Morning in New York: news expectations triggered a correction

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 18, futures on U.S. indices continue the negative dynamics of the previous session, following the results of which the key indices fell below the 50-day moving averages. Investors are cautious ahead of the NVIDIA report, FOMC minutes and labor market data scheduled for this week.

President Trump is set to meet with Saudi Crown Prince Mohammed bin Salman in Washington this Tuesday. The talks will focus on defense cooperation, including the potential sale of F-35 fighter jets, access to U.S. AI technology, and the development of a civilian nuclear program. Any agreements reached during the meeting could have a significant impact on the defense, technology and energy sectors.

Also of great importance will be the NAHB Homebuilder Sentiment Index for November (consensus: 37 points, unchanged from October). This indicator is an important leading indicator for the sector, and the persistence of the indicator at low levels will indicate the still pessimistic mood of developers. Additional information on the state of the regional economy will be provided by the index of business activity in the service sector of New York for November (October: -23.6 points).

The Home Depot (HD), PDD Holdings (PDD), Medtronic (MDT), Baidu (BIDU), Futu Holdings (FUTU), Amer Sports (AS) and James Hardie (JHX) will report before the open of the main session. Powell Industries (POWL ), Sociedad Química y Minera de Chile S.A. (SQM) and QFin Holdings (QFIN) will release their quarterly results after the close of trading.

Futures on US indices demonstrate negative dynamics. We assess the balance of risks for the upcoming trades as moderately negative with average volatility. We focus on the S&P 500 fluctuations in the range of 6600-6710 points (from -1.1% to +0.6% to the closing level of the previous session).

- Shares of Axalta Coating Systems (AXTA) soared more than 15% in the premarket on a Bloomberg report that merger talks with Dutch rival Akzo Nobel have entered an advanced phase. The merger could create one of the industry leaders.

- The publication of clinical trial results in the respected medical journal JAMA Pediatrics has supported Ascendis Pharma (ASND) shares, which are up almost 2% before the opening of main trading. The positive data confirms the efficacy of the company's drug for the treatment of achondroplasia.

- Shares of oilfield services company Helmerich & Payne (HP) are declining, rebounding from the release of its financials. The announcement of placement of seven idle drilling rigs in Saudi Arabia did not compensate the negative from weak financial results.

- Nuvalent (NUVL) quotes reacted negatively to plans for an additional equity offering of about $500 million, which poses a risk of dilution to its holders' stakes and adds pressure to the quotes.

Trading on November 17 on American stock exchanges, as in the previous two days, ended in the red zone. S&P 500 lost 0.92%, NASDAQ 100 fell by 0.83% Dow Jones fell by 1.18%, Russell 2000 - by 1.96%. The pressure on the indices was exerted by shares of technological and financial companies.

The companies of the "Magnificent Seven" showed multidirectional dynamics. Quotes Apple (AAPL: -1.82%) went into a noticeable minus on the background of reports about the preparation of a plan to transfer the post of CEO. The correction in NVIDIA (NVDA: -1.88%) took place on the eve of the publication of the quarterly report. At the same time, shares of Alphabet (GOOGL: +3.11%) were supported by the news of its purchase by Berkshire Hathaway for $4 bln.

In the broad market, only the utilities sector (XLU: +0.9%) remained in plus. The financial sector (XLF: -1.91%) was the outsider.

The Empire State Manufacturing Survey for November unexpectedly rose to a one-year high of 18.7 points (consensus: 5.8 points, October: 10.7). This strengthens the position of "hawks" in the Fed, who are in favor of maintaining high rates. Against this background, Christopher Waller, a member of the regulator's Board of Governors, again spoke in favor of a rate cut in December, but his colleague Philip Jefferson pointed to increased risks to the labor market, calling for caution in adjusting the MPC.

- Positive results from a Phase 3 clinical trial of a gastric cancer drug led Jazz Pharmaceuticals ' (JAZZ: +20.6%) stock price to soar. The company reported a statistically significant improvement in patient survival.

- The launch of the beta version of the Qwen app in China supported Alibaba (BABA: +2.5%). The move is part of the company's strategy to strengthen its position in the highly competitive generative AI market.

- The announcement of the $3.05 billion acquisition of anti-tumor drug developer Halda Therapeutics sent Johnson & Johnson (JNJ: +1.9%) shares higher.

- The emergence of details of the takeover deal by CD&R Fund put pressure on Sealed Air (SEE: -3.1%) quotations, as its price was set at $42.15 per share, i.e. below Friday's closing level. This disappointed investors who expected a higher premium.

- The announcement of the $1.335 billion cash purchase of OmniMax International led to a collapse in shares of Gibraltar Industries (ROCK: -20.3%). The deal will be financed primarily through new credit facilities. Management expects EPS to begin to be impacted by the takeover in the first full year after completion.

- Weak quarterly results and below consensus earnings guidance for 2026 drove a sharply negative reaction in Aramark 's (ARMK: -5.2%) stock price, despite reported organic revenue growth.

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