U.S. stocks were little-changed by the close of trading Wednesday, while Treasury yields and the dollar resumed their recent climbs, as investors looked to tempered risk from the Russia-Ukraine conflict while they prep for a key earnings release from the world's most-valuable company.
Markets were clearly fixated on Nvidia's third quarter results, which arrive after the close of trading, and activity was muted throughout the session. Shares in the AI chipmaker, which have risen more than 60% this year, slipped 0.76% on the session to close at $145.89 each.
Treasury yields were active, however, following a mixed auction of 20-year bonds that saw a notable pullback in demand and comments from Federal Reserve Governor Michelle Bowman, who reiterated the central bank's view of a patient approach on future rate cuts.
"I would prefer to proceed cautiously in bringing the policy rate down to better assess how far we are from the end point, while recognizing that we have not yet achieved our inflation goal and closely watching the evolution of the labor market," Bowan told an even in West Palm Beach, Florida.
The S&P 500 was marked 0.23 points, or 0.005% higher in the immediate close, with the Nasdaq down 21 points, or 0.11% and the Dow gained 140 points, or 0.38%.
Benchmark 10-year note yields were last seen trading at 4.416% while 2-year note yields rose to 4.321%
S&P 500 Closing Bell Heatmap (Nov. 20, 2024)$SPY unch⬜$QQQ -0.11%🟥$DJI +0.32%🟩$IWM +0.11%🟩 https://t.co/GcRBSLcxCg pic.twitter.com/g4MkNSTgz7
— Wall St Engine (@wallstengine) November 20, 2024
Updated at 1:09 PM EST
Soft auction
Investors balked at a sale of $16 billion in new 20-year bonds this afternoon, with demand ratios falling and foreign buyers pulling back from recent purchases.
Bond investors placed bids worth $44.5 billion for the auction, generating a so-called 'bid-to-cover' ratio of 2.34, well south of the six-auction average of 2.6. Foreign central banks, meanwhile, took down 69.5% of the sale, just shy of the 71.6%.
Benchmark 10-year Treasury note yields jumped higher in the wake of the sale, and were last marked at 4.408%
Stocks, meanwhile, continued to trend lower into the final hours of trading, with the S&P 500 last marked 31 points, or 0.53% lower and the Nasdaq down 141 points, or 0.75%
US 20-YEAR BOND AUCTION
— FinancialJuice (@financialjuice) November 20, 2024
BID-TO-COVER RATIO 2.34
HIGH YIELD 4.680% VS 4.650% PRE-SALE WI
SELLS $16 BLN
AWARDS 13.41% OF BIDS AT HIGH
PRIMARY DEALERS TAKE 22.61%
DIRECT 7.92%
INDIRECT 69.47%
Updated at 11:32 AM EST
Cold Feet?
Nvidia shares are moving lower in mid-day trading with all eyes fixed on the group's third quarter earnings after the closing bell.
Investors, however, aren't terribly worried about what Nvidia is likely to report, and expect a near doubling of revenues to $31.1 billion and an overall profit of $17.4 billion. What is unknown, however, is how delays and snags to the Blackwell launch will affect January quarter earnings and how, if at all, Nvidia's near-term guidance will reflect that.
For investors who do not own Nvidia, it may be best to wait for a pullback instead of establishing a position in this name when the stock is near record highs," said Clark Bellin, president and chief investment officer at Bellwether Wealth in Lincoln, Nebraska, who argues Nvidia stock is "priced to perfection".
"For investors who are looking for exposure to AI, there are other areas of the market that are tied to the AI story with more attractive valuations, such as utilities and companies focused on strengthening the electrical grid and supply of electricity," he added.
Nvidia shares were last marked 1.5% lower at $144.83 each, pegging the stock's one-month gain at around 0.65%.
Related: Analysts flag Nvidia earnings, massive stock price swing
Updated at 9:35 AM EST
Muted open
The S&P 500 was marked 4 points lower at the start of trading, with the Nasdaq slipped 38 points, or 0.21% from last night's close.
The Dow gained 65 points while the mid-cap Russell 2000 fell 3 points, or 0.14%
S&P 500 Opening Bell Heatmap (Nov. 20, 2024)$SPY +0.03%🟩$QQQ -0.15%🟥$DJI +0.16%🟩$IWM -0.16%🟥 pic.twitter.com/RZjgRIefrC
— Wall St Engine (@wallstengine) November 20, 2024
Updated at 8:26 AM EST
Spin City
Comcast (CMCSA) shares jumped higher in early trading after the media group confirmed plans to spin-off some of its cable networks, including MSNBC and CNBC, into a stand-alone company.
