A morning in New York: the focus is on AI-enabled messaging

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research

Investors are cautious ahead of one of the key events of the week - the publication of the quarterly report of Nvidia (NVDA), which will be released after the close of the main session of this Wednesday. It is around this company that the main dispute on Wall Street is unfolding. A number of experts believe that the realization of the ideal scenario of the current AI cycle is already fully accounted for in the quotes. The announcement by the corporation's CEO Jensen Huang that its order book for 2025-2026 has reached $500 billion has only strengthened the already high expectations. The consensus forecast assumes the issuer's revenue growth by 57% YoY to $55.2 billion, of which $49.3 billion should come from the data center segment. Taking into account how much the market is oversaturated with long positions in shares of AI sector leaders, the correction in Nvidia's shares can pull the whole technological segment of the market. If its results exceed optimistic forecasts and management shares new details on major deals, it will revive risk appetite and catalyze buying in the growth stock segment. The options market is pricing in a 7% up or down move in Nvidia stock after the report, which implies a rise or fall in capitalization of about $350 billion.

Further reinforcing the focus on the AI sector was data from Bank of America's global survey of asset managers, which in November, for the first time in 20 years, rated companies' investment levels as excessive. This signals a request for a slowdown in capital expenditure growth from hyperscalers. The realization of this scenario in the medium-term horizon can be seen as a negative for Nvidia.

This Thursday, housing starts data for October (consensus: 1.325 million) will be released. They will complement the statistics, which recorded an increase in the NAHB index while real demand was weak. If the number of housing starts falls below forecasts, it will be another reason for the Fed to continue easing its policy. Strong statistics will support hawkish sentiment and put pressure on growth stocks ahead of a key corporate release.

TJX Companies (TJX), Target (TGT), Lowe's (LOW), Williams-Sonoma (WSM), Wix (WIX), Viking (VIK) and Dycom Industries (DY) will report before the main session opens. Nvidia (NVDA), Palo Alto Networks (PANW), Bullish (BLSH) and Hillenbrand (HI) will release quarterly results after the close of trading.

Futures on US indices show mixed dynamics. We assess the balance of risks for the upcoming trades as neutral with increased volatility. We focus on S&P 500 fluctuations in the range of 6550-6685 points (from -1% to +1% to the previous session's closing level).

Futures on US indices show mixed dynamics. We assess the balance of risks for the upcoming trades as neutral with increased volatility. We focus on S&P 500 fluctuations in the range of 6550-6685 points (from -1% to +1% to the previous session's closing level).

- La-Z-Boy (LZB) stock price reacted with an increase of 7% on its results for the second quarter of fiscal 2026. The company reported adjusted EPS of $0.71 with a consensus of $0.54. Revenue guidance for the next quarter lays it in the range of $525-545 million, demonstrating management's confidence in its continued growth, which further supported the positive investor reaction.

- Onsemi (ON) shares are adding nearly 3% as the board approved a three-year, $6 billion share repurchase program that will kick in immediately after the current $3 billion buyback ends on Dec. 31, 2025.

- Constellation Energy (CEG) is up 3% on news that it has received a $1 billion federal loan to restart the Crane Clean Energy Center nuclear power plant in Pennsylvania. The funds will cover most of the project's estimated $1.6 billion cost. The plant, which closed in 2019, is expected to restart generating 835 megawatts of electricity in 2027 - a year earlier than originally planned. The project is part of a power purchase agreement with Microsoft (MSFT) to meet data center needs.

- Tesla (TSLA) has received approval to operate a cab hailing service in Arizona. However, investors remain skeptical about the company's prospects due to its significant gap with competitors. Waymo currently operates about 400 autonomous vehicles in the Phoenix area and has crossed the 10 million unmanned rides mark, while Apollo Go reported 3.1 million fully unmanned rides in the third quarter of 2025, with a 212% YoY growth and geographic expansion to 22 cities worldwide.

Trading on November 18 on the American stock exchanges ended mostly with a decline. S&P 500 lost 0.83%, Nasdaq 100 fell by 1.2%, Dow Jones fell by 1.07%, and only Russell 2000 was able to add 0.31%. The pressure on the quotations was exerted by another capital flow from the shares of technological sector and "growth" securities. Profit fixation was stimulated by concerns about overvaluation of these assets. This was confirmed by the divergence between capitalization-weighted S&P 500 and its equilibrium counterpart, which showed better dynamics.

Shares of the "Magnificent Seven" were mostly trading in the negative. The most notable decline was shown by Amazon (AMZN: -4.43%) and Microsoft (MSFT: -2.73%). The energy sector (XLE: +0.8%) was the growth leader, while the cyclical consumer staples sector (XLY: -1.85%) was the outsider.

Macroeconomic statistics released during the day were mixed. The NAHB Housing Market Index rose to 38 points in November (consensus: 37 points, unchanged from the previous month). At the same time, the details of this report revealed a record share of builders (41%) that cut prices.

The index of business activity in the services sector from FRB New York rose to -21.7 points, but remains at extremely low levels, indicating a continuing recession. At the same time, the components of employment and business climate show deterioration, which is considered by the market as a sign of an increasingly clear slowdown in the economy. This is also evidenced by ADP data, according to which the number of new jobs fell by 2.5 thousand on average per week.

U.S. President Donald Trump's talks with Saudi Crown Prince Mohammed bin Salman aimed at strengthening economic and defense ties have supported oil prices rising above $60 a barrel.

- Medtronic (MDT: +4.7%) reported second-quarter fiscal 2026 global revenue growth of 6.6% YoY to $9 billion. Organic revenues in the Cardiology segment increased at a record pace of 9.3% YoY in more than a decade (excluding Pandemic). Sales of new high-tech solutions for arrhythmia ablation soared 71% YoY.

- Weak third-quarter results and downward revision of its own earnings forecast for the current year caused Home Depot (HD: -6%) shares to plunge. The retailer's revenue in the reporting period climbed 2.8% YoY to $41.4 bln, while comparable sales increased just 0.2% QoQ. The retailer's CEO emphasized that the results fell short of expectations primarily due to the lack of expected increase in demand.

- Klarna Group (KLAR) shares fell by 8% amid the publication of the report for the third quarter, the first since the IPO. Revenue of $903 million (+26% YoY) exceeded average expectations of $882 million, but after net income of $12 million ($0.05 per share), the issuer generated a net loss of $95 million ($0.25 per share). The growth driver was the US market, where gross sales volume (GMV) increased by 43% YoY and total revenue increased by 51% YoY.

- Growth in shares of Warner Bros. Discovery (WBD: +4.2%) was supported by news of Paramount Skydance, Comcast and Netflix 's plans to submit initial bids to acquire the company. One report indicated that Paramount, together with sovereign wealth funds from Saudi Arabia, Qatar and Abu Dhabi, was preparing an offer of around $71 billion. However, Paramount itself called this information "inaccurate".

- The day before, Cloudflare (NET: -2.8%) experienced widespread outages caused by an error in the configuration file of its Bot Management service. The company announced that the problem has been resolved.

This article was AI-translated and verified by a human editor