Bespoke’s Weekly Sector Snapshot — 11/21/24
Q3 2024 Earnings Conference Call Recaps: Lowe’s (LOW)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers Lowe‘s (LOW) Q3 2024 earnings call.
Lowe’s (LOW) is a home improvement retailer serving homeowners, renters, and professional contractors across the US and Canada. Offering products ranging from appliances and tools to paint and home decor, Lowe’s caters to DIY enthusiasts and small-to-medium-sized Pro customers. With over 2,000 stores, Lowe’s provides valuable insights into consumer spending trends, housing market dynamics, and broader economic shifts. In Q3, the Pro segment delivered high single-digit comps, supported by enhanced inventory and digital tools like “Shop the Job.” Online sales grew 6%, driven by a 10% traffic increase on the Lowe’s app. The MyLowe’s Rewards program gained traction, boosting repeat purchases and average order values. LOW called out its Total Home Strategy to position the itself for long-term growth, leveraging drivers like aging housing stock and millennial household formation. Despite beats on the top and bottom lines, LOW shares fell 4.6% on 11/19 due to year-over-year declines in revenue and EPS as management noted affordability challenges from high interest rates and inflation, with DIY discretionary demand still under pressure…
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Chart of the Day – MicroStrategy (MSTR)
Q3 2024 Earnings Conference Call Recaps: Walt Disney (DIS)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers Walt Disney‘s (DIS) Q4 2024 earnings call.
Walt Disney (DIS) is a global entertainment leader known for its streaming (Hulu & Disney+), box-office production (Pixar, Marvel and 20th Century Studios), cable television (ABC and Fox Networks), theme parks, cruises, sports (ESPN), and more. While there was some concern for parks after several weather events around the world, the Paris Olympics, and tough comparisons in Orlando, there were some positives in that part of the business as noted with plans for a sixth cruise ship, park expansions, strong bookings for 2025, and a gradual recovery in consumer spending. Disney+ ended the quarter at 174 million core and Hulu subscriptions, and management noted a new personalized ESPN tile launch in December. Management also discussed its strong content slate for 2025 that will follow up successful 2024 titles, including “Captain America” and “Avatar” sequels. The optimistic outlook and earnings triple play propelled shares 6.2% higher on 11/14…
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Bitcoin Approaches $100K
Bitcoin’s relentless rally has pressed on. In the past 24 hours, the world’s largest crypto has surpassed the $98,000 mark for the first time ever as it closes in on the $100,000 milestone. As shown below, after trending lower from the end of the first quarter through late summer, Bitcoin hit a low on September 6 and finally broke out of that downtrend by mid-October with a parabolic move upwards after the election. Currently, the crypto is up over 80% from that September low.
Bitcoin has seen a lot of big green candles in the past few weeks. To gauge how it has traded during the day, below we show an intraday composite of Bitcoin’s action since Election Day a little over two weeks ago. This is essentially the average 24-hour path that Bitcoin has taken since Election Day. We have shaded in gray the period from 9:30 AM ET to 4 PM ET, which represents regular trading hours for US equity markets. As you can see, Bitcoin has been surging when the US stock market has been open outside of a slight sell-off from 2-4 PM ET. Is this because of all the new Bitcoin ETF buying that has been happening lately?
The surge in Bitcoin prices has also come at a time when seasonality hasn’t exactly been at its best. In the second chart below, we show the average path of Bitcoin throughout the year for all years since 2015, over the past five years, and this year. As shown, this year in March and the second half of May, Bitcoin bucked seasonal trends as it saw much stronger runs versus a historical seasonal pattern in which prices have tended to fall. That parallels with this month in which prices have absolutely soared, whereas in the past, Bitcoin has tended to move lower in November before rebounding through the holidays. In fact, as the first days of December approach, forward one month and three month seasonality is reaching some of its strongest readings of the year. As shown in the dials below, forward one month historical median seasonal returns rank in the 85th percentile of all days of the year and forward three month returns are even better, just shy of the top decile of readings. Of course, seasonality is no guarantee of future price movements, and the recent rally already leaves Bitcoin very overbought.
Q3 2024 Earnings Conference Call Recaps: NVIDIA (NVDA)
Bespoke’s Conference Call Recaps use AI to summarize lengthy earnings calls. The commentary below is AI-generated and then edited by Bespoke for quality control. As always, none of these summaries should be construed as recommendations to buy or sell any securities, and investors should do their own research and/or consult with a financial professional before making any investment decisions.