The group, which will be established next year, will also include digital assets such as Rotten Tomatoes and Fandango, which, when combined with the other brands in the new 'SpinCo' portfolio, generated around $7 billion in revenues over the three months ending in September.
“When you look at our assets, talented management team and balance sheet strength, we are able to set these businesses up for future growth,” said CEO Brain Roberts. “With significant financial resources from day one, will be ideally positioned for success and highly attractive to investors, content creators, distributors and potential partners.”
Comcast shares were marked 2.1% higher in premarket trading to indicate an opening bell price of $43.20 each.
📺🔄 Comcast to spin off cable TV networks amid streaming shift
— PiQ (@PiQSuite) November 20, 2024
Tickers of interest: $CMCSA
Full Story → https://t.co/nb7Guip8Wh pic.twitter.com/2z9ShysNHh
Updated at 6:43 AM EST
Off Target
Target shares plummeted in early trading after the retailer posted weaker-than-expected third quarter earnings and issued a muted forecast for the crucial holiday season.
Target, which has been losing market share to Walmart, sees fiscal-fourth-quarter profit in the region of $1.85 to $2.45 a share, well shy of Wall Street forecasts, citing "soft discretionary trends and multiple cost headwinds."
Target shares were marked 20.3% lower in premarket trading immediately following the earnings release to indicate an opening-bell price of $124.
$TGT 2025 F/Y GUIDANCE
— *Walter Bloomberg (@DeItaone) November 20, 2024
🔸 Sees ADJ EPS $8.30 to $8.90, saw $9 to $9.70, EST $9.57
GUIDANCE: Q4
🔸 Sees ADJ EPS $1.85 to $2.45, EST $2.65
RESULTS: Q3
🔸 Comparable sales +0.3% vs. -4.9% y/y, EST +1.48%
🔸 Comp digital sales +10.8%, EST +4.69%
🔸 Sales $25.23B, +0.9% y/y, EST…
Stock Market Today
Stocks ended higher on Tuesday after an afternoon rally pulled both the S&P 500 and the Nasdaq into positive territory as Russia played down changes to its nuclear doctrine following strikes by U.S.-made missiles from Ukraine.
The unwinding of safe-haven trades, which had pushed U.S. Treasury bond yields sharply lower, was also evident in overnight trading, where bitcoin hit a fresh all-time high and traded north of $94,000 and gold fell around 0.3% per ounce amid the improving sentiment.
Treasury yields were back on the move heading into the New York trading session, with benchmark 10-year notes pegged at 4.418% and 2-year paper changing hands at 4.289%.
Getty
On Wall Street the focus will likely shift to a busy corporate-earnings slate, with updates from retailer Target (TGT) before the bell and Nvidia (NVDA) after the close of trading.
Nvidia, which represents around 7.5% of the weighting of the S&P 500 and around 9% of the Nasdaq, is expected to post a huge 83% surge in overall revenue, which are forecast at $33.1 billion, and to guide investors to double-digit gains on the back of Blackwell GPU demand in the tech giant's fiscal fourth quarter.
Related: Nvidia earnings on deck as AI kingpin tightens grip against rivals
"Nvidia heads into earnings with elevated expectations," said Hightower's chief investment officer Stephanie Link. "The stock is up 172% [this year] and 5% over the past month, with anticipation of a beat-and-raise tempered by potential revenue deceleration as the market awaits the [next-generation] Blackwell product."
"Despite the stock trading at 37 times, Nvidia remains the leader in AI, with accelerated bookings from cloud service providers and significant hyperscaler spend growth (17% quarter over quarter)," she added. "While I see early innings for AI, I’m more of a buyer on weakness than chasing here."
With that update in focus, and with options traders braced for price swings of around 9% in either direction for a $3.6 trillion stock after Nvidia reports, markets are set for a muted open to start the trading day.
Futures contracts tied to the S&P 500 suggest a modest 10-point opening-bell gain while those linked to the Dow Jones Industrial Average are priced for a 35-point bump.
The tech-focused Nasdaq, meanwhile is called 13 points higher with Nvidia marked 0.25% in the green and changing hands at $147.35.
More Wall Street Analysts:
- Walmart analysts reset stock price targets ahead of Black Friday
- Analysts revamp Cisco stock price targets after earnings
- Analysts revisit Applied Materials stock price targets after Q4 earnings
In overseas markets, a faster-than-expected reading for U.K. inflation put a cap on bets for a December rate cut from the Bank of England and held down gains for the FTSE 100, which was marked 0.16% higher in midday London trading.
Overnight in Asia, Japan's Nikkei 225 finished 0.16% lower as the yen remained elevated against the U.S. dollar and tech stocks slipped ahead of the Nvidia earnings update.
Related: Veteran fund manager sees world of pain coming for stocks
