Closing Recap

Wednesday, December 10, 2025

U.S. stocks did nothing all morning long, with the S&P 500 little changed for hours awaiting this afternoons FOMC policy meeting in hopes for an interest rate cut and guidance of potentially more easing in early 2026 to keep animal spirits alive…and the Fed pretty much delivered what markets had expected. The Fed cut rates by 25-bps and forecasts indicate at least one more cut in 2026. The Fed cut rates for the third time in as many meetings taking the new range to 3.5%-3.75% in a mixed vote. The US dollar slid initially after the Fed commentary, Treasury yields eased off highs and gold futures bounced after settling lower on the day prior to the headlines. Financials, Materials, Industrials, Consumer Discretionary, and Healthcare all saw solid gains of more than 1.5% this afternoon rallying further post Fed Chair Powell Q&A while the S&P tech sector (XLK) reversed earlier losses, posting its 13th straight day of gains, heading into big earnings tonight from ORCL, ADBE, and SNPS. Stocks pushed higher following the Fed Chairman Powell press conference where he noted the balance of risks has shifted” toward the labor market since the Federal Open Market Committee last met in October. The latest cut should stabilize the labor market, he said, consistent with framing previous cuts as an insurance cut to protect the labor market. “I don’t think a rate hike is anyone’s base case,” Powell said. “Some people feel we should stop here, and some think we should cut one or more times next year.” His comments did nothing to sway the recent market bullishness as stocks rose, VIX fell, and the S&P remained not far from record highs. The Fed surprised markets by revealing it will begin purchasing short-term Treasury bills this Friday, earlier than had anticipated. Instead of waiting until January, the central bank will immediately start buying about $40 billion in T-bills per month to ease recent strains in short-term funding markets – that helped boosted market sentiment too. Smallcaps a record high, Dow Transports surge 2.65% to 17,500 as all was good on Wall Street today.

• Fed projections imply 25 bps of rate cuts in 2026 and another 25 bps in 2027. Seven Fed officials penciled in no rate cuts for 2026, Four officials see at least three-quarter-point cuts for 2026. Fed policymakers see 4.4% unemployment rate at end of 2026 versus 4.4% in September projections Fed policymakers see end-2026 PCE inflation at 2.4% versus 2.6% in September: core seen at 2.5% versus 2.6%. Fed policymakers see 2.3% GDP growth in 2026 versus 1.8% in September, see longer-run growth at 1.8% vs 1.8% in September.
• The Federal Reserve on Wednesday said that it would start buying short-dated government bonds to help manage market liquidity levels to ensure the Central bank retains firm control over its interest rate target system. The technically oriented purchases will commence on December 12, the Central bank said as part of the policy announcement Associated with its latest Federal Open Market Committee meeting. When it begins buying, the initial round will total around $40B in Treasury bills. The Fed said the first round of bill buying will be "elevated for a few months" and after that buying will be "significantly reduced."

• Online Retail: online pet retailer CHWY posted a top and bottom line beat for Q3, but shares slumped on guidance as sees FY25 net sales in the range of $12.58B-$12.6B, below analysts’ estimate of $12.65B and forecast Q4 sales between $3.24B-$3.26B, also below estimates of $3.27B. JMIA shares rose as releases preliminary KPIs for the two months ended November 30, 2025, showing physical goods orders increased by 30% y/y in that stretch, physical goods GMV increased by 35% y/y.
• In Outdoor & Sports Goods: AOUT posted mixed Q2 results as sales fell -5% y/y to $57.20M vs. $60.23M last year but above est. $56.1M; Q2 Adjusted EBITDA for fiscal Q2 declined y/y; sees FY26 net sales down 13%-14% from last year’s $222M and anticipates Q3 net sales to decline approximately 8% y/y.
• In Food & Beverages: PEP was upgraded to overweight from neutral at JP Morgan as they believe an accelerated agenda of innovation and marketing spending fueled by strong productivity savings should position PEP to drive HSD total shareholder return in 2026, which benchmarks well against high-quality peers.
• In Restaurants: CBRL shares declined after Q1 comp store sales and adj. EBITDA missed while lowered FY26 guidance/Q1 comp sales fell (-4.7%) vs. est. (-4%) and comparable store retail sales decreased (-8.5%) vs. est. (-6.5%) decline; cuts FY revs view to $3.2B-$3.3B from prior $3.35B-$3.45; traffic also fell; PLAY Q3 EBITDA of $59M was about $1M above consensus, but quality was lower as stock-based compensation contributed about $6M and 4% comp decline fell short of consensus of 3.3% decline, slowing 100bps sequentially despite easier compares.
• Convenience Stores: CASY reported a strong F2Q, with EPS ahead of the Street and encouraging underlying growth and market share trends though inside comps were slightly below the Street; raised FY26 EBITDA guidance to 15-17% (vs. 10-12% previously and consensus of 14.2%).
• In Delivery: CART, DASH shares weaker after AMZN notes delivery now spans 2,300+ cities and towns; expands same-day perishable grocery delivery; rideshares LYFT, UBER names tumble as Waymo robotaxis did 14 million trips in 2025.That’s triple the number of fares it did in 2024, the company said today. Assuming that the average Waymo ride costs $20.43, that could mean in excess of $286 million in revenue for the company. Waymo also says it’s now on track to do 20 million trips by the end of 2026.

