Market Snapshot
| Dow | 47954.78 | +104.05 | (0.22%) | | Nasdaq | 23578.16 | +72.99 | (0.31%) | | SP 500 | 6870.39 | +13.28 | (0.19%) | | 10-yr Note |
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| | NYSE | Adv 1270 | Dec 1448 | Vol 1.16 bln | | Nasdaq | Adv 2103 | Dec 2576 | Vol 8.28 bln |
Industry Watch
| Strong: Communication Services, Consumer Discretionary, Information Technology |
| | Weak: Utilities, Health Care, Industrials, Consumer Staples, Energy, Materials |
Moving the Market
--Broad-based early strength
--Netflix to acquire Warner Bros. Discovery in $72 billion cash and stock transaction
--Stocks little changed following September PCE report
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Stocks drift hgiher ahead of next week's FOMC decision
05-Dec-25 16:25 ET
Dow +104.05 at 47954.78, Nasdaq +72.99 at 23578.16, S&P +13.28 at 6870.39
[BRIEFING.COM] The stock market had another somewhat subdued session today, with the S&P 500 (+0.2%), Nasdaq Composite (+0.3%), and DJIA (+0.2%) keeping with the recent trend of modest growth and adding to their week-to-date gains.
Stocks were little changed following the delayed release of the Personal Income/Outlays report for September, which showed in-line Personal Income growth (0.4%) while Personal Spending growth (0.3%; Briefing.com consensus 0.4%) was below expectations. September PCE Price growth (0.3%; Briefing.com consensus 0.3%) was in-line, and core PCE Price growth (0.2%; Briefing.com consensus 0.3%) was slightly cooler than expected, reducing the year-over-year growth rate to 2.8% from 2.9% in August, though this remains well above the Fed's 2.0% target.
While this was the last inflation reading before next week's FOMC decision, it had little effect on the major averages, largely because it had no effect on the market's rate-cut expectations. The CME FedWatch tool currently assigns an 87.2% probability to a December rate cut, down from 88.2% yesterday, and a 25.1% probability to an additional cut in January, down from 25.4% yesterday.
In corporate news, the headline that Netflix (NFLX 100.24, -2.98, -2.89%) has entered into a definitive agreement to acquire Warner Bros. Discovery (WBD 26.06, +1.52, +6.19%) in a cash and stock transaction worth $72 billion was perhaps the most widely discussed happening today. Paramount Skydance (PSKY 13.36, -1.46, -9.82%) , which also submitted a bid for WBD traded sharply lower, with CNBC reporting that the company is considering taking a direct bid to WBD's shareholders.
Alongside all of the acquisition buzz, Alphabet (GOOG 322.09, +3.70, +1.16%) and Meta Platforms (META 673.42, +11.89, +1.80%) quietly mounted some of the best performances across mega-cap names, which helped the communication services sector (+1.0%) finish as the top-performing S&P 500 sector.
Despite some weakness in its own largest components, NVIDIA (NVDA 182.41, -0.97, -0.53%) and Apple (AAPL 278.78, -1.92, -0.68%), the information technology sector (+0.5%) also finished with a solid gain as a majority of its components traded higher.
The consumer discretionary sector (+0.4%) rounded out the three S&P 500 sectors that finished higher, with Ulta Beauty (ULTA 601.50, +67.55, +12.65%) capturing the widest gain across S&P 500 names after a beat-and-raise Q3 earnings report.
The financials and real estate sectors finished flat, while six sectors finished lower. Losses were relatively modest, with the exception of the utilities sector (-1.0%), which extended its week-to-date losses to 4.5%, the widest across S&P 500 sectors.
The health care (-0.4%) and consumer staples (-0.3%) sectors were also among the laggards as defensive sectors faced some pressure this week.
Overall, the major averages continued to drift modestly higher, with buyers showing little urgency ahead of next week's FOMC decision. With expectations for policy largely unchanged and catalysts scarce, stocks appear content to meander within recent ranges as the market waits for clearer signals from the Fed.
U.S. Treasuries retreated on Friday, sending the 30-year note yield to its highest level since early September, while yields on 5s and 10s settled just below their November highs. The 2-year note yield settled up three basis points to 3.56% (+7 basis points this week), and the 10-year note yield settled up three basis points to 4.14% (+12 basis points this week).
