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Summary

Monday Tee Up: Nvidia and Walmart Two giants report earnings this week: Nvidia, providing a benchmark for the growth of AI, and Walmart, shining light on the health of the consumer. The economic calendar is light, though some stats will come in on housing. Meanwhile, Wall Street will continue to evaluate if the Fed is likely to cut interest rates further at their next (and final for 2024) policy meeting next month. Chairman Powell made comments last week suggesting that the Fed is in no hurry to act. The Dow Jones Industrial Average finished the week with a decline of 1.2%, the S&P 500 was lower by 2.1%, and the Nasdaq fell 3.2%. For the year, the Dow is higher by 15%, the S&P is up 23%, and the Nasdaq has popped 24%. The earnings calendar is packed again this week. On Tuesday, Walmart, Lowe’s, Medtronic, Spotify, Tyson Foods, and AstraZeneca are among the companies that report. On Wednesday, Nvidia, Snowflake, Palo Alto Networks, Target, TJX, and William-Sonoma. On Thursday, Intuit, Warner Music, The Gap, BJ’s, and Deere. So far, 460 of the S&P 500 companies have reported and earnings are coming in 8.8% higher than in the prior-year quarter. Communication Services, up 26%, and Technology, up 17%, are leading. Energy, down 26%, is underperforming. Based on our outlook for continued economic growth through 2025, we have raised our 2025 and 2026 forecasts for S&P 500 earnings from continuing operations. For 2025, we are raising our forecast to $276, from $265. Whereas our prior forecast assumed high-single-digit growth, our revised forecast models full-year EPS growth of 11.8%. For 2026, we are raising our forecast to $307 from a preliminary outlook in the $285 range. Whereas our prior forecast assumed high-single-digit growth, our revised forecast models full-year EPS growth of 11.2%. On the economic calendar, the National Association of Homebuilders Index for November will be released on Monday. Argus’ Chief Economist Chris Graja, CFA, is watching the expectations component to see if builders remain optimistic about prospects for the next six months, even as Treasury and mortgage rates have risen. Chris says the traffic component may help us to see how prospective buyers are reacting to the jump in rates. On Tuesday, Housing Starts for October will be released, with a consensus expectation for a seasonally adjusted annual rate of 1.34 million. Argus’ estimate is 1.29 million. This is an important indicator because it shows whether builders are confident in the economy, future housing conditions, and their ability to move inventory. Affordability remain

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