Morning in New York: Investors hope for a speedy end to the shutdown

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

The focus for investors today will be on developments in the federal government shutdown. The day before, the Senate approved a procedure that allows for a final vote on the terms of the shutdown to take place this Monday. The Democratic caucus agreed not to include an immediate extension of health care subsidies (ACA) as part of the terms of the budget passage in exchange for Republican assurances to hold a vote on the issue in December. As a result, Polymarket estimates the likelihood of the shutdown ending before November 15 to be about 85%, or nearly 50% higher than last Friday. This development significantly reduces political uncertainty and is the main positive driver for the stock market. However, the parameters of the federal budget are yet to be approved by the House of Representatives and approved by the President.

China's Ministry of Commerce announced a one-year suspension of controls on exports to the United States of a number of critical minerals used in the manufacture of military equipment, semiconductors and other high-tech products. The move, part of an earlier trade truce, further reduces risks to global supply chains and supports optimism among exchange players.

TeraWulf (WULF), Barrick Mining Corporation (B), Maplebear (CART), Bitdeer Technologies (BTDR), The Interpublic Group (IPG), monday.com (MNDY) and Pagaya Technologies (PGY) will report quarterly results before the open. Rigetti Computing (RGTI), CoreWeave (CRWV), AST SpaceMobile (ASTS), BigBear.ai (BBAI), Plug Power (PLUG) and Occidental Petroleum (OXY) will release their reports after the main session.

Futures on US indices are showing positive dynamics amid news about possible end of the shutdown. We assess the balance of risks as positive with a high level of volatility. We focus on S&P 500 fluctuations in the range of 6700-6800 points (from -0.4% to +1.1% to the previous session's closing level).

- NVIDIA (NVDA) has asked TSMC (TSM) for additional vafers to meet the high demand for Blackwell series chips.

- Visa (V) and Mastercard (MA) are close to an agreement with commercial entities and lower fees.

- The news of a partnership with India's Emcure Pharmaceuticals could support Novo Nordisk (NVO) shares as it will allow the Danish pharma giant to exclusively distribute and sell its popular weight loss drug Poviztra in the strategically important Indian market.

- Shares of Capital One (COF) may be under pressure due to a federal court's rejection of the company's proposed $425 million settlement, reintroducing legal uncertainty in a case involving under-interest rates for depositors and increasing the risk that the final payout could be significantly higher than the original amount.

- The news of the acquisition of German AI company Northern Data is likely to increase the volatility of quotes of video platform Rumble (RUM). The deal, worth about $767 million, will be fully paid in stock. It marks Rumble's strategic pivot into cloud and AI technologies.

Trading on November 7 on the U.S. stock exchanges ended mixed. S&P 500 added 0.13%, NASDAQ 100 fell by 0.28%, Dow Jones rose by 0.16%, and Russell 2000 - by 0.58%. Broad market quotes reversed upward in the afternoon on news of budget negotiations. Although the Democrats' proposal to end the shutdown was rejected by the Republican Party (GOP), investors remained positive after reports emerged that the Senate plans to continue work over the weekend to find a solution. Notably, the S&P 500 (RSP) outperformed its capitalization-weighted counterpart by 0.84pc, indicating breadth of gains beyond megacaps. The "Magnificent Seven" stocks moved without a single dynamic. Tesla (TSLA: -3.68%) showed the most notable decline amid news of shareholder approval of Elon Musk's remuneration package. Amazon (AMZN: +0.56%) traded in the plus. The consumer staples sector (XLP: +1.47%) led the growth, while the technology sector (XLK: -0.35%) was the outsider.

The main macroeconomic event of the day was the publication of preliminary data on the consumer sentiment index from the University of Michigan for November. The index amounted to 50.6 points with a consensus of 53. The deviation from forecasts was caused by concerns about the shutdown. This creates uncertainty about the sustainability of consumer demand, which is a key factor for the US economy. At the same time, inflation expectations for the year ahead rose to 4.7%, while five-year expectations fell to 3.6%.

Additional influence on investor sentiment was provided by comments of the Fed representatives, who generally maintain a cautious approach. Deputy Head of the regulator Philip Jefferson spoke in favor of a gradual adjustment of the DCP in the context of a lack of macro data. Head of the FRB of New York John Williams admitted the possibility of soon resumption of balance sheet expansion, which is a signal in favor of a softer policy.

- Expedia Group (EXPE: +17.6%) shares soared on the back of the release of strong third-quarter results. Investors were encouraged by accelerating B2B and B2C revenue growth, expanding market share in the U.S., as well as an improved outlook for the fourth quarter and higher profitability guidance for fiscal 2026.

- Monster Beverage (MNST: +5.2%) reported sales and earnings above consensus for the quarter. Additional positive for investors were management's comments on strong sales growth in October and upcoming price increase in the US.

- Constellation Energy's (CEG: +2%) third-quarter adjusted earnings fell short of estimates, but the narrowing of management's full-year earnings guidance was taken by the market as a sign of stability.

- Shares of Take-Two Interactive (TTWO: -8.1%) came under heavy pressure despite exceeding the guideposts for the fiscal second quarter. The key negative news for investors was the announcement that the release date of the long-awaited Grand Theft Auto VI game has been pushed back to November 2026.

- Most of Block's (XYZ: -7.7%) key third-quarter numbers beat expectations, but its quotes declined as investors focused on the narrowing spread between gross payment volume and gross profit. The correction is also attributed to massive profit taking on the stock, which was a popular long position before the release.

- Microchip Technology (MCHP: -5.2%) shares were pressured by a cautious guidance for the current quarter. However, despite expectations of seasonally weak results and some customers postponing orders, management noted positive signs. These included a 10% increase in orders and progress in inventory normalization, which sets the stage for strong results in 2026.

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