US stocks rebound to close Friday's session higher, Thanksgiving turkey price trends for this year

Key Concepts

• Market Performance: Dow, NASDAQ, S&P 500, Russell 2000, S&P 600, sector performance (materials, healthcare, consumer discretionary, communication services, real estate, industrials, financials, staples, tech), large-cap vs. small-cap performance.
• Economic Indicators: Bond market, long-term rates, interest rate sensitive sectors (home builders, retail, regional banks), crypto, meme stocks, AI bubble, earnings reports, central bank buying, US debt.
• Company Performance & Strategy: Inuits fiscal first quarter results, business platform growth, consumer platform growth, AI-driven expert platform strategy, partnership with OpenAI, tax services vs. business services revenue breakdown, credit karma.
• Private Credit Market: Blue Owl Capital, alternative asset managers, private credit, merger of funds, liquidity event, market value discount, haircut, retail vehicles, systemic risk, fund manager marking, market trading value, credit quality, bankruptcies, Jamie Dimon's "cockroach" comment, unknown aspects of private credit.
• AI and Technology: AI's role in business and consumer services, AI-driven expert platform, AI in tax preparation, AI accuracy and testing, LLMs (Large Language Models), ChatGPT, OpenAI partnership, actionable financial advice, tax refunds, One Big Beautiful Bill.
• Upcoming Events: Thanksgiving week trading schedule, retail earnings (Kohl's, Best Buy, Abercrombie & Fitch, Dick's Sporting Goods), tech earnings (Zoom, Workday, Zscaler, Dell, HP Inc.), economic data releases (September retail sales, pending home sales, S&P Case-Shiller home price index, initial jobless claims, September durable goods orders).

Market Action and Weekly Overview

The trading day concluded with a positive close on Wall Street, marking a decent end to a challenging week. The Dow Jones Industrial Average rose 1% (493 points), the NASDAQ Composite saw a slightly smaller gain, and the S&P 500 closed near 1% higher. A significant story of the day was the strong performance of small-cap stocks, with the Russell 2000 up 3% for the day and less than 1% down for the entire week, indicating a significant recovery of earlier losses. The S&P 600 showed a similar trend. These small-cap markets experienced their best day in months.

However, looking at the weekly totals, the market still registered losses. The Dow was down approximately 2% for the week, the NASDAQ down 2.75%, and the S&P 500 down 2%. This highlights the contrast between the day's positive close and the week's overall downward trend.

Sector Performance

Today's sector action across all 11 large-cap sectors of the S&P 500 was positive. The materials sector led the gains, followed by healthcare and consumer discretionary. Communication services, real estate, industrials, financials, and staples also outperformed, with all these sectors up more than 1%. The top two sectors, materials and healthcare, were up more than 2%.

In contrast, the weekly sector performance showed a different picture. Only healthcare, staples, and communication services were in the green for the week. Technology was a notable underperformer, down 5% for the week.

NASDAQ 100 Movers

On the NASDAQ 100, Alphabet was a bright spot, trading near a record high. However, several larger names were in the red, including Nvidia, Microsoft, Broadcom, and Tesla. This weakness in some tech giants overshadowed the day's gains and contributed to the week's tech sector decline. For the week, Nvidia was down 6% after its earnings report, Amazon down 6%, and Microsoft down 7%.

Bond Market Influence and Interest Rate Sensitivity

The bond market saw long-term rates come down by a few basis points today, which may have contributed to the positive market sentiment. Interest rate-sensitive sectors and industries performed well, including home builders (up almost 4.5%), retail (up 3.5%), and regional banks (up over 3%). These sectors were among the top gainers.

Other Market Observations

Crypto was a notable laggard today. Meme stocks, as a function of risk appetite, saw significant gains, suggesting a return of speculative interest. The market is heading into a low-volume, low-volatility Thanksgiving week, with hopes for a turnaround.

Expert Perspectives on Market Trends

Greg Halter, Director of Research at Carnegie Investment Council, offered his perspective on the market. He views the recent market activity not as "troubling" but as a "healthy pause" within a broader seven-month streak of gains for the averages. He emphasized that markets do not move in a straight line and that pullbacks are natural, especially when stocks become "parabolic" and move far from their 200-day moving averages. These pauses, he believes, offer opportunities to enter positions at lower prices.

The AI Theme and Nvidia's Performance

Halter addressed the "AI bubble" discussion, noting that while Nvidia reported strong earnings, the stock sold off. He explained that compounding at current levels becomes increasingly difficult due to the law of large numbers. While not suggesting the AI trend is over, he highlighted the significant weight on companies like Nvidia to continue delivering exceptional results. He also stressed the critical need for power infrastructure in the US to support the growth of AI and data centers.

