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Alibaba reports earnings Tuesday: time or buy or sell? (0:40) Michael Burry teases Tuesday announcement. (1:33) DOGE ‘doesn’t exist’ anymore. (2:16)
The following is an abridged transcript:
Investors get a week to regroup after some serious selling, with bulls probably giving thanks the damage wasn’t worse.
The S&P 500 i(SP500) posted a four-day losing streak on Tuesday for the first time since August and ended the week down 2%. The Nasdaq (COMP.IND) shed 2.7%. And the damage could have been worse if Fed-cut hopes hadn’t bailed out Friday.
The markets will be closed on Thursday for Thanksgiving and close early on Black Friday.
Volume will be light — a lot of desks will be dark — but Alibaba (BABA) could pull some traders back to their screens before Tuesday’s bell. Wall Street’s looking for EPS of $0.81 on $34.19B in revenue.
JR Research, which runs the Ultimate Growth Investing group, upgraded BABA to Buy, calling the idea that Chinese securities are “uninvestable” nonsense. They argue Alibaba’s AI initiatives and cloud revival are driving a margin rebound and putting the company at the forefront of China’s AI push.
But SA analyst KM Capital, who has a Strong Sell, says valuation looks stretched and the company’s earnings-surprise record is weak.
Also on the earnings calendar, Agilent Technologies (A) and Zoom Communications (ZM) report Monday.
Analog Devices (ADI), Dell (DELL), Best Buy (BBY), Autodesk (ADSK), Workday (WDAY), Zscaler (ZS), HP (HPQ), DICK’S Sporting Goods (DKS), J.M. Smucker (SJM) and NIO (NIO) join Alibaba for a packed Tuesday.
Deere (DE) and Li Auto (LI) weigh in on Wednesday.
Meanwhile, Michael Burry has teased a disclosure of some kind on Tuesday. There’s speculation the “Big Short” investor could echo his recent warnings about the AI trade or the accounting practices of hyperscalers.
Burry clarified this past week that while he de-registered his hedge fund, he is still trading his own money.
On the economic front, Wall Street gets more delayed data – with September wholesale inflation and retail sales figures out Tuesday.
But the spotlight may land on consumer confidence, after the Conference Board’s October reading slipped to its lowest level since Liberation Day. Economists expect a fourth-straight monthly decline.
Wells Fargo notes that the share of Americans saying “jobs are plentiful” is near its weakest point since 2017 (outside the pandemic), and the squeeze on middle- and lower-income households hasn’t eased.
In the news this weekend, the Department of Government Efficiency has ceased to exist with eight months remaining in its mandate.
Office of Personnel Management Director Scott Kupor told Reuters “That doesn’t exist,” when asked about DOGE’s status.
Meanwhile, DOGE guru Elon Musk says he’s setting his sights on dominating in the AI chip sphere.
“Our goal is to bring a new AI chip design to volume production every 12 months,” he posted. “We expect to build chips at higher volumes ultimately than all other AI chips combined.”
And the FT reports Bill Ackman is planning an IPO of Pershing Square Capital Management as early as next year — after selling a 10% stake in June that valued the firm at $10B. That puts the fund in the neighborhood of private-equity names like TPG (TPG).
For income investors:
Hyatt (H) goes ex-dividend Monday, paying out on Dec. 8.
J&J (JNJ) goes ex-dividend Tuesday, with a Dec. 9 payout date.
T-Mobile US (TMUS) goes ex-dividend on Wednesday and pays out on Dec. 11.
And eBay (EBAY) goes ex-dividend on Black Friday, paying out on Dec. 12.
And in the Wall Street Research Corner, Goldman Sachs says the hedge fund VIP list — the 50 stocks that most frequently appear in top-10 fund positions — remains a megacap tech parade.
Built from 720 hedge funds, the basket has outperformed the S&P 500 in 59% of quarters since 2001, with an average quarterly excess return of 51 bps.
The top 10 are:
Amazon (AMZN), where 157 funds have it as top 10 holding. That’s followed by Microsoft (MSFT) at 123, Meta (META) at 88, Nvidia (NVDA) 85 and Alphabet (GOOGL) at 84.
Taiwan Semi (TSM), Broadcom (AVGO), Apple (AAPL), Visa (V) and AMD (AMD) round it out.