Stocks closed higher on Monday, with financials, consumer discretionary and industrials leading but technology and materials lagging among the 11 S&P 500 sectors. Standouts included Trump-trade names and the cryptocurrency complex, as the S&P 500 closed above 6,000 and bitcoin surged past $87,000.
The bond market was closed in observance of Veterans Day, and there was no economic data to report. Investors also digested a relatively light flow at the tail end of another generally positive earnings season and looked forward to Wednesday's release of Consumer Price Index (CPI) data for October by the Bureau of Labor Statistics (BLS).
According to FactSet, with 91% of S&P 500 companies reporting actual results through Friday, 75% have reported a positive earnings surprise and 60% have reported a positive revenue surprise. If the blended year-over-year earnings growth rate of 5.3% holds, it will mark the fifth consecutive quarter of year-over-year earnings growth for the index. The forward 12-month price-to-earnings ratio for the S&P 500 is 22.2, above both the five-year average of 19.6 and the 10-year average of 18.1.
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This week's earnings calendar is highlighted by Home Depot (HD) before Tuesday's opening bell, Cisco Systems (CSCO) after Wednesday's closing bell and Walt Disney (DIS) before Thursday's open.
Meanwhile, on the economic front, the Federal Reserve Bank of Cleveland's Nowcast estimate for annual headline CPI was 2.6% as of November 8, up from 2.4% in September. The forecast for month-over-month CPI was 0.2%, down from 0.3% in September. Readings for core CPI, which excludes food and energy prices, were 3.3% on an annual basis and 0.3% on a monthly basis, both in line with September.
With another rate cut by the Federal Reserve in the rearview mirror and investors continuing to price a second Trump administration, the S&P 500 rose early and faded late but held on to close up 0.1% at 6,001. The Dow Jones Industrial Average was up 0.7% to 44,293. And the tech-heavy Nasdaq Composite inched into the green just before the closing bell to close up 0.1%, at 19,298.
Wedbush's Ives raises his Tesla target
Elon Musk's aggressive bet on Donald Trump is already paying off, with Tesla (TSLA) rising as much as 11.6% and ending Monday up 9%. TSLA stock rallied more than 8% on Friday and crossed back over the $1 trillion market capitalization mark it surrendered in April 2022.
"We are raising our price target on Tesla to $400 from $300 as we believe the Trump White House win will be a game-changer for the autonomous and AI story for Tesla and Musk over the coming years," writes Daniel Ives of Wedbush Securities. Wedbush also reiterated his Outperform (Buy) rating on TSLA.
"We estimate the AI and autonomous opportunity is worth $1 trillion alone for Tesla," Ives continues, "and we fully expect under a Trump White House these key initiatives will now get fast-tracked as the federal regulatory spiderweb that Musk & Co. have encountered over the past few years around full self-driving/ autonomous clears significantly under a new Trump era."
The bottom line for Ives is that "Tesla remains the most undervalued
AI play in the market today. In essence, Musk made a strategic and big bet on a Trump White House win that will be known as a 'bet for the ages' for TSLA bulls."
Meanwhile, what had been the headline AI stock, Nvidia (NVDA) was down 1.6% on Monday, again weighing on the Dow after it was added to the 30-stock index on Friday.
NVDA has recorded two straight down days since its inclusion in that iconic index, though it remains within 2.5% of its November 7 all-time closing high of $148.88. And Wall Street remains bullish on the stock ahead of its November 20 fiscal third-quarter earnings release.
Indeed, Piper Sandler analyst Harsh Kumar raised his price target for NVDA from $140 to $175 on the expectation of "extremely strong" results for the semiconductor maker's new Blackwell chips.
"We are making Nvidia our top large-cap pick given the company's dominant position in AI accelerators and the upcoming launch of the Blackwell architecture," Kumar writes in a note on Monday.
As Kiplinger's Dan Burrows notes, "The DJIA is certainly more representative of whatever it's supposed to represent with NVDA in it… But apart from having the imprimatur of the editors of the Dow, nothing fundamental has changed."
Stocks on the move
With the price of bitcoin surging to new highs on expectations of friendlier regulatory treatment under a new Trump administration, stocks related to the world's first cryptocurrency are rising too.
"Welcome to the crypto bull market. Buy everything you can," writes Bernstein Global Digital Assets Senior Analyst Gautam Chhugani in a Monday note. "We rejoice in the new-found global crypto optimism post the Trump election win."
Expressing confidence in a $200,000 price target for bitcoin, Chhugani explains, "we believe the risk-reward over the next 12 months is favorable."
Cryptocurrency exchange operator Coinbase Global (COIN) was up 19.8% on Monday and online trading platform Robinhood Markets (HOOD) added 7.4% on optimism about rising trading volumes and more rapid growth for digital assets generally.
MicroStrategy (MSTR), whose co-founder and executive chairman Michael Saylor has led a strategy of building the company treasury around bitcoin ownership, was up 25.7%.
Saylor disclosed in a post on X on Monday that MicroStrategy purchased another 27,200 bitcoin for $2.03 billion, its largest purchase since December 2020. As of November 10, MicroStrategy holds 279,420 bitcoin purchased for approximately $11.9 billion, or about $42,692 per bitcoin.
"We think that bitcoin could become the next Strategic Reserve Asset," Saylor added in another post on X.
As Susannah Streeter, head of money and markets at Hargreaves Lansdown, observes, Trump has "made an about turn on supporting the industry and is now vowing to turn the U.S. into the crypto capital of the world."
Streeter further notes that the soon-to-be 47th President of the United States has raised expectations among bitcoin speculators for an easier regulatory environment as well as "expectations that the authorities may build up a reserve crypto fund, helping lift ongoing demand."
As Kiplinger's Will Ashworth writes in his feature on the best bitcoin and crypto ETFs to buy, "It should go without saying that bitcoin and other digital assets remain highly speculative and should be approached with extreme caution."
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