Gold and Macroeconomic Signals

Regarding gold, Halter observed that the metal has cooled after a strong run. He suggested that gold's performance might not offer clear macroeconomic signals, especially given its decoupling from Bitcoin's performance. He acknowledged concerns about US debt financing and the resulting rush towards commodities like gold. However, he pointed out that gold had been stagnant for a decade before its recent surge, making its current cooling less indicative of a broader macro shift.

Crypto Concerns

On crypto, Halter acknowledged that while it's a concern for some strategists, its market size (around $1.5 to $2 trillion) is still relatively small compared to the stock market. He believes any impact on the stock market from crypto losses is likely a short-term event, given Bitcoin's historical volatility.

Attractive Sectors and Stocks

Halter identified healthcare and energy as sectors that have underperformed in recent years but are showing improvement. He specifically mentioned Johnson & Johnson, Eli Lilly, and Amgen in healthcare, and Chevron and KMI (Kinder Morgan) in energy. He highlighted KMI's role as a major pipeline company for moving energy resources.

Private Credit Market Concerns

David Hollerith reported on growing worries in the private debt market, impacting lenders, including large private lenders. He discussed Blue Owl Capital's decision to call off a merger between its public and private credit funds. This merger was intended to provide liquidity to investors in the smaller, older private fund.

The Blue Owl Situation and Market Valuation Discrepancies

The FT reported that the public fund was trading at a significant discount to the private fund's marked value, meaning investors in the smaller fund would have faced a 20% haircut upon merger. While the merger was scheduled for the next quarter, the situation drew attention to the broader credit backdrop and the valuation discrepancies between public and private markets.

Systemic Risk and Retail Focus

Hollerith clarified that this might not be solely a Blue Owl-specific issue but raises questions about the private credit system's stability. He explained the difference in valuation: private funds are marked quarterly by fund managers, while public funds trade at market value, which is currently lower than their book value, according to fund managers. This situation is particularly relevant as alternative asset managers are increasingly targeting retail investors.

Jamie Dimon's Comments and Market Jitters

He referenced JPMorgan CEO Jamie Dimon's "cockroach" comment about credit, which, though broad, incited concern about the unknown aspects of private credit. Dimon questioned the transparency and potential risks within these types of vehicles, which aligns with the current market jitters and assumptions surrounding private credit.

Inuits Strong Financials and AI Integration

Inuit, a tax and business software company, reported stronger-than-expected results for its fiscal first quarter. The company also announced a $100 million multi-year partnership with OpenAI.

Financial Performance and Strategy

Sandeep Agula, Inuit's CEO CFO, discussed the company's performance, driven by strong momentum in fiscal year 2025. The business platform grew 18%, and the consumer platform grew 21%, resulting in 18% overall company growth. He expressed confidence in the company's guidance for the upcoming quarter and the full year.

Revenue Breakdown and Evolution

Agula clarified that Inuit is a fintech company serving 100 million customers. Approximately 60% of its business serves small and mid-size businesses, about 30% is in tax services, and 10% is from Credit Karma. The company has evolved to serve larger businesses and consumers, moving "upmarket" from its traditional focus on smaller businesses.

AI-Driven Expert Platform

Inuit has been executing its AI-driven expert platform strategy since around 2018. Agula highlighted how AI is integrated into their offerings to guide customer experiences, provide personalized tax preparation, and ensure customers receive all eligible deductions. The AI is tested across millions of customers, and the company provides customers with agency to confirm or change AI-driven decisions. For example, their accounting agent is reported to save customers up to 12 hours a month.

OpenAI Partnership and Actionable Advice

The partnership with OpenAI aims to leverage Large Language Models (LLMs) like ChatGPT to provide specific, actionable financial advice rather than generic recommendations. For instance, if a user queries ChatGPT about a car repair, the partnership will enable Inuit to connect with the user's account and offer tailored advice, such as suggesting tax filing through TurboTax if a refund is likely. This transforms LLMs from providing general financial advice to offering unique, tangible, and actionable financial guidance.

Tax Refunds and the "One Big Beautiful Bill"

Agula anticipates that the "One Big Beautiful Bill" will be a tailwind for the US economy and consumers. He noted that the IRS did not change withholding rates after the bill's implementation, leading to expectations of more people receiving tax refunds than usual in the coming year. This influx of capital into consumers' hands is expected to benefit both Inuit's business and the broader economy.

What to Watch Next Week

The upcoming week will be shorter due to the Thanksgiving holiday. The US stock market will be closed on Thursday, November 27th, and will have a shortened trading session on Friday, November 28th, closing early at 100 p.m. Eastern.

Earnings Reports

• Retailers: Kohl's, Best Buy, Abercrombie & Fitch, and Dick's Sporting Goods.
• Tech Companies:
  • Software: Zoom, Workday, and Zscaler.
  • Hardware: Dell and HP Inc. (on Tuesday).

Economic Data Releases

• Tuesday: September retail sales data, pending home sales, and the S&P Case-Shiller home price index.
• Wednesday: Initial jobless claims and delayed September durable goods orders.