Closing Recap

Tuesday, November 25, 2025

US equity markets gave back some of yesterday’s gains overnight, but the decline was modest and quickly erased. Yesterday enjoyed a return to December rate cut, expectations moving higher and a bounce in big tech but thinning volume as we approach the Thanksgiving holiday could make for rising volatility so the morning PPI and tonight’s earnings would be in focus. Stocks briefly went green following slightly cooler mo/mo and yr/yr Core PPI data, then held close to flat and even crossed back to green again before rolling. By mid-morning, stocks had settled in a bit, but large-cap indices remained notably lower, though breadth favored advancers by 3:2 as small caps outperformed with IWM (+0.90%) versus SPY (-0.15%) and QQQ (-0.74%). The large-cap/small-cap divergence was equally evident in the sector performance, Health Care (+1.47%), Communications (+1.30%) and Materials (+1.05%) outperformed among S&P sector ETFs, while Utilities (-0.47%), Energy (-1.01%) and Technology (-1.47%) paced the underperformers with eight sectors gaining versus only three declining. Mega-cap concentration cuts both ways and is sure to continue to yo-yo this market. In sentiment today, the Fear and Greed Index rests at 13/100 (Extreme Fear) versus 11 (Extreme Fear) last week and 33 (Fear) last month.

In data of note today, on volatility, @PeterMallouk reminds us we see a 5% drawdown nearly every year, a 10% drawdown every other year and a 20% draw-down about every four years while also noting the S&P 500 has returned an average of 11%/yr since 1950 despite the drawdowns. On a similar topic, per @bespokeinvest, the Nasdaq 100 posted its first higher-high since the recent retrenchment began at the end of October. On the Fed, today’s private payrolls data showed an average weekly decline of 13,500 for the four weeks ending November 8th and supports a December rate cut implied probability of 76% with an implied 3.686% rate at the end of this year and 2.976% and year-end 2026. Lastly, though we may not be quite done with earnings, with 478 of the S&P 500 names in the books, 85% have beaten on EPS with an average beat of 19% and average yr/yr earnings growth of 17%. Median yr/yr earnings growth stands at 10%.

After enjoying a nice midday bounce, stocks extended gains ending near their best levels of the day. Breadth expanded to about 3:1 with small caps still leading in a generally green day. Nine S&P Sector ETF’s held in positive territory, with only Energy and Utilities lower. On the earnings front, tonight we hear from WDAY, ZS, NTAP, DELL and HPQ, among others, and tomorrow morning brings DE and LI as the calendar continues to lighten into the holiday. By day’s end, major averages were broadly higher as the S&P 500, Nasdaq, Dow and Russell 200 all recovered their 50 day moving averages (after rebounding above their 100-dma the day prior).

• Retail sales for September rose +0.2%, below consensus +0.4% and vs August +0.6%; Sept Retail Sales Ex-autos +0.3%, in-line with consensus and vs August +0.6%; Sept gasoline sales +2.0% vs Aug +0.4%, Sept cars/parts sales -0.3% vs Aug +0.6% and Sept Retail Sales Ex-autos/gasoline +0.1% vs Aug +0.6%.
• Inflation data mostly in-line to below estimates for September Headline Producer Prices (PPI) M/M rose +0.3%, in-line with expectations and y/y rose +2.7% vs. est. +2.6%. On a core basis (excludes food & energy) rises +0.1% vs. est. +0.2% and on a y/y basis rises +2.6% vs. est. +2.7%.
• US September 20-metro area home prices +1.4% (consensus +1.4%) from year ago vs +1.6% in August (previous +1.6%) — S&P Case-Shiller. US September home prices in 20 metro areas +0.1% seasonally adj (consensus +0.1%) vs revised +0.1% in August (previous +0.2%).
• Richmond Fed composite manufacturing index -15 in Nov vs -4 in October and Richmond Fed manufacturing shipments index -14 in Nov vs +4 in October.
• Dallas Fed Texas service sector revenue index -2.5 in November vs -6.4 in October and Dallas Fed Texas service sector index of General business activity outlook -2.3 in November vs -9.4 in October.
• U.S. Aug inventory/sales ratio 1.37 months’ worth vs July 1.37 months; U.S. Aug business sales +0.2% vs July +1.0% (prev +1.0%) and Aug retail inventories ex-autos revised to unchanged (prev +0.3%).
• Consumer Confidence index 88.7 (consensus 93.4) vs Oct revised 95.5 (previous 94.6).
• The U.S. government posted a higher $284 billion deficit for October in a report delayed and impacted by the recent federal government shutdown and reflecting record tariff revenues offset by a shift of some November benefit payments into last month’s data, the Treasury Department said. Receipts for October totaled $404 billion, a record for the month and a 24% increase from the $327 billion collected in October 2024.