• In Homebuilders: RBC Capital said remain cautious on the big Builders (KBH, LEN, TOL, PHM, MTH) as pricing trends weakened further in November (similar to September/October) with elevated spec declines suggesting Builders continue to make stronger efforts to reduce inventory. Spec inventory declined again likely owing to the heavier discounting and a more aggressive pullback in starts, with specs/comm now only up slightly Y/y. LEN trends worsened more on base pricing, with spec declines in-line with peers.

• In Power: GEV shares surge helping data center plays after increases share repurchase authorization to $10B, from $6B; raises FY25 free cash flow $3.5B-$4.0B, up from $3.0B-$3.5B prior view; doubles dividend to $0.50 from $0.25; now anticipates $52B of revenue and 20% adjusted EBITDA margin by 2028, up from $45B of revenue and 14% adjusted EBITDA margin(weighed on BE shares). SMR tgt cut to $18.50 from $37.50 at Citigroup and keeps a Sell rating as attributes the stock’s 52% decline in the past quarter to FLR’s plans to monetize its stake and uncertainty around NuScale’s first firm contract.

• In Insurance: WTW has agreed to buy specialized broker Newfront in a deal valued at about $1.3 billion in cash and equity. WTW said it will pay $1.05 billion in cash and equity upfront, with contingent consideration of up to $250 million payable primarily in equity, subject to reaching certain performance targets. AIG shares jumped late in the day following a report CB has made an informal takeover approach toward for the company, according to Insurance Insider. https://tinyurl.com/mwcnsz4y

• LAZ preliminary assets under management as of November 30, 2025, totaled approximately $250.8 billion. The month’s AUM included net outflows of $18.0 billion, market appreciation of $1.1 billion, and FX depreciation of $0.1 billion.
• TROW announced preliminary November month-end assets under management of $1.79 trillion. Preliminary net outflows for November 2025 were $8.0 billion.
• VRTS reported preliminary assets under management (AUM) of $164.2B and other fee earning assets of $1.8B for total client assets of $166.0B as of November 30, 2025.

• Several biotech/drug makers priced recent offerings after rally in shares/raising cash: DNLI 9.143M share Spot Secondary priced at $17.50; DYNE 18.98M share Secondary priced at $18.44; FULC 11.85M share Secondary priced at $13.50; GPCR 8.5M share Spot Secondary priced at $65.00; KYMR 7M share Secondary priced at $86.00; TERN 16.25M share Secondary priced at $40.00; VERA 6.14M share Secondary priced at $42.50 and WVE 15.8M share Spot Secondary priced at $19.00.

• In Medical Services: LAKE shares tumbled following Q3 EPS loss (-$1.64) on revs $47.59M saying margin pressure has driven a decline in adjusted EBITDA as freight, mix and tariffs weighed on results; the company missed FQ3 expectations substantially; withdrew guidance; suspended the dividend; terminated its CFO; and noted significant end-market uncertainties ahead.
• In Medical Equipment: Wolfe Research with two ratings changes as they upgraded BRKR to Outperform based on its 2026 outlook for 1) at least LSD revenue growth, 2) 200+bps of OP. margin expansion which combine for 3)low- to mid-teens EPS growth. The firm also upgraded WAT to Outperform with $480 tgt saying shares are positioned to outperform via the combination of (a) above-avg. core growth, (b) upside to pro forma financial targets, (c) a very attractive FCF profile, and (d) a top-notch management team.

• In Multi Industry: Jefferies with 2026 playbook and several ratings changes seeing a power, margin and cyclical recover; upgraded shares of PNR, JBTM, and MIDD to Buy, while downgrading EMR, RRX, and VLTO to Hold and said their top pick entering ’26 is PNR. Their 2026 sector positioning is anchored on three themes: (1) exposure to power and data centers; (2) margin expansion through internal productivity and 80/20 initiatives; (3) a cyclical recovery after two years of subdued volumes.

