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Stock Market Analysis for November 14, 2024: A Day of Mixed Signals and Post-Election Rally Fatigue
The U.S. stock market closed on November 14, 2024, with a mix of gains and losses, as the post-election rally that had been driving markets higher began to lose steam. Here’s a detailed breakdown of the key events and market movements that defined the day.
Market Performance
The Dow Jones Industrial Average ($DJI) rose 0.1% to close at 43,958.19, with an intraday high that saw the index up more than 230 points[3][4][5].
The S&P 500 gained a modest 1.39 points to finish at 5,985.38, with eight out of its 11 broad sectors ending in positive territory. The Consumer Discretionary Select Sector SPDR ($XLY), the Real Estate Select Sector SPDR ($XLRE), and the Energy Select Sector SPDR ($XLE) advanced 0.9%, 0.8%, and 0.8%, respectively[3].
In contrast, the tech-heavy Nasdaq Composite finished at 19,230.72, sliding 0.3% due to weak performance by several corporate giants[3].
Economic Data: CPI and Its Implications
The Department of Labor reported that the Consumer Price Index (CPI) for October increased 0.2%, aligning with consensus estimates and the September metric. On a year-over-year basis, CPI rose 2.6% in October, up from 2.4% in September. Inflation-adjusted average hourly earnings for workers increased 0.1% month-over-month and 1.4% year-over-year[3].
The core CPI, excluding volatile food and energy items, increased 0.3% in October, matching expectations and the September figure. Year-over-year, core CPI remained at 3.3%, while the three-month annualized rate for core CPI rose to 3.6% compared to 3.1% in the prior three months[3].
These inflation numbers have significant implications for monetary policy. Following the release of the October CPI data, the CME FedWatch interest rate derivative tool indicated an overwhelming 83% probability that the Federal Reserve will reduce the benchmark lending rate by another 25 basis points in December. This marks a significant shift from the less than 60% probability seen just a day earlier, suggesting market participants are increasingly expecting a full 1% rate cut in 2024[3].
Earnings Reports: Winners and Losers
Several notable companies reported their quarterly earnings, influencing market sentiment.
- Griffon Corp. ($GFF) reported fourth-quarter fiscal 2024 earnings of $1.47 per share, beating the Zacks Consensus Estimate of $1.21 per share. The company's quarterly revenues of $659.67 million also surpassed expectations by 2.75%. This strong performance led to a 18.2% jump in Griffon's stock price[3].
- Arcos Dorados Holdings Inc. ($ARCO) came out with quarterly earnings of $0.17 per share, exceeding the Zacks Consensus Estimate of $0.16 per share. The company's quarterly revenues of $1.13 billion surpassed expectations by 3.97%, resulting in a 2.4% increase in its stock price[3].
On the other hand, Super Micro Computer ($SMCI) declined 6.3% after announcing it would not submit its fiscal first-quarter results on time. Rocket Companies ($RKT) was down 9.1% following weak Q3 results and soft guidance[4].
Notable Gainers
- Walt Disney Co. ($DIS) led the market with a 7.8% jump after reporting stronger-than-expected profits for the latest quarter. CEO Robert Iger attributed the improved profits to the company's streaming businesses and strong box-office results for movies like “Inside Out 2” and “Deadpool & Wolverine”[5].
- Tapestry ($TPR) shares surged 12.7% after the luxury fashion company announced it was terminating its merger with Capri, another luxury brand owner. The merger, valued at $8.5 billion, had faced numerous challenges, including a lawsuit from the Federal Trade Commission on antitrust grounds[5].
Market Sentiment and Volatility
The fear-gauge CBOE Volatility Index ($VIX) was down 6.7% to 14.02, indicating a decrease in market volatility. However, decliners outnumbered advancers on the NYSE by a 1.41-to-1 ratio, and on Nasdaq, a 1.95-to-1 ratio favored declining issues[3].
Futures and Global Markets
U.S. stock futures were steady on Thursday morning, with Dow Jones Industrial Average futures up 0.07% and S&P 500 futures up 0.04%. However, Nasdaq 100 futures dipped 0.02%[4].
European markets opened slightly higher as investors weighed the possibility of another Fed interest rate cut in December following the latest U.S. inflation data. In contrast, Asia-Pacific indices closed in the red, with Hong Kong’s Hang Seng index down 1.96%, Japan’s Nikkei and Topix indices lower by 0.48% and 0.27%, respectively, and China’s Shanghai Composite and Shenzhen Component indices falling 1.73% and 2.83%, respectively[4].
Upcoming Events and Economic Indicators
Investors are looking forward to the release of the wholesale inflation data represented by the Producer Price Index (PPI). Experts predict that core PPI will rise 0.3% in October, compared to 0.2% in September[4].
Additionally, Fed Chair Jerome Powell is set to deliver a speech in Dallas later today, which could provide further insights into the Fed's monetary policy stance.
On the earnings front, several key companies, including Walt Disney ($DIS), JD.com ($JD), Applied Materials ($AMAT), AST SpaceMobile ($ASTS), and NetEase ($NTES), will release their quarterly numbers today[4].
Conclusion
The stock market on November 14, 2024, reflected a complex interplay of economic data, earnings reports, and global market sentiments. While the post-election rally showed signs of fatigue, strong earnings reports and favorable inflation data kept the markets from a significant downturn.
As we move forward, investors will be closely watching the upcoming PPI data, Fed Chair Powell's speech, and the earnings reports from major companies. These factors will continue to shape market sentiment and guide investment decisions in the days to come.
In this dynamic environment, staying informed and adapting to changing market conditions remains crucial for navigating the complexities of the stock market.
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