📈 Super Micro’s 37% Surge

Good morning.

⚡ The Fast Five → DOJ wants Google to sell Chrome, Druckenmiller bets on health care, Nippon Steel tries to save US Steel deal, McDonald's works to win back customers, Super Micro gets a big bounce back

🔎 Market Trends → Nasdaq, S&P 500 close higher as investors await Nvidia results; US Futures Steady Ahead of Key Earnings Reports

And now…

⏱️ Your 5-minute briefing for Tuesday, November 19, 2024:

MARKET BRIEF
Before the Open

Pre-Market

Fear & Greed

Markets in Review

Markets Hold Steady as Investors Gear Up for Earnings Season

The Nasdaq climbed 0.6% to 18,791.8, the S&P 500 added 0.4% to 5,893.6, while the Dow dipped 0.1% to 43,389.6. Energy led sector gains, while Industrials lagged.

The Big Picture:

With 462 S&P 500 companies already reporting earnings this season, profits are up 6.8% year-over-year on 5% revenue growth, signaling resilience in corporate America. Investors are now eyeing marquee names like Nvidia (NVDA), Walmart (WMT), and Lowe’s (LOW) for clues on sector health.

The Federal Reserve’s rate-cutting cycle is creating a favorable backdrop for equities. Lower interest rates could buoy valuations, particularly in growth-heavy sectors like tech and energy. Meanwhile, WTI crude oil surged 3.3% to $69.21 per barrel as a power outage disrupted production at Norway’s Johan Sverdrup oilfield.

Gold and silver shone as inflation fears eased, with gold rising 1.8% to $2,615 per ounce and silver jumping 2.6% to $31.24 per ounce. These commodities often act as safe havens during macroeconomic uncertainty.

Market Movers:

• Super Micro Computer (SMCI): Rocketed 16% as optimism around AI-driven growth bolstered its outlook. AI's hardware demand continues to drive revenue for chipmakers and server manufacturers.

• Tesla (TSLA): Climbed 5.6% on speculation that a federal framework for autonomous vehicles could expedite the rollout of its robotaxi fleet. Regulatory clarity is a potential game-changer for long-term EV adoption.

• Nike (NKE): Slipped 2.3% as analysts trimmed price targets, citing softening consumer demand in key markets. A challenging retail environment has left brands reliant on deep discounts to move inventory.

What They’re Saying:

“With the Federal Reserve beginning to cut rates, equities appear well-positioned for gains in the months ahead,” said John Stoltzfus, Chief Investment Strategist at Oppenheimer.

WHAT WE’RE WATCHING
Events

• Thurs. Nov 27: Dept. of Labor - Unemployment Claims - 8:30am

• Why You Should Care: Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country's monetary policy.

Earnings Reports

• Today: Walmart, Lowes, Medtronic

• Tomorrow: Nvidia, TJX, Williams Sonoma, Wix, Palo Alto Networks

MARKET BRIEF
Leading News

Super Micro’s 37% Surge: Is the AI Boom Backing the Bounce?

Why it matters:

Super Micro Computer’s (SMCI) hiring of a new auditor and commitment to Nasdaq compliance sent its stock soaring 37% in after-hours trading. For investors, it’s a reminder of the high stakes—and rewards—of AI-driven opportunities despite corporate hiccups.

Zoom Out:

Super Micro, a key player in the AI infrastructure race, has seen its stock battered after a stellar run fueled by its ties to Nvidia (NVDA). Compliance missteps and short-seller scrutiny sent its valuation tumbling from $70 billion to $12.6 billion.

On Monday, the company took a crucial step toward recovery, hiring BDO as its auditor and submitting a compliance plan to Nasdaq. The move signals its intent to stabilize and refocus on its AI-centric growth strategy.

Super Micro’s AI products, powered by Nvidia’s latest Blackwell chips, position the company as a core enabler in the AI supply chain, competing with tech giants like Dell (DELL) and Hewlett Packard Enterprise (HPE).

Deep Dive:

• AI Demand Surge: Super Micro’s fiscal 2023 sales more than doubled to $15 billion, driven by the AI boom.

• Compliance Reset: Nasdaq’s pending review keeps Super Micro in the game but underscores the risks of governance lapses.

• Market Rally Potential: Shares rallied 16% during regular trading and another 37% after-hours, reflecting renewed investor confidence.

Market Pulse:

"This is an important next step to bring our financial statements current," said CEO Charles Liang, emphasizing the company’s urgency in addressing compliance gaps.

Bull’s Take:

Super Micro’s rebound is a testament to AI’s transformative power in tech markets. For savvy investors, the stock’s recovery reflects both high volatility and massive potential. If compliance issues are resolved, SMCI could regain its momentum as a leader in the AI hardware race. Keep an eye on Nasdaq’s compliance review and upcoming earnings reports. With the AI boom still in full swing, buying on dips could unlock long-term value for bold investors.

Headlines

• Justice Department to ask judge to force Google to sell Chrome browser (link)

• Stanley Druckenmiller piled into regional banks and made this health-care stock his biggest bet (link)

• Alibaba's Monetization Strategy Gains Momentum, But GMV Growth Lags (link)

• Nippon Steel not to import from overseas mills in bid to save U.S. Steel deal (link)

• McDonald’s makes a desperate move to win back fleeing customers (link)

• Americans Have Money, And They Plan To Spend It During The Holidays (link)

CRYPTO
Fear & Greed

Headlines

• More companies name BTC a treasury reserve asset (link)

• Spot Bitcoin ETF Options Could Start Trading As Early As Tomorrow (link)

• Binance clarifies 'rewards-bearing' BFUSD asset is not a stablecoin, hasn't launched (link)

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On the Socials