• BDRBF Bombardier downgraded to Peer Perform from Outperform at Wolfe Research following the 130% run-up YTD despite modestly lower estimates over that same period. The implied multiple expansion makes the upside case at current levels less compelling despite still solid operations.
• Airbus (EADSY) CEO says Boeing likely to win order race this year; CEO says Boeing (BA) orders buoyed by US tariff settlements; Airbus expected to remain the world’s biggest jet manufacturer as a result of deliveries; Airbus CEO completes software recall for A320 Family jets – Reuters.
• PLTR won a $448 million contract with the U.S. Navy to manage the supply chain of its nuclear submarine fleet. Palantir’s project with the Navy, called Ship OS, is aimed at better managing the supply chain by replacing workers needed to manually track parts and predicting when components are needed
• PSN was upgraded to Buy from Hold at TD Cowen calling it an attractive entry point with the stock down 23% (~$2B of mkt cap lost) since the FAA contract was awarded on 12/4. TDCowen views this as excessive given the sub 10% EBITDA "revision", & the stock now trades at only 16x C26E EV/EBITDA.
• SATS shares added to yesterday’s advance after Bloomberg reported that Elon Musk’s space technology company SpaceX might be headed for a 2026 initial public offering. EchoStar stock tracks SpaceX’s valuation because, in September, EchoStar announced a deal to sell its AWS-4 and H-block spectrum licenses to SpaceX.
• In A&D 2026 outlook, Deutsche Bank said they are: 1) bullish Commercial OE where they like HWM and CRSand continue to prefer suppliers over airframe OEMs themselves; also positive on the Commercial AM space with top ideas being GE, WWD, VSEC. Our top ideas are all levered to engine aftermarket, as we see greater upward revision potential in this submarket as well as superior long-term growth. Lastly, enter the next year with mixed views on Defense, with a positive outlook for sales growth and revisions, but neutral on the opportunity for multiple expansion. Their top ideas in this segment are RTX and CW.

• In Steel Producers: Jefferies upgraded CMC to Buy from Hold (tgt to $78 from $70), following the stock’s recent underperformance and citing the continued resilience in rebar pricing. For the group, notes that U.S. steel prices have risen in recent weeks as imports continue to decline and inventory levels fall, arguing that risk to consensus forecasts is to the upside as raise NUE tgt to $190 from $170 and STLD to $190 from $180.

• For Software: all eyes on ORCL earnings tonight after their more than 45% tumble from record highs just last quarter (has since pared those losses), while ADBE also expected to report results. In earnings last night, BRZE shares advanced after beat and raise quarter as organic rev growth accelerates for 2nd quarter in a row while subscription revenue of $182M, up 24%, an acceleration from 23% last quarter; cRPO of $573M, up 25% Y/y (consensus $564M); and billings of $205M, up 19% Y/y, vs. est 17% rise; guidance was also better. Organic revenue growth accelerated to 22% Y/Y, with the updated FY26 guide implying 21% Y/Y growth. MSFT shares weak following 3^rd party research as Cleveland Research said inline QTD with PC upside offset by disappointing M365 Co-pilot sales and only in line Azure; also, M-Science said Azure slightly muted on lower growth.
• Data Centers/AI/Power: Jefferies previews 2026 saying data center and power markets remain the fastest growing verticals within industrials. VRT is top pick for the data center capacity boom, with potential to reach $20B in sales by 2029. TEL expects AI/cloud revenue to double to over $3bn in two years with energy growing double digits as aging infrastructure is replaced. FLS should continue to benefit from growth in power, with b/b at 2.0x YTD and bookings up 23% Y/Y in 3Q25, supported by a strong nuclear offering as the company installed in 75% of global reactors. Margin expansion is expected from op. leverage, 80/20, and footprint optimization. We maintain APH at Hold on valuation but do see it as a key beneficiary of the AI boom.
• In Optical/Networking and Comm Equipment: group continues to be massive outperformer with CIEN at 52-week highs into earnings tomorrow morning and shares of both COHR, LITE on winning streaks of more than 5-days coming into the day at all-time highs.

• ByteDance and BABA have asked NVDA about buying its powerful H200 AI chip after U.S. President Donald Trump said he would allow it to be exported to China, four people briefed on the matter told Reuters. The Chinese companies are willing to place large orders for Nvidia’s second most powerful artificial intelligence chip.
• PLAB shares surged on results after reported Q4 EPS $1.07 above prior year $0.54 result on better revs of $215.8M vs. est. $205.2M.
• TSM November sales +24.5% y/y and (6.5%) m/m on a reported basis. This compares to 5-year y/y and m/m November seasonality of +22.2% and (1.3%) respectively.