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Market Moves Yesterday
S&P 500 @ 6,090.27 ( ⬆️ 0.25%)
Nasdaq Composite @ 19,859.77 ( ⬆️ 0.81%)
Bitcoin @ $98,538.12 ( ⬇️ 2.56%)
Hey Scoopers,
Happy Monday! Here’s what we’re covering today 👇
👉 Lululemon’s recent quarter
👉 Analysts expect stocks to outperform
👉 Cyber Monday shopping trends
So, let’s go 🚀
Market Wrap
Stock futures edged lower Monday morning following the third consecutive weekly gain for the S&P 500 and Nasdaq Composite, as investors brace for crucial inflation data later this week.
The S&P 500 and Nasdaq reached new record highs on Friday, advancing 0.96% and 3.34% for the week. The Dow Jones Industrial Average bucked the trend, declining 0.6% over the same period.
Markets remained upbeat after November's employment report showed robust but not excessive job growth, preserving optimism for potential Federal Reserve rate cuts.
According to the CME FedWatch Tool, traders are now pricing in an 85% probability of a quarter-point rate reduction at the December 18 meeting.
The upcoming November consumer price index report, scheduled for Wednesday, is anticipated to show a modest increase in inflation.
Economists surveyed by Dow Jones predict monthly and annual increases of 0.3% and 2.7%, respectively, slightly above October's figures of 0.2% and 2.6%.
Meanwhile, Monday's economic calendar features October wholesale inventories data at 10 a.m. ET. In corporate news, technology giant Oracle is set to report earnings after the market closes.
Trending Stocks 🔥
Petco - The stock jumped 8% after the pet retailer reported a loss of $0.02 per share, compared to estimates of a loss of $0.04 per share.
DocuSign - Shares of the e-signature company soared 28% after it forecast fiscal Q4 revenue between $758 million and $762 million, exceeding the consensus forecast of $756 million. It also topped revenue and earnings estimates in Q3.
Ulta Beauty - The beauty retailer climbed 9% after it reported revenue of $2.53 billion and earnings of $5.14 per share in Q3, above estimates of $2.50 billion and $4.54 per share, respectively.
Lululemon Crushes Q3 Estimates
Athletic apparel retailer Lululemon reported better-than-expected third-quarter results, with earnings of $2.87 per share and revenue of $2.40 billion, representing a 9% year-over-year increase.
Comparatively, Wall Street forecast revenue of $2.36 billion and earnings per share of $2.69 in fiscal Q3 (which ended in October).
While U.S. growth continues to decelerate, with domestic comparable sales up just 2%, the company's international expansion is proving successful, particularly in China, where sales surged 33%.
Lululemon faced challenges earlier this year, including a fumbled product launch and inventory mismanagement in its core women's business.
However, under new leadership following the departure of Chief Product Officer Sun Choe, Lululemon has implemented organizational changes that appear to be paying off.
Analyst Neil Saunders notes that the brand's women's range is now "fresh and interesting," contributing to improved conversion rates.
Looking ahead to the holiday season, CEO Calvin McDonald is cautious, citing the shortened shopping period and uncertain economic environment.
The company expects fourth-quarter revenue between $3.48 billion and $3.51 billion, representing 8-10% growth. For fiscal 2024, Lululemon raised its full-year guidance slightly, projecting revenue of $10.45-10.49 billion.
Cyber Monday Sales Rose 7.3%
The 2024 Cyber Monday shopping extravaganza hit new heights, with US consumers spending $13.3 billion, representing a 7.3% increase from the previous year.
During peak hours, spending reached an astounding $15.8 million per minute. The five-day shopping period from Thanksgiving through Cyber Monday generated a record $41.1 billion in sales.
Mobile commerce played a pivotal role, accounting for $7.6 billion of total spending or 57% of online sales, a significant jump from 33% in 2019.
Popular purchases included toys (notably Elf on the Shelf, Lego sets, and Harry Potter figurines), consumer electronics, and gaming consoles.
Key Highlights:
Total projected holiday spending (Nov 1-Dec 31): Expected to exceed $240 billion
Thanksgiving Day and Black Friday sales increased by 8.8% and 10.2% respectively
"Buy now, pay later" programs contributed nearly $1 billion
Discounts peaked at 23% for apparel and 22% for TVs and computers
Social media influencer-driven sales rose 7% from the previous year
Global sales reached $49.7 billion, up 3% year-over-year
The data suggests a significant shift toward online shopping, with brick-and-mortar retail showing a slight decline of 0.3% despite gains across most spending categories.
HSBC Expects the S&P 500 to Gain 10%
HSBC Bank believes the S&P 500 (a key measure of the U.S. stock market) will rise by about 10% in 2025, reaching 6,700 points. The market has already done well in 2024, increasing by 28%.
While this year's growth came from company earnings and investors willing to pay a premium for stocks, next year's growth will mainly come from companies making more money.
So, what's helping the market?
The U.S. economy is expected to slow down but stay healthy
Inflation should continue to decrease
The Federal Reserve might lower interest rates significantly
Presidential elections typically boost stock prices
UBS is also optimistic about stocks for 2025, especially in sectors such as technology, utilities, and financials. The investment firm emphasized that stocks usually do well during presidential election years, gaining about 5% on average after elections since 1928.
Barclays points out that when Republicans controlled both Congress and the White House in the past, stocks typically performed better than during split control, though they noted this had only happened four times since 1949.
Elsewhere, Wolfe Research claimed that the rally might stall temporarily, with some parts of the market starting to pull back. For example, transportation and bank stocks have dropped about 5% from their recent highs.
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