📈 Zoom’s AI Pivot

Good morning.

⚡ The Fast Five → MicroStrategy buys another $5.4B of Bitcoin, Kohl's names third CEO in 3 years, Macy's employee hid $154M, Trump vows tariffs on China-Canada-Mexico, Zoom beats expectations but slides

🔎 Market Trends → Wall St closes higher after Trump picks Bessent; US Futures Edge Lower After Upbeat Session

And now…

⏱️ Your 5-minute briefing for Tuesday, November 26, 2024:

MARKET BRIEF
Before the Open

Pre-Market

Fear & Greed

Markets in Review

Dow Hits Another Record High as Yields Slide

The Dow Jones Industrial Average soared 1% to close at a record 44,736.6, marking its latest milestone in a remarkable rally. The S&P 500 and Nasdaq also edged up, gaining 0.3% each to 5,987.4 and 19,054.8, respectively. Treasury yields took a dive, with the 10-year yield dropping 13.5 basis points to 4.28%.

The Big Picture:

Investors cheered news of President-elect Donald Trump’s nomination of Scott Bessent as Treasury Secretary, a pick seen as favorable to Wall Street’s interests. Optimism spread across sectors, with real estate stocks leading the charge, while energy and tech lagged behind.

Commodities showed signs of weakness. WTI crude dropped 3.1% to $69.06 per barrel, ending its recent upward streak as geopolitical tensions simmered without major escalation. Meanwhile, gold slid 3.1% to $2,627.50 per ounce, reflecting a shift toward risk-on sentiment.

Earnings season continued to deliver mixed results. While 75% of S&P 500 companies have beaten estimates, the success rate has dipped from last quarter's 80%, signaling potential cracks in corporate growth momentum.

Market Movers:

• Nike (NKE): Shares climbed 2.4% after an upgrade from DZ Bank, which cited confidence in the sportswear giant’s growth trajectory. The company is benefiting from resilient consumer spending and strong global brand equity.

• Bath & Body Works (BBWI): A standout performer, surging 16.5% on upbeat Q3 earnings and a raised full-year forecast. Management’s strategic shift to higher-margin products appears to be paying off.

• ONEOK (OKE): Dropped 4.7% following its $4.3 billion all-stock deal to acquire EnLink Midstream (ENLC), which also fell 0.95%. Investors worry about the deal's dilution and integration risks in a softening energy market.

What They’re Saying:

"Markets are basking in the glow of a Wall Street-friendly Treasury pick," noted Macquarie analysts. "But caution is warranted as earnings momentum appears to be losing steam."

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: Dell, CrowdStrike, Workday, Autodesk, HP, Best Buy, Burlington, Dick’s

• Tomorrow: Frontline, Macro Bank

MARKET BRIEF
Leading News

Zoom Keeps the Spotlight, But Investors Hit Pause

Why it matters:

Zoom’s (ZM) third-quarter earnings smashed expectations, showing resilience post-pandemic. But a slight guidance uptick and tepid stock reaction underscore investor caution about its long-term growth story.

Zoom Out:

Zoom isn't just about video calls anymore. With AI-driven tools like its Contact Center and a soon-to-launch Custom AI Companion, the company is reinventing itself as an enterprise productivity hub.

Third-quarter revenue hit $1.18 billion, growing 3.6% year-over-year, and adjusted EPS soared to $1.38, beating Wall Street’s $1.31 projection. Yet shares dipped 5.5% after hours, signaling muted excitement about what’s next.

With fiscal-year revenue guidance now set at $4.656-$4.661 billion (+3% growth), CEO Eric Yuan highlighted Zoom's evolution into an "AI-first work platform." Still, the market wants proof that the pivot will yield sustained double-digit growth.

Deep Dive:

• Enterprise clients steady: Zoom added 800 enterprise customers, bringing the total to 192,400—a vital metric as consumer demand wanes.

• AI expansion: A premium Custom AI Companion launches in 2025, integrating with platforms like ServiceNow (NOW) and Workday (WDAY).

• Pandemic pullback: Analysts note many “pandemic darlings” like Zoom face challenges proving relevance in a normalized market.

Market Pulse:

"The stock’s washout valuation reflects tempered expectations, but Zoom's pivot toward enterprise AI has potential to reignite growth," JPMorgan analysts noted.

Bull’s Take:

Zoom’s AI ambitions and steady enterprise adoption make it a solid play for long-term investors betting on productivity tools for hybrid work. Short-term skepticism aside, a 24% YTD gain signals the market hasn’t entirely lost faith. Keep an eye on Q1 2025 when Zoom’s AI offerings debut. The stock’s current dip may present an entry opportunity for those bullish on AI-driven enterprise growth.

Headlines

• MicroStrategy spends $5.4 billion buying another 55,000 bitcoins, shares slide (link)

• Kohl’s names Michaels CEO Ashley Buchanan to assume top job (link)

• Macy’s says employee hid up to $154 million in expenses, delaying Q3 earnings (link)

• Trump vows an additional 10% tariff on China, 25% tariffs on Canada and Mexico (link)

• France makes a multi-million euro offer to buy Atos' computing activities (link)

• U.S. charges top portfolio manager, former Wamco co-CIO Kenneth Leech, with fraud (link)

CRYPTO
Fear & Greed

Headlines

• Why Bitcoin's Rally Is Stalling Below $100,000 (link)

• Video platform Rumble plans to buy up to $20 million in bitcoin in new treasury strategy (link)

• Ethereum reclaims USDT dominance, overtaking Tron for first time since 2022 (link)

DAILY SHARE
On the Socials