• January WTI crude futures slipped overnight, then slumped further following the morning economic data and more optimistic headlines on a Russia/Ukraine peace deal. While shipments from Russia may remain under sanctions, multiple forecasts continue to see a crude glut in 2026, keeping prices under pressure. January futures settled at $57.95/bbl, down 89 cents, 1.51%.
• Treasury yields were modestly lower, with the 10-year down 3bps to 4% while the dollar weakened as recent economic data backs Fed rate cut view for December, including today’s delayed PPI reading.

• In Chinese EV’s: NIO Q3 2025 total revenues rise 16.7% y/y, driven by 40.8% increase in deliveries to 87,071 and posted improved gross margin of 13.9% in Q3 2025, up from 10.7% last year; Q3 adj loss fell -38% y/y; said now expects Q4 deliveries of vehicles between 120,000-125,000 units and guides Q4 total revenues to be between RMB32,758 mln and RMB34,039 mln.
• In European Auto Parts: Jefferies downgraded Pirelli (PRLLY) to Hold, Michelin (MGDDY) is top pick and upgrade Conti (CTTAY) moves back to Buy in European Auto Parts sector saying they see the most upside at Michelin with the potential for a significant earnings recovery & trading at a 7% Disc to PIRC.

• Department Stores: KSS shares jumped on better results and raised outlook as Q3 sales 43.4B topped $3.32B estimate on better adj EPS $0.20 vs. est. loss (-$0.20) while raised its 2025 adjusted EPS FY view to be between $1.25-$1.45, compared with the prior range of $0.50-$0.80; boosts year sales and comps.
• Sporting Goods Retail: DKS posted earnings and said they are optimizing inventory and closing underperforming stores to address unproductive assets; said expects Q4 2025 operating profit for Foot Locker to be slightly negative; said for Q3 (ex: Foot Locker), saw comparable sales rise 5.7%, well ahead of the 3.6% growth analysts had expected and is raising FY EPS/revs and comp sales which are now seen rising between 3.5%-4%, up from its prior range of 2%-3.5%.
• Specialty Retailers: watch retailer MOV Q3 net sales slightly beat analyst expectations, growing 3.1% yr/yr, while adjusted EPS for fiscal Q3 misses analyst expectations and said it is not providing fiscal 2026 guidance due to economic uncertainty and tariff impacts. In home and garden CENT reported better-than-expected Q4 results, with total sales ~3% above consensus, led by the Garden segment ~11% above, while the Pet segment was broadly in line.
• Off Price Retail: BURL shares tumbled on mixed results as EPS of $1.80 for Q3 beat the $1.64 estimate while revs of $2.71B missed the $2.75B estimate and comp sales only rose 1%; raises full-year adjusted EPS guidance to $9.69-$9.89 from $9.19-$9.59 and maintains comps yearly view of 0%-2%.
• Apparel Retailers: ANF shares jumped after Q3 results topped Wall Street estimates and raised the lower end of annual profit forecast on strong demand for Hollister apparel as sees EPS $10.20-$10.50 vs prior forecast of $10.00-$10.50 and raises FY net sales to +6% to +7%, above prior 5%-7%. OXM was upgraded to Neutral from Sell at Citigroup ahead of earnings as risk reward more balanced
• Beauty and Consumer: EL was downgraded to Sell from Neutral at Redburn (tgt to $70 from $83) saying the company is early in its transformation and the shares have rally on the hopes of a strong turnaround. The firm upgraded L’Oreal (LRLCY) to Buy from Neutral saying it is the only company to have mastered the complexity of Beauty globally. Also initiated both PUGBY and COTY at Neutral.
• In Restaurants: EAT was upgraded to Buy at Citigroup saying they are admittedly late to a more constructive stance but stills see legs to the story predicated on a more favorable cost backdrop, sales remaining strong through peak laps, and sales drivers in place to carry momentum. SHAK reiterated Q4 and fiscal year 2025 guidance and reiterating three-year financial targets after CFO transition.

• In Leisure/Theaters: IMAX was upgraded to Neutral from Sell at Goldman Sachs and increase its price target to $34 from $22, reflecting higher target multiples and the Incorporation of an M&A valuation methodology to reflect the growing strategic value of IMAX within the Media industry.
• In Casino & Online Betting: DKNG, FLUT shares saw an afternoon spike after Bloomberg reported Kalshi is subject to Nevada Gaming regulation, a judge rules.

