, it may be necessary a short retreat to gather momentum before the next attempt,” Greenspan added.
Second Geoff Kendrickanalyst at Standard Chartered, bitcoin will drop to $88,700. The reason? The new Secretary of the Treasury, Scott Bessantconsidered a more moderate figure than other candidates for that position. This led to a decline in Treasury yields. As a result, bitcoin is falling because it is considered a hedge against bad monetary policies by governments and against inflation. However, Kendrick believes it is still possible to see bitcoin a $125,000 by the end of the year and to 200,000 by the end of 2025.
Home sales decrease, consumer confidence increases
The home sales new ones in the United States fell more than expected in October. The Commerce Department recorded a decline of 17.3% to the annualized rate of 610 thousand units, against expectations for a figure of 725 thousand. The September figure was confirmed at 738 thousand. Compared to a year earlier, the figure was down 9.4%. The median price grew to $437,300, the median price rose to $545,800. At the current rate of sales, it would take 9.5 months to run out of available homes.
In November, Americans were more optimistic about the economy than in the previous month. The trust index drawn up monthly by the Conference Board, a private research group, rose from 108.7 in October to 111.7 points, however below expectations at 112 points. The component measuring expectations for the future rose by 3.2 points to 92.3 points; that on the current situation grew by 2.9 points to 140.9 points.
3.30pm. US stock markets mixed, waiting for FOMC minutes
Wall Street opens mixed, after the record closing of the Dow Jones yesterday. President-elect Donald Trump stirred markets after warning that America would impose tariffs on China, Mexico and Canada as early as January. At 3.30pm the Dow Jones lost 0.32%, the S&P 500 rose by 0.24% and the Nasdaq advanced by 0.39%.
On the macro front, on the evening of Tuesday 26 November, the minutes of the FOMC meeting of 6-7 November will be published, when the American Central Bank cut interest rates by 25 basis points, as widely expected after the 50 bp reduction of September.
«We do not expect any reference to election result and its potential implications for monetary policy, given that the meeting began just one day after the election. The minutes will probably reflect on the best ones instead macro data published in the period preceding the meeting, which would support a slower pace of rate cuts”, say the experts at Unicredit Group Investment Strategy.
The FOMC will be able to observe another month of data on the labor market and inflation before the December decision. «We believe that the Fed will likely cut by 25 basis points on December 18, as the labor market is likely to continue to show a gradual (basic) cooling, but this is a choice in the balance”, conclude the strategists.
Five stocks to watch on Tuesday 26 November
1. Abercrombie & Fitch raises guidance
At 3.30pm the shares were up 1.6%. The apparel company closed the third quarter with double-digit growth in sales and profits and announced the appointment of Robert Ball as its new chief financial officer. In detail, the group recorded a net profit of 2.5 dollars per share, compared to a result of 1.9 dollars per share in the third quarter of 2023 and a market forecast of 2.39 dollars. The company raised its full-year guidance and now expects to see a 14%-15% increase in net sales, versus the 12%-13% previously expected.
2. Intel gets nearly $8 billion in subsidies to expand chip production
At 3.30pm the stock was down 0.2%. The U.S. Department of Commerce has awarded a nearly $7.9 billion federal grant package to Intel to boost the nation’s semiconductor supply chain as part of the Chips Funding Opportunity for Commercial Fabrication Facilities incentive program. The funds will directly support the company’s planned $90 billion investment plan by the end of the decade and will be disbursed based on the company’s completion of a series of milestones.
3. Kohl’s cuts its revenue forecast for the third time in a year
At 3.30pm the shares were down 19%. The department store chain cut its annual sales forecast for the third time this year. The company expects lower revenues than previously expected, as it plans to launch rich offers to attract shoppers ahead of holiday shopping. The company now expects full-year net sales to decline between 7% and 8%, compared to its previous forecast of a decline between 4% and 6%. Following the announcement, Kohl’s CEO Tom Kingsbur announced his resignation.
4. Novo Nordisk benefits from Biden’s anti-obesity drug policy
At 3.30pm the stock advanced by 2.2%. The White House aims to expand federal assistance for the purchase of anti-obesity drugs through the Medicare and Medicaid health coverage programs. Currently, the program offers coverage for the purchase of drugs such as Novo Nordisk’s Ozempic and Eli Lilly’s Mounjaro for people with certain health problems, such as diabetes. The new program would help approximately 3.4 million Americans enrolled in Medicare by reducing out-of-pocket costs for these prescription drugs by up to 95 percent, and would also provide access to drugs for 4 million adults with Medicaid coverage.
5. Best Buy’s accounts fall short of expectations
At 3.30pm the shares were down 7.8%. The largest consumer electronics retailer missed analysts’ expectations after releasing third-quarter results, cutting its full-year revenue forecast. In detail, Best Buy reported an adjusted profit of $1.26 per share, lower than the EPS of $1.29 per share expected by analysts interviewed by Lseg. Revenue of $9.45 billion also missed the consensus estimate of $9.63 billion. (reproduction reserved)
## Interview Questions Based on the Article:
This article covers a range of topics related to the US economy and stock market. Here are some open-ended questions divided into thematic sections for a potential interview:
**Section 1: Bitcoin and Cryptocurrency**
* The article mentions the “$100,000 milestone” for Bitcoin. Some see it as a psychological barrier, others as a target to be broken. What are your thoughts on this significance, and what factors might drive Bitcoin’s price movement in the short and long term?
* Geoff Kendrick predicts a potential dip to $88,700 for Bitcoin and yet sees it reaching $125,000 by year-end. Do these seemingly contradictory predictions highlight the volatile nature of cryptocurrency, or are there underlying factors that support both scenarios?
* How influential is political landscape, particularly Biden’s policy appointments, on the price of Bitcoin? Is it viewed as a hedge against inflation and government monetary policies, as suggested in the article?
**Section 2: US Market and Macroeconomic Indicators**
* The article highlights mixed opening on Wall Street influenced by Trump’s tariff threat. Given the current political climate and global economic uncertainties, how do you anticipate these tariffs impacting various sectors of the US economy?
* The article suggests a potential slowdown in interest rate cuts by the Fed. What are the primary factors influencing this decision, and what will be the implications for businesses and consumers?
* Home sales experienced a significant decline in October, while consumer confidence increased. How do you reconcile these seemingly conflicting indicators, and what does it suggest about the overall health of the US economy?
**Section 3: Stock Market Performance and Specific Companies**
* The article highlights the performance of several individual stocks, such as Abercrombie & Fitch, Intel, Kohl’s, Novo Nordisk, and Best Buy. Which of these companies’ performance surprised you the most, and what factors might explain their respective market movements?
* Kohl’s experienced a significant drop in stock price after reducing its revenue forecast. In this uncertain economic climate, what strategies should retailers like Kohl’s adopt to successfully navigate the challenges and appeal to consumers?
* Novo Nordisk benefitted from Biden’s anti-obesity drug policy. What are the potential ethical implications of such government policies influencing the pharmaceutical industry and access to medication?
**General Discussion:**
* Looking ahead to the remainder of 2023 and early 2024, what are the key risks and opportunities you see for the US stock market and the broader economy?
* What advice would you give to individual investors navigating this complex and ever-changing financial landscape?
These questions encourage discussion, critical thinking, and exploration of different perspectives on the topics presented in the article.
