Monday Morning Edge Report - November 27, 2023

Black Friday Online Sales Jump 7.5%

Author

Mark Roussin
November 27, 2023

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Market Talk ⏪

The Monday Morning Edge Report is designed to help investors of all different levels breakdown important stories/topics within the stock market. In this weekly report we will help you understand what is going on to help give you, the investor, an edge in the market.

I hope you all had a nice Thanksgiving as we had a short week in the stock market last week with expected low volume across the week.

5 Stories Moving The Market:

  1. Sam Altman Back as Open AI CEO ⏩ New board and the CEO is back

  2. Black Friday Sales better than expected ⏩ US consumer continues to spend

  3. Another Cryptocurrency Platform CEO in Trouble ⏩ Binance CEO pleads guilty

  4. Nvidia with ANOTHER Blowout Quarter ⏩ Growth remains robust

  5. Oil prices down sharply ⏩ OPEC concerned over international demand

It was a whirlwind three days for OpenAI and Sam Altman as the Friday before last he was ousted as CEO of OpenAI. Late Sunday night (last Sunday) it was reported that Microsoft would make Mr. Altman head of AI as a MSFT employee, but come this past Monday, OpenAI brought back its former leader, reinstating him as CEO and forming a new, larger board filled with experienced individuals. All but one board member was replaced. MSFT shares traded slightly higher on the news.

Black Friday online sales jumped 7.5% this season as consumers continue to spend, even if means putting it on their credit card. In recent months, we have seen US credit card debt surpass $1 Trillion. Black Friday shoppers spent a record $9.8 billion in online shopping during the popular holiday shopping period. According to the Adobe survey, $79 million of the sales came from consumers who opted for the ‘Buy Now, Pay Later’ flexible payment method to stretch their wallets, up 47% from last year.

After dealing with the FTX drama and Sam Bankman-Fried, crypto enthusiasts were hit yet again with another scandal, this time involving Binance and its CEO Changpeng Zhao. Founder and CEO Changpeng Zhao and others were charged with violating the Bank Secrecy Act by failing to implement an effective anti-money-laundering program and for willfully violating U.S. economic sanctions.

On the news, crypto investors quickly ran to get their money off the platform, as outflows of more than $1 billion came through within 24 hours. The company agreed to pay $4.3 billion in penalties. Binance is in a much better position than FTX, and the company is plenty liquid at the moment, but the CEO has stepped down from his role due to the charges.

Nvidia reported Q3 earnings last week that blew out analyst expectations, yet again. The company reported revenues of $18.1 billion and EPS of $4.02 per share. Analysts were looking for revenues of $16.18 billion on EPS of $3.37 per share.

There were some concerns regarding the chip export restrictions that have been enacted by the US, to which the company responded by saying “sales to these destinations will decline significantly in Q4.”

Nvidia’s revenue during the quarter tripled year over year lead by their data center segment that saw revenue generated of $14.51 billion, a 279% increase year over year. Management is looking for $20 billion in revenue for Q4.

5. Oil prices down sharply

OPEC was expected to have a meeting last week to discuss potential production cuts, but the meeting was delayed unexpectedly sending oil prices falling. The reason for potential supply cuts is due in large part to the lack of demand expected in both China as well as Europe. The meeting is now scheduled for Thursday.

Goldman Sachs believes OPEC will do what it can to keep the price of oil between $80 to $100. The price of oil can have a huge impact on many different companies from the likes of Airlines and Trucking companies, to the likes of Amazon and their delivery costs. Investors will be watching closesly this week.

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Earnings on Deck 💰

Earnings season is back after a short week, as we will hear from some key cloud and cyber companies this week.

Here are the companies reporting earnings this week:

Analyst Upgrades/Downgrades 📝

In this section we will highlight any recent notable analyst upgrades or downgrades.

  • Deutsche Bank upgrades Boeing to buy from hold

  • HSBC initiates Caterpillar as hold

  • BMO names Sherwin-Williams a top pick

  • Wedbush downgrades KB Home to neutral from outperform

Poll of the Week 📊

Economic Data This Week 📆

Monday

  • New Home Sales

Tuesday

  • S&P Case-Shiller home price index

  • Consumer confidence

Wednesday

  • Advanced US Trade Balance in goods

  • Fed Beige Book

Thursday

  • Initial Jobless Claims

  • Personal income

  • Personal spending

  • PCE Index

  • Core PCE Index

  • Pending home sales

Friday

  • ISM manufacturing

  • Construction spending

  • Auto sales

Other Resources 📺

If you have not done so yet, check out my growing YouTube community of ~39,000 like-minded investors where I publish weekly videos focused on building wealth through investing.

Here is the latest video I released: Dividend Growth: 3 Stocks With Fast Growing Dividends

Here is another video I put out last week: Top 5 Stocks The Smart Money Has Been Buying

Here are a few others of my latest videos:

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Have questions? You can email me directly at [email protected].

Happy Investing!

Mark

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