The Weekly Drop - November 27th, 2023
The market is at a critical point, is there steam left in the Santa Rally?
Good morning investors!
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After the holiday shortened week, there is a lot to keep up with this week but that’s why you subscribe to this newsletter — I cut through all of the BS and give you what you need to know in easy to digest, bite sized pieces of content.
Grab your coffee and let’s dive in.
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Market Recap
I’ll be honest, there wasn’t much going on last week and between my recent move and the holiday, I decided to take it easy and didn’t really pay attention to markets all that much. That’s where having systems in place come in handy and mine certainly helped me last week. Community members get a first hand look at my systems every week.
Here’s what I can say happened:
The S&P rose 1%
Jobless claims fell
Existing home sales fell
Consumer sentiment was better than expected but still lower than last month
PMI data was weak
Nvidia blew earnings estimates out of the water but ended the week lower
Honestly, that’s really all that happened. Let’s focus on the two major earnings reports from the week
Nvidia
My prediction from last week:
I don’t foresee any issues with the third quarter numbers but with extremely high valuations and high expectations for the next few quarters, I think any reduced guidance sends shares into free fall. There is no room for mistakes for Nvidia — I wouldn’t touch this company with a ten foot pole right now. ✅
Nvidia crushed earnings and revenue estimates and revised guidance higher, but the company expects Q4 sales to China to significantly decline due to export restrictions. That news sent shares tumbling 3% on the week.
Lowe’s
My prediction from last week:
The company has missed 2 of the last 3 quarters when it came to revenue. With the strong consumer and reduced inflationary pressure, I tend to think Lowe’s beats estimates this quarter. With the stock being rewarded from Home Depot’s earnings last week, I don’t see much upside after the report unless guidance comes in very strong, which I don’t believe will be the case. ❌ ✅
Lowe’s not only missed on the top and bottom lines, which I was wrong on, but also reduced forward guidance as expected. The stock fell 2.3%.
Discord
As always, if you want to see a breakdown of all the earnings and economic reports from last week, head to my Discord. Here’s a sneak peek:
The Week Ahead
With some major names on the earnings calendar and several key economic reports on the docket, the week ahead could be an eventful one. Especially as November comes to an end and the market sits at a critical level.
Earnings Reports
Major companies including Salesforce, TD Bank, Crowdstrike and Dollar Tree are set to report earnings this week.
As I have been saying all earnings season, there should be no surprises for the last quarter. The consumer was strong, the economy was chugging along and the reports should continue to indicate that. But pay attention to the forward guidance, that is the key.
*Note - I will be creating one page summaries for key reports. Be sure to follow me on Twitter.
Let me know in the comments what stocks you are watching.
And be sure you don’t miss anything by joining the Discord.
Economic Reports
The report everyone will be watching will be the PCE report on Thursday. Not only is this the key inflation data the Fed pays the closest attention to, it’s one of the final reports ahead of the Fed’s next rate hike decision.
On top of the PCE report, there are also several housing reports, a GDP report, another PMI report and a plethora of speeches from Fed members including Jerome Powell on Friday.
Again, be sure you don’t miss anything by joining the Discord. I provide full breakdowns of every report as they are released.
What CMG is Watching
It’s time for the moment you have all been waiting for - exactly what I am watching in the week ahead and how I’m playing it. Unfortunately, this is only for the premium subscribers.
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