Our latest recap available to Bespoke subscribers covers NVIDIA’s (NVDA) Q3 2025 earnings call.
NVIDIA (NVDA) produces graphical processing units (GPUs) utilized in a variety of end markets with specializations in LLMs, professional visualization, data centers, automotive, and gaming. In addition to hardware, NVDA also creates software used in machine learning, AI, cloud computing, and virtual/augmented reality. Before this quarter’s earnings results, which beat estimates but guidance was not raised, NVDA was on a streak of seven consecutive triple plays during which shares have climbed more than 500%. This quarter, NVDA delivered record revenue of $35.1 billion, up 94% YoY, fueled by a 112% increase in data center revenue to $30.8 billion. The Blackwell GPU ramp is underway as deliveries will begin next quarter, and demand is “incredible.” Generative and agentic AI adoption surged, supported by NVIDIA’s AI Enterprise platform and partnerships with giants like Microsoft, Oracle, and SoftBank. Sovereign AI efforts in India and Japan also gained momentum. Export controls slightly tempered growth in China as that headwind remains persistent. NVDA shares were down slightly on the morning of 11/21 as investors question how much longer NVDA can sustain its growth trajectory…
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Bespoke’s Morning Lineup – 11/21/24 – All That Hype and Not Much to Show For It
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“Nobody owes nobody nothing.” – Rocky Balboa
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Asian stocks traded mostly lower overnight with the Nikkei down close to 1% while Hong Kong and India saw declines of about half that pace. There were reports that the Chinese government plans to stick to its 5% growth target for 2025 even as the market had been expecting a reduction in the target closer to 4%. Keeping it at 5% would make the need for further stimulus more likely. In Europe, the tone is more positive with most major benchmarks trading higher and the STOXX 600 trading fractionally higher. Comments from an ECB official, Villeroy de Galhau, suggested an expectation for inflation still being on pace to return to the 2% target. This view would boost the odds of a 25-bps cut at the December meeting.
In the US, futures were also modestly higher ahead of jobless claims (initial lower than expected, continuing higher) and the Philly Fed (weaker than expected) at 8:30 and then Existing Home Sales and Leading Indicators for October at 10 AM. Treasury yields are modestly lower. Crude oil is up over 2%, along with gold, which is up about 0.5%. The real story, however, is Bitcoin, which is up over 3% and within 3% of $100,000.
All that hype, and all we have to show for it is a fractional gain in the pre-market. Anticipation of Nvidia’s (NVDA) earnings report last night started last week, and expectations were for a big move. Options markets were pricing in the possibility of an 8% move today in reaction to earnings which would equate to $300 billion in market cap. There aren’t even 30 companies in the United States with $300 billion market caps! NVDA finally reported last night, and after reporting better-than-expected earnings and revenues as well as raising guidance, the stock traded down as much as 5% but is now trading fractionally higher. The options market was only off by a factor of nearly ten!
Where NVDA finishes the day today is anyone’s guess, but a key level for the stock in the short term is $150, which it has had trouble getting above multiple times in the last two weeks. Since first trading above $140 in June, NVDA really hasn’t done much of anything, even though the rest of the market has rallied.
NVDA is the largest component of the Philadelphia Semiconductor Index (SOX) and the largest company in the world, and its massive rally this year has been more of an exception within the semiconductor space than anything else. As shown in the chart below, the SOX is down over 15% from its record high in June.
Of the 30 stocks in the SOX, their average YTD performance has been a gain of 13.7%. However, that number has been skewed by a few big winners. The median performance of the 30 stocks in the index has been a gain of just 1.46%, and only seven stocks in the index are outperforming the S&P 500 on a YTD basis. For a sector that’s typically been considered a leading indicator for the overall market and the economy, the semis are no longer a green light.
The Closer – Neutral Rate, NVDA, State JOLTS – 11/20/24
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Looking for deeper insight into markets? In tonight’s Closer sent to Bespoke Institutional clients, we lead off with a look into estimates of neutral rates in addition to NVIDIA (NVDA) earnings results (page 1). We then provide a look into state level JOLTS data (page 2). We also review the weak 20-year bond auction (page 3) and latest release of EIA data (page 4).
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