Welcome Back,

Market Headlines 👀 

• US Jolts job openings monthly data to be released tomorrow at 10 am EST.

• Meta Platforms (META) chief of AI is skeptical on quantum computing and doesn’t believe AI super intelligence is near.

• Twilio (TWLO) cuts 5% of its staff affecting about 300 employees.

• Spotify (SPOT) cuts 17% of its staff affecting about 1500 employees.

• Bitcoin (BTC) hits over 42,000 for the first time since May 2022.

• Alaska Airlines (ALK) announces it will buy Hawaiian airlines for $1b.

• Uber (UBER) set to join the S&P 500 later this month.

Earnings 💸

• Gitlab (GTLB)

  • EPS: $0.09 beats (exp. $-0.01)

  • Revenue: $149.7m beats (exp. $141.53m)

S&P 500 Heatmap

Recap Around the Street 🧠

Annual outlook season has begun in earnest on Wall Street. Strategists from around the Street have started publishing their predictions for the S&P 500 next year, and though there are ample critiques about using single point estimates for markets (mostly because it ignores the path that markets can take over the course of the year), it is helpful to understand the logic and drivers behind these different takes on the market.

Much like the separated Scottish Highlander soldiers in the classic song Loch Lomond, we observe that some analysts have taken the high road (predicting a 10% or more increase in the S&P 500 next year), while others have taken the low road (predicting a 10% or more decline in the S&P 500 next year).

The current high road forecast is for 5,100 on the S&P 500 next year, while the low road forecast is for 4,200 on the S&P 500 next year. It is still early in the forecast season, so this range could widen further, however it is a helpful exercise to assess what would need to happen with both earnings and valuations, and all of their underlying drivers, in order to see either of these outcomes come to fruition.(Contributed by Cameron Dawson, CIO at NewEdge Wealth).

Before diving into these different scenarios, we note that the average of the 2024 forecasts is currently 4,663, about 2%+ up from the current level on the S&P 500. This is not an overly aggressive average, but this average consistently and notoriously misses the mark, usually forecasting little change to the index:

• In 2022, the average price target was ~4,825 (+1% from the 2021 close), but well above the 2022 close of 3,839

• In 2023, the average price target was ~4,080 (+6% from the 2022 close), but well below the current S&P level of 4,575

It is also important to note that bulls and bears haven’t changed sides much over the past few years. Those that are bulls today, were also bulls in 2022 (today’s 5,100 high road forecast was for 5,300 two years ago!), while those that are bears today were also likely to be bears in 2023 (though notably, the current Street low is 4,200 in 2024 from JP Morgan, who had the same target for 2023).

One last note is that for all this analysis, looking at the index level will likely continue to be misleading next year. Looking at indices masks great divergence in performance of stocks and sectors under the surface, just as we have experienced in 2022 and 2023. (Contributed by Cameron Dawson, CIO at NewEdge Wealth).

Market Preview 🎞️

• Tuesday, December 5th: JOLTs job openings; ISM services index

• Tuesday earnings: MongoDb (MDB), Sentinel One (S), Nio (NIO),Stitch Fix (SFIX) ,Dave & Busters (PLAY),and Toll Brothers (Toll)

• Wednesday, December 6th: MBA mortgage applications; ADP employment; Unit labor costs

• Wednesday earnings: Gamestop (GME), C3AI (AI), Veeva Systems (VEEV), and Chargepoint (CHPT)

• December 7th: Weekly jobless claims; Challenger job cuts; Consumer credit

• Thursday earnings: Broadcom (AVGO), Docusign (DOCU), LuluLemon (LULU) and Smartsheet (SMAR)

• Friday, December 8th: Non-farm payrolls, including unemployment rate; University of Michigan consumer sentiment and inflation expectations

• Fed speakers in blackout period ahead of the December 12th FOMC meeting

• —> Podcast spotlight: Pounding the Table 👊 : listen now; where you will find in-depth analysis around these highlights, read company deep dives, and interviews with public CEO's!

Enjoy reading?👇

That’s all for this week, folks! We’ll be back around the same time next Tuesday with a curated list of important news, economic data and market highlights. 

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