My top 10 things to watch Thursday, Nov. 5
1. Dow futures are up, and Nasdaq futures are down after a strong midterm-driven rally. The tech-heavy Nasdaq soared nearly 1.5% on Wednesday, but many key tech stocks were down as investors worried about what the Democratic sweep meant for the data center buildout. The Dow jumped 3%. Economically sensitive stocks got a boost on the thought that Democrats controlling the House and Senate would bring stability. The Club's annual meeting is tomorrow. The livestream for members starts at 10:30 a.m. ET.
2. Big post-earnings declines in Qualcomm and Arm . Looks like we got a lot of questions about smartphones due to storage issues. Qualcomm stock is down 10% on a weak forecast. Fewer data centers? Arm does have solid demand from hyperscalers, particularly Muse, a portfolio holding of Meta Platforms . But does it need more? Arm shares are down 7%.
3. A dose of realism for the data centers in space? Is it 10 times more expensive? 20 times? Is Elon Musk going to be held accountable now that we have a real reason to believe that he was hurt by the midterms? Or is that fanciful? SpaceX fell 4% yesterday and is down another 2.5% today.
4. Snap shares are down 11% after the Snapchat parent reported daily users down year over year. That means Snap won't get the ad acceleration it needs. Starting next year, Snap is changing its primary audience reporting metric to global monthly active users. Adjusting the goalposts is always a bad sign.
5. Little-noticed change at the top at HP in yesterday's post-election rally. The PC maker named former GSK chief and Microsoft board member Emma Walmsley as CEO. She is being charged with guiding HP through the challenges of the memory shortage. Is the move a recognition of demand destruction in PCs? I see Club name Apple as a beneficiary.
6. Cardinal Health beat on the top and bottom lines. The drug distributor also lifted its full-year profit outlook after just one quarter into its new fiscal year. The Club stock does not get much attention. But it's an excellent long-term performer, up 27.5% so far this year. Closed yesterday at another record high. It's a defensive, non-AI stock name. Rival McKesson also delivered better-than-expected numbers last night.
7. Kimberly-Clark reported third-quarter sales and earnings in line with its preannounced numbers from last month. Like Cardinal, this is another defensive-oriented name we own for the Club. The Huggies and Kleenex company just closed its acquisition of Kenvue, the Tylenol and Band-Aid maker, this week. The Club stock is up this morning after a 4% gain yesterday.
8. Did the market appoint a new darling of rates and no more tariffs? Citi raised its Stanley Black & Decker price target to $140 from $107. The stock is higher again today, following a 13% gain yesterday in the broader election rally. Club name Home Depot is up 1% after yesterday's 6.5% jump. Rates and tariffs are also big here. Home Depot is up 25% in a month .
9. It seems that Dutch Bros is totally tone deaf to its own cuts and may not recognize its over-expansion. We have seen this before, and the marketplace is saying slow the build. Shares of the drive-thru coffee company are down more than 11% after light comps, slowing traffic, and a trimmed full-year outlook. For the Club, we own Starbucks , which has been on a roll as the turnaround takes hold.
10. The comeback begins. Lots of price target hikes for McDonald's after yesterday's 6.5% post-earnings gain. The stock is up modestly again this morning. The brand overhaul at McDonald's is beginning to pay off. U.S. sales trends are improving as the fast food giant renews its focus on value. Still some work to be done here. But things are looking up.
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