Key Takeaways
- Broadcom Projects AI Sales Surge, Boosting Stock By 14% Premarket.
- ServiceTitan IPO Soars 40%, Reviving Slow 2024 Market Sentiment.
- Oil Prices Rise Above $70, Potential Inflation Driver To Watch.
Stocks were broadly lower on Thursday, though modestly so. The S&P 500 fell 0.5% while the Nasdaq Composite dropped 0.7%. Small Cap stocks lost the most with the Russell 2000 down 1.3% and the Dow Jones Industrial Average fell 0.5%. This marks three of the last four days lower for the S&P 500.
It’s been another quiet week overall for stocks, which isn’t all that unusual for this time of the year. Having said that there are some individual stocks worth discussing. Both Broadcom and Costco reported earnings overnight. Shares of Broadcom are higher by 14% in premarket trading after the company said they expect Artificial Intelligence (AI) sales will grow by 65% in the first quarter of next year after already seeing an increase of 200% this year. Costco shares are relatively unchanged after the retailer reported earnings that beat on both the top and bottom lines. The company said e-commerce sales were up 13% from last year. RH, formerly known as Restoration Hardware, reported earnings that missed estimates, but raised fourth quarter guidance. That stock is higher by 18% premarket.
Outside of companies who reported earnings, we had an IPO yesterday. ServiceTitan, a cloud-based service for companies in fields such as plumbing, landscaping and other trades saw shares surge 40% after initial being priced at $71. This could be a positive development heading into 2025 as the IPO market has been very slow of late. Google also announced yesterday they would be increasing their subscription prices for YouTube TV to $83 per month. The service, initially launched in 2017 with a subscription price of $35 pre month as upward pressure continues on streaming services. And finally, Warner Bros. Discovery said it will restructure into two separate divisions. One division will focus on legacy cable TV while the other will focus on studios and streaming. That stock gained over 15% on Thursday.
Some other items of note include oil. Crude oil prices, which had fallen below $68 are now over $70. As I’ve said many times before, if there is one commodity capable of jump-starting inflation, it’s oil. Therefore, this one is worth watching. Also, rates for long-term bonds continue to stay high, despite near certainty that the Fed will cut rates when they meet next week at the Federal Reserve Open Market Committe (FOMC) meeting on Wednesday. The steepening yield curve, as it’s known, suggests the bond market is a bit more concerned about longer term interest rates and taken in conjunction with what we’re potentially seeing with oil it is something I’ll be monitoring.
For today, stocks are trading higher in premarket. That comes after the S&P 500 has fallen three of the last four days, following a record closing high. Therefore, I’m curious if we can hold this morning’s gains. Looking ahead to next week, I expect trading volumes will begin slowing as the holidays approach. There will be some important economic data in the coming weeks, but I expect overall activity to slow. As always, I would stick with your investing plans and long-term objectives.
tastytrade, Inc. commentary for educational purposes only. This content is not, nor is intended to be, trading or investment advice or a recommendation that any investment product or strategy is suitable for any person.