My top 10 things to watch Tuesday, Nov. 10
1. Futures are down after a hotter-than-expected consumer price index this morning stoked inflation concerns. It pushed market odds on a quarter-point Federal Reserve interest rate hike up to 86% and introduced a 14% chance of a half-point move. A lower close in stocks would mark a sharp break from back-to-back gains after Thursday's post-election market rout. Not helping today, bond yields rose on the CPI release.
2. Oil prices are back below $90 per barrel after President Donald Trump downplayed the possibility of an escalation in the Iran war. Meanwhile, Defense Secretary Pete Hegseth railed against the Republican congressman who introduced articles of impeachment against him. Hegseth defended leadership in the Iran conflict and other military operations.
3. Anthropic is one step closer to going public. The AI lab said it will offer 825 million shares in its upcoming IPO, expected this month, at a price between $70 and $78 per share. That would value the company at $1.405 trillion on a fully diluted basis at the top end of the range. It must be over $1 trillion or regarded as a failure. It will trade under the ticker ANT on the Nasdaq. But the deal is overshadowed by the spy scandal involving Nvidia founder and CEO Jensen Huang, the most important executive of our time. And the most popular.
4. Nvidia stock is down 1.5% this morning as Trump said last night that the FBI is investigating CEO Jensen Huang's affair with a suspected Chinese spy. I said on Mad Money last night we might prepare for a Huang-less Nvidia. If that happens, we can no longer be bound by my "own it, don't trade it" mantra on the Club stock. The board is also probing but, so far, said it has "confidence in Jensen and his leadership team."
5. Wells Fargo acknowledged the "key man" risk that the Huang ordeal poses to Nvidia, given the CEO's importance to the company. But the analysts said they are comfortable with the risk-reward. While cutting their price target to $300 from $315 on valuation, they do expect Nvidia to deliver strong earnings next week. Citi also cut its Nvidia price target, going down to $285 from $315. Both Citi and Wells, however, kept their buy ratings.
6. The first of the major Huang-backed companies since the scandal erupted reports earnings tonight. That's CoreWeave, which has its own troubles. Even before the Democratic wave in last week's midterms, sellers were already out in force on worries about how much the neocloud has borrowed to fuel its growth. CoreWeave must show a plan toward profitability to have any prayer of arresting the more than 50% drop in its stock since mid-August.
7. Bernstein raised its price target on Club holding Home Depot to $270 from $254, and on Lowe's to $357 from $344. This makes no sense if there is another Fed rate hike (or more). Fed Governor Christopher Waller said Tuesday he would support a quarter-point rate increase and may push for a half-point move. We wrote last week about what needs to happen for Home Depot to keep its monthlong rally going.
8. UBS lowered its price target on off-price retailer TJX to $184 from $198. Kept a buy rating. Analysts expect the Club name to report generally in-line earnings next week. Cantor Fitzgerald initiated coverage of TJX with a hold and a $139 price target, which roughly matches yesterday's close. Last quarter was shockingly bad at TJX's biggest unit. Management needs to show us that they have fixed the problems.
9. Visa and Mastercard are back as the only two credit card companies with stocks really performing. Surprisingly, Club stock Capital One has not done much as it integrates Discover. There is headline risk for all of them as Sen. Elizabeth Warren plans to introduce a bill capping credit card rates when Democrats take control of Capitol Hill in the new year. We're on hold on Capital One to see how this plays out.
10. Alternative asset management KKR is getting a bunch of analyst price target raises, with analysts generally encouraged by yesterday's solid earnings. Oppenheimer cut its price target to $156 from $163, but that level is still among the highest on the Street. Not long ago these companies were thought to be the Achilles' heel of this market.