• In Industrials: heavy duty truck maker CMI receives its second Wall Street upgrade in as many days as UBS raised to Neutral and raised tgt to $500 from $350 saying the truck cycle is bottoming in 2026 and the stock’s risk/reward is now more balanced (Truist upgraded shares yesterday). In Robotics, SYM shares rallied as reported FQ4 results that beat expectations on stronger revenue and margins and introduced its FQ126 outlook that included above-consensus revenue, with EBITDA margins in line with estimates. VLTO entered into a definitive agreement to acquire In-Situ for $435M, subject to customary adjustments. BLBD Q3 Revenues and EBITDA beat consensus, and Q1 outlook was ahead of expectations.
• In Transports: ZIM shares bounced after the company said it has received interest from multiple parties, including strategic interest, which it is evaluating carefully. ZIM board recently added two new members, Yair Avidan and Dr. Yoram Turbowicz, to help the company better assess value-maximizing options.

• In Crypto/Blockchain: COIN was downgraded to Hold from Buy at Argus with no price target noting the stock is trading at 39-times expected forward earnings, which is well above the 24- to 27-times multiples of the other exchanges. EXOD announced it had agreed to acquire W3C Corp. (Private), including its two major subsidiaries, Baanx and Monavate, for $175M in cash.
• In REITs: Barclays upgraded AVB to Overweight from Equal Weight (PT to $216 from $229) as believes the positives now outweigh the negatives at the stock’s current valuation, while downgraded CPT to Equal Weight saying its prospective total return profile now sits closer to the middle of the pack when measured against the rest of Apartment real estate investment Trust sector.
• In Mortgage Industry: RKT said nearly 85,000 U.S. sellers took their homes off the market in September, up 28% from a year earlier and the highest level for that month in eight years, according to a new report from Redfin. Delistings are increasing faster than overall listings are increasing. Nationwide, 5.5% of all home listings were taken off the market in September. That’s the highest September share since at least 2016, and it’s up from 4.8% a year earlier

• NVS won FDA approval for a new gene therapy, called Itvisma, to treat children older than 2, teens and adults with spinal muscular atrophy.
• RYTM was initiated with a Buy/High Risk rating, $136 tgt at Citigroup saying the company’s flagship product, Imcivree (setmelanotide), is approved globally for patients with Bardet-Biedl syndrome (BBS) and commercial performance to date has been steady. Citi sees a high probability of approval (90%) and anticipates a strong commercial launch given robust weight loss observed in Ph3.

• Healthcare Facilities: SEM said they received a non-binding indication of interest from Robert A. Ortenzio, Executive Chairman, Co-Founder and Director of Select Medical, to acquire all of the outstanding shares of Select Medical for cash consideration of $16.00 to $16.20 per share of our common stock.

• In Internet/Online: BABA shares rose after reported better than expected Q2 revenue (+5% y/y to 247.8 billion Chinese yuan ($34.8B) topped est. 242.65 billion yuan), as sales in its key cloud computing division accelerated; reported a 34% y/y rise in cloud computing revenue to 39.8B yuan versus expectations of 37.9B yuan

• In AI/Data Centers: a positive reaction to GOOGL’s Gemini 3 AI model has raised concerns about competition for OpenAI, sending shares of investor SoftBank lower in Asia. The AI trade has seen a changing of the guard the last few days with the strong Gemini 3 showing from GOOGL, because if Google wins and OpenAI loses, a lot of spending goes away from name like NVDA, AMD, CRWV, MSFT and ORCL which seems to be the bet investors on Wall Street have been making the last few trading days.
• In Hardware & Equipment: KEYS reported better than expected fiscal Q4 results with better organic growth and acquisitions driving upside to fiscal 2026 estimates/core orders grow +12% y/y in 4QF25 (October), above expectation for +8% y/y core growth and orders were $116mn above consensus; COHR shares slipped after Bloomberg reported Bain Capital noted to seek $1.14B in Coherent block trade

• AVGO shares rose as the actual vendor on the Google TPU chips is Broadcom and Hock Tan, CEO of Broadcom, is on the board of Meta.
• SNDK will replace IPG in the S&P 500 index, effective before the start of trading on Nov. 28.
• ADI posted a top and bottom line Q4 beat as Q4 revenue grows 26% y/y led by strength in Communications and Industrial sectors and guided Q1 revenue $3.1B, +/- $100M, above consensus $2.98B.
• AMAT was upgraded to Buy at UBS and raised price tgt to $285 from $250 reflecting a significantly more bullish outlook for wafer fab Equipment (WFE) in C2026/2027E.
• SMTC Q3 and revenue guidance was offset by mix related gross margin pressure that resulted in its EPS outlook being one penny shy of ests.