Markets
Luke Kawa
11/13/24

Stocks go nowhere; small caps stumble again

The S&P 500 was little changed on Wednesday, while the Nasdaq 100 moved 0.2% lower and the Russell 2000 slumped 0.9%, taking some air out of what has been a popular “Trump trade.”

Two of Tuesday’s beaten-up S&P 500 sectors — real estate and consumer discretionary — were the best performers today, each up 0.8%. No sector ETF finished with a gain or loss of at least 1%.

10-year Treasury bonds initially rallied after the October US CPI inflation report was in line with expectations, only to sell off again when Dallas Fed chief Lorie Logan suggested that the central bank might not need to deliver too many more rate cuts to stabilize the economy.

Super Micro Computer was the second-worst performer in the S&P 500, tumbling 6.3% after delaying its quarterly report following the resignation of its auditor amid allegations of accounting irregularities.

Boeing tumbled 3.6% after Southwest Airlines CEO Bob Jordan said the recent strike at the aerospace company would likely crimp their ability to deliver planes to customers.

Charter Communications rose 3.6% after announcing plans to buy Liberty Broadband in an all-stock deal, consolidating parts of billionaire John Malone’s empire.

A day after hitting its lowest levels since the depth of the March 2020 pandemic-induced market panic, shares of Dollar Tree rebounded with a strong gain of 4.6%.

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Luke Kawa
4h
The early rally in US stocks ran out of steam as government shutdown looms

Stocks still ended the day in the green, pulled higher by tech.

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J. Edward Moreno
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Pharma company Aurinia falls after FDA official uses LinkedIn to call out lupus drug

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Luke Kawa

Cava may be an unlikely victim of a potential US government shutdown

Government shutdowns typically aren’t a big deal for the stock market as a whole.

But for Cava, which was founded in Maryland and is headquartered in Washington, DC, there’s the prospect of forgone sales in the event that government employees suddenly have no cause to frequent the fast-casual Mediterranean chain, which means emptier tills as bellies get filled elsewhere.

At the end of Q2, Cava had 398 locations. It currently boasts seven in the district proper, at least 14 a close drive away in Virginia, and 25 in Maryland.

Cava’s annual report singled out the Washington, DC/Maryland/Virginia metropolitan area as having “a high concentration of restaurants” in discussing risk factors for the company. And it may be a particularly bad time to be a slop bowl seller around the nation’s capital.

The potential shutdown would be the latest challenge for Cava as it struggles to stand out amid a myriad of lunch options for working professionals and following the recently announced departure of COO Jennifer Somers.

For what it’s worth, this is not the first time this year Cava has faced concerns about potential weakness in DC. During its Q1 earnings call, Bank of America analyst Sara Senatore questioned Cava’s leadership about a potential impact from DOGE given its “fairly big footprint” in the metro area, and at the time CFO Tricia Tolivar said the company hadn’t really seen evidence of metro-specific softness.

markets
Matt Phillips

Robinhood surges as prediction markets gain traction

Robinhood jumped to an all-time intraday record of more than $132 late Monday morning on growing optimism about the brokerage’s prediction markets business both on Wall Street and within the company’s own executive suite.

(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions. I own stock as part of my compensation.)

Earlier in the day, Robinhood Chief Executive Vlad Tenev posted this tweet spotlighting that more than 4 billion event contracts have been traded on the platform since they began to be offered in February.

Analysts have also been focusing on the uptick in activity in the events contract business as a potential boon for the shares.

Piper Sandler analyst Patrick Moley published a note on Monday highlighting how trading volumes at prediction market company Kalshi soared to new records over the weekend as traders took positions on the outcomes of college and pro football games using event contracts.

Moley estimates that users at Robinhood — which partnered with Kalshi to offer contracts on games — account for between 25% and 35% of Kalshi’s daily event contract activity.

“We continue to expect HOOD will report ~2.5B of event contracts traded in 3Q25 which, at $0.01/contract, translates to ~$25M in revenue,” Moley wrote.

Luke Kawa
8h
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