Morning in New York: buyers are back in the majority

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

Before the opening of trading on November 26, futures on U.S. indices are moderately growing on the background of continuing expectations of easing of the Fed's policy. Additional support for the market is provided by media reports that Kevin Hassett, director of the White House National Economic Council, is considered as the main candidate for the post of chairman of the Federal Reserve. According to sources, Hassett shares Donald Trump's approach to low rates, which markets interpret as the likelihood of a more predictable and softer monetary policy. Hassett is rated as the most likely successor to Jerome Powell compared to Christopher Waller and other candidates, according to forecasting platform Polymarket. At the same time, Bloomberg emphasizes that there is no final decision yet, as Trump is known for unexpected personnel moves.

Investors will once again focus on macro statistics, primarily weekly initial jobless claims data (consensus: 226,000 after 220,000 a week earlier). For investors, confirmation of a moderate weakening trend in the labor market will be a key argument for continued monetary easing in December. This could provide support for growth stocks.

The pressure on the healthcare sector is becoming medium-term. The news of price cuts for 15 high-cost drugs, including Ozempic and Wegovy, under the Medicare program starting in 2027 acts as a delayed pressure factor for pharmaceutical companies and allows investors to reconsider long-term profitability models.

John Deere (DE) and Li Auto (LI) will present quarterly results before the opening of the main session.

Futures on US indices demonstrate positive dynamics. We assess the balance of risks for the upcoming trades as neutral with average volatility. We focus on S&P 500 fluctuations in the range of 6710-6830 points (from -0.8% to +0.9% to the previous session's closing level).

- HP Inc. (HPQ) shares are down about 5% after a mixed report. The corporation's revenue rose 4.2% YoY to $14.6 billion, with adjusted EPS in line with consensus at $0.93. However, investors focused on the announcement of a reduction of about 10% of its workforce (~6000 employees) and a major three-year savings program amid an aggressive rollout of AI solutions. The market took this as an acknowledgement of structural pressures in the print business.

- Quotes of Urban Outfitters (URBN) reacted with growth of more than 18% to the publication of the quarterly report. The company's earnings per share came in at $1.28 with market expectations of $1.2, while revenue reached $1.53 billion versus the consensus of $1.47 billion. These results signal high traffic, confirming the success of merchandising and the sustainability of demand from young people.

- Dell Technologies (DELL) shares gain about 3% despite weak reporting, as the fourth-quarter guidance came in above average market estimates, proving stronger demand for AI infrastructure solutions so the corporation can grow its higher-margin server segment.

- Autodesk (ADSK) stock is up about 8% in reaction to the release of its quarterly results. The company's adjusted EPS came in at $2.67 with a consensus of $2.5, while revenue rose 18% YoY to $1.85 billion versus expectations of $1.81 billion. The main growth driver was the architecture, engineering, construction, and operations (AECO) segment, whose revenue increased 23% YoY. The annual EPS guidance was raised to $10.18-10.25, and revenue guidance was raised to $7.15-7.17 bln.

- The market reacted negatively to Workday 's (WDAY) earnings report: despite EPS growth to $0.94 vs. expectations of $0.87, revenue growth to $2.43 billion, and order book expansion of 17% YoY - the stock is down about 6%. Investors were disappointed by a cautious revision to FY 2026 subscription revenue guidance from $8.81 billion to $8.82 billion.

- Zscaler (ZS) shares are losing about 7% of their value, although the issuer's quarterly revenue grew 26% YoY and adjusted loss per share was better than expected. A widening operating loss and a weaker-than-Wall Street forecast for full-year EPS ($3.78-3.82 vs. expectations of about $4) heightened concerns about margin prospects, which was the catalyst for profit taking after a rally in the cybersecurity sector.

The trading on November 25 on American stock exchanges ended mostly with growth, and the session was marked by the capital flow into shares of small-capitalization companies and securities of rate-sensitive sectors. S&P 500 grew by 0.91%, Nasdaq 100 rose by 0.58%, Dow Jones - by 1.43%, Russell 2000 - by 2.14%. The key driver for the market was the aforementioned expectations of a Fed rate cut in December, the estimated probability of which exceeded 80%.

Most of the "Magnificent Seven" stocks ended trading in the plus, but Nvidia (NVDA: -2.6%) came under pressure amid news about competition. However, quotes of the chipmaker ended the session well above the intraday low, indicating that market participants are inclined to redeem drawdowns in quality stocks. The healthcare sector (XLV: +2.26%) emerged as the growth leader, while the energy sector (XLE: -0.63%) was the outsider.

The macroeconomic background of the day was saturated and generally supported dovish expectations. Retail sales for September increased by only 0.16% m/m with the consensus of 0.4% after the August increase of 0.6%. E-commerce and spending on clothing and sporting goods recorded negative growth. This was partially offset by an increase in spending on gasoline. At the same time, a 0.09% m/m decline in sales of control group goods indicates a cooling of consumer activity. The Producer Price Index (PPI) for Ma confirmed the trend of slowing inflation: the core index grew by only 0.1% mom with average expectations of 0.2% mom after a 0.1% decline in Ma.

The Consumer Confidence Index for November fell to 88.7 points (consensus: 93.3; Oct.: 94.6). Preliminary ADP data signaled a continued decline in the number of jobs. Last week it decreased by 13.5 thousand. All these factors together continue to support expectations of further easing of the MPC, acting as the main growth driver for rate-sensitive sectors.

- Best Buy (BBY: +5.3%) reported last quarter revenue growth of 2.4% YoY to $9.7 billion and adjusted EPS up 11% YoY to $1.4, with an operating margin of 4% (30 bps above expectations). Management noted strong demand in the PC, gaming and mobile categories, as well as the successful launch of a marketplace with over 1,000 sellers. The company posted its fourth consecutive quarter of online revenue growth.

- Novo Nordisk (NVO: +4.7%) presented positive results from a clinical trial of amycretin in patients with type 2 diabetes. This contributes to further expansion of the company's metabolic drug portfolio.

- Burlington Stores' (BURL: -12.2%) gross margin improved to 44.2% (+30 bps) for the quarter, adjusted EBIT margin rose to 6.2% (+60 bps), and adjusted EPS climbed 16% YoY to $1.8. However, the market focused on the tariff pressure on the company's commodity margins and its cautious guidance.

- J. M. Smucker 's (SJM: -3.7%) revenue rose 2.6% YoY to $2.33 bln, with adjusted EPS in line with average forecasts at $2.1. The quotes were pressured by profitability indicators and weak own earnings forecast due to a jump in coffee purchase prices, reinforced by increased US duties on goods from Brazil.

- Alphabet (GOOGL: +1.5%) plans to aggressively lease and sell its own TPU chips for training and inferencing AI models, which caused profit taking in Nvidia (NVDA: -2.6%) shares. Alphabet insiders estimate the potential amount of additional revenue to be about 10% of NVIDIA's annual revenue, which has heightened concerns about the company's share of the AI infrastructure market.

- Alibaba 's (BABA: -2.3%) consolidated revenue increased 5% YoY to RMB 247.8 billion, while the cloud division's revenue growth accelerated to 34% YoY. However, the investment community focused on the 78% YoY drop in adjusted EBITA to ¥9.1 billion due to the company's large investment in the fast commerce segment. Concerns were also aroused by the management's statement that the previously announced three-year RMB 380 billion capex plan for AI solutions and infrastructure development "may turn out to be conservative."

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