Mid-Morning Look

Friday, November 21, 2025

U.S. stocks are trading higher as the S&P 500, Dow and Russell 2000 look to rebound after yesterday’s sharp reversal lower, with only technology standing out to the downside.  Early on, nine S&P sectors are higher led by Materials and both Consumer Discretionary and Staples while Tech and Energy slide. Stocks got a boost this morning after New York Fed President John Williams, a voting member of the FOMC said the central bank can still cut interest rates “in the near term” without putting its inflation goal at risk. Following his comments, US futures turned higher and traders now see a more than 70% chance that the Fed will cut its main lending rate by 25-basis-points in December, up from a near 37% chance seen earlier in the day, according to the CME FedWatch. Ironically, it has been a batch of “hawkish” Fed comments in recent weeks that has partially led to the broad market pullback. Overall, a combination of several factors has weighed on investor sentiment including several technical levels have been broken with first the SPY, then QQQ as well as Dow and IWM first through the 50dma and then yesterday dropping below their 100-day moving averages. That coupled with a combination of reduced Fed rate cut expectations in December (prior to Williams dovish comments), high AI/tech valuation concerns, the Japanese yen carry unwind and crypto panic with Bitcoin falling over -30% from October record highs all explain the price action in recent weeks. Even NVDA beat and raise yesterday, and positive commentary failed to lift investor spirits with a massive reversal lower along with the AI trade following an initial pop as cost to fund/cost of debt/circular financing is raising questions on Wall Street. US stocks are on track for more weekly losses as a historically seasonally strong November has been anything but with just one week remaining. Following Fed Williams comments, U.S. Treasury yields fell to a three-week low as investors raised bets that the Federal Reserve will cut interest rates next month due to a weakening labor market.

• University of Michigan surveys of consumers sentiment final Nov 51.0 vs. consensus 50.5 and compared to preliminary Nov 50.3 and final Oct 53.6; current conditions index final Nov 51.1 vs prelim Nov 52.3 and final Oct 58.6; expectations index final Nov 51.0 vs prelim Nov 49.0 and final Oct 50.3.
• University of Michigan surveys of consumers 1-year inflation outlook final Nov 4.5% vs prelim 4.7% and final Oct 4.6% and University of Michigan surveys of consumers 5-year inflation outlook final Nov 3.4% vs prelim 3.6% and final Oct 3.9%.
• Aug wholesale inventories revised to unchanged (consensus -0.2%) from -0.2%, U.S. Aug wholesale sales +0.1% (consensus +0.4%), U.S. Aug wholesale sales +0.1% (consensus +0.4%) vs July +1.3% (prev +1.4%) and Aug stock/sales ratio 1.28 months’ worth vs July 1.28 months.

• In Energy Services: Goldman Sachs downgraded AESI to Sell from Neutral as Permian oil well activity slumps, pressuring demand for its Sand, and putting downward pressure on Sand prices. Uncertainties around its nascent gas-powered generator business for data Centers is also likely to linger. The firm upgraded HP to Neutral as expects improved activity in key international markets, including Saudi Arabia, Oman, and Algeria, to drive a positive rate of change in rig activation.
• Lithium miners ALB, LAC, SGML, SQM shares fell after China moves to curb speculative trading, with. Reuters noted GFEX said it would increase transaction fees for some futures contracts of lithium carbonate from November 24, and it also planned to limit the daily open position for non-futures company members.
• In Telecom & Media: TMUS was downgraded to Perform from Outperform at Oppenheimer and removed the firm’s $300 price target on the shares saying the company will have a difficult time beating subscriber and free cash flow estimates after a decade of outsized share gains and margin expansion. Reuters reported WBD has received preliminary buyout bids from rivals PSKY, NFLX and CMCSA citing a source familiar with the matter said on Thursday, kicking off a potential sale of the century-old Hollywood studio.

• DOCS +5%; was upgraded to Strong Buy at Raymond James following a significant dislocation in shares post FQ2 results, with the current risk/reward at 25x FCF looking too compelling to ignore.
• GAP +4%; reported Q3 beat with comp and GM upside contributing (with OpEx ~inline amid reinvesting in the brands) and guides FY net sales +1.7-2.0% vs est +1.58% and Op mgn about 7.2%; Q3 Gap comp sales rose 7%, Old Navy +6%, Banana Republic +4% and Athleta -11%.
• INTU +4%; started FY26 with good results, as Q1 EPS/revs both topped consensus, which were a bit better than expected in Credit Karma and in the QBO ecosystem; Q1 adj EPS $3.34 vs est $3.09 on revs $3.9B vs est $3.76B and better guide.
• ROST +6%; raised its full-year EPS forecast; reported a strong 3Q beat last night driven by broad-based gains across income cohorts, improving execution, compelling assortment, and refreshed marketing campaigns; posted +7% same-store sales growth and impressive flow-through lead to an EPS beat.

• ANAB -5%; after the company and GSK began litigation against each other, with each saying the other party breached a licensing agreement for cancer treatment Jemperli. The litigation Centers on Jemperli, a drug used to treat some forms of endometrial cancer.
• CTNM -11%; after disclosed that the ph2 VISTA trial of PIPE-307 (M1R antagonist) in RRMS did not meet either its prespecified primary or secondary endpoints, and no significant change was observed in binocular 2.5% low-contrast letter acuity across treatment arms.
• ESTC -14%; reported a Q2 beat & raise, though Cloud revenue a touch softer than expected while Stifel noted shares fell as investors were disappointed by Elastic’s skinny beat (1% vs 3% Q/Q) after the company raised Q2/FY guidance in October.
• NFE -14%; after the company warned it may seek bankruptcy Protection in the US if its efforts to negotiate an out-of-court restructuring with lenders fall short.
• ORCL -6%; dropping below the $200 level (off 9/10/25 record highs of $345.72) amid growing investor fears that the rapid rise in public debt used to bankroll AI investments could strain the U.S. corporate bond market. Note since September, public bond issuance by four of the major cloud computing and AI platform companies known as “hyperscalers” has hit nearly $90 billion, with GOOGL selling $25 billion in bonds, META $30 billion, ORCL $18 billion, and AMZN the most recent, $15 billion.
• VEEV -11%; reported a Q3 beat & raise, as revenue +16% Y/y (consensus +14%), EPS +17% Y/y (consensus +12%) and raised Q4 by 1% (revenue/EPS +LDD), though shares fell following CRM commentary as now expects 14 of top 20 Pharma to migrate to Vault CRM, down from 18 currently.