- Nasdaq Composite: +22.1% YTD
- S&P 500: +16.8% YTD
- Russell 2000: +13.1% YTD
- DJIA: +12.7% YTD
- S&P Mid Cap 400: +6.4% YTD
Reviewing today's data:
- September Personal Income 0.4% (Briefing.com consensus 0.4%); Prior 0.4%, September Personal Spending 0.3% (Briefing.com consensus 0.4%); Prior was revised to 0.5% from 0.6%, September PCE Prices 0.3% (Briefing.com consensus 0.3%); Prior 0.3%, September PCE Prices - Core 0.2% (Briefing.com consensus 0.3%); Prior 0.2%
- The key takeaway from the report is that it revealed a very sticky inflation component that remains well above the Fed's 2.0% inflation target. That likely won't prevent the Fed from cutting rates next week, but it will likely factor into a "hawkish cut," as the Fed implies it will be inclined to wait longer for the next rate cut.
- October Factory Orders DELAYED (Briefing.com consensus -0.3%)
- December Univ. of Michigan Consumer Sentiment - Prelim 53.3 (Briefing.com consensus 52.0); Prior 51.0
- The key takeaway from the report is its note that consumers' overall view can still be thought of as broadly somber, notwithstanding the month-over-month increase, due to the burden of high prices.
- Consumer credit increased by $9.2 billion in October (Briefing.com consensus: $9.8 billion) following a downwardly revised $11.0 billion increase (from $13.0 billion) in September.
- The key takeaway from the report is that the expansion in consumer credit in October was paced by revolving credit, which could be construed as a sign of consumers leaning more on credit cards to fund spending needs due to disposable income being pinched by higher prices (and missing paychecks for some during the government shutdown).
October Consumer Credit
05-Dec-25 15:30 ET
Dow +121.45 at 47972.18, Nasdaq +58.51 at 23563.68, S&P +13.87 at 6870.98
[BRIEFING.COM] The major averages are little changed from previous levels just before the close.
Consumer credit increased by $9.2 billion in October (Briefing.com consensus: $9.8 billion) following a downwardly revised $11.0 billion increase (from $13.0 billion) in September.
The key takeaway from the report is that the expansion in consumer credit in October was paced by revolving credit, which could be construed as a sign of consumers leaning more on credit cards to fund spending needs due to disposable income being pinched by higher prices (and missing paychecks for some during the government shutdown).
Bidding war for Warner Bros. Discovery not quite over
05-Dec-25 15:05 ET
Dow +156.39 at 48007.12, Nasdaq +67.23 at 23572.40, S&P +15.12 at 6872.23
[BRIEFING.COM] The S&P 500 (+0.2%), Nasdaq Composite (+0.3%), and DJIA (+0.3%) maintain their modest gains with an hour left in this week's action.
CNBC has provided some color on the widely discussed acquisition of Warner Bros. Discovery (WBD 25.89, +1.35, +5.50%), reporting that Paramount Skydance (PSKY 13.64, -1.18, -8.00%) is mulling taking an offer to the company directly to shareholders.
Meanwhile, Netflix (NFLX 100.68, -2.54, -2.47%) is confident they will get the regulatory approval needed to make the deal go through.
S&P 500 Lags as DLTR, MRNA and OMC Lead Gainers; WRB Slides on MSI Stake News
05-Dec-25 14:30 ET
Dow +144.26 at 47994.99, Nasdaq +64.15 at 23569.32, S&P +15.68 at 6872.79
[BRIEFING.COM] The S&P 500 (+0.23%) is in last place on Friday afternoon, up about 15 points.
Briefly, S&P 500 constituents Dollar Tree (DLTR 125.49, +9.62, +8.30%), Moderna (MRNA 27.50, +2.01, +7.89%), and Omnicom (OMC 74.21, 4.04, +5.76%) pepper the top of the standings. DLTR and MRNA move higher despite a dearth of corporate news, DLTR hitting a year-and-a-halt high for good measure, while OMC rallies in part based on a UBS target raise to $108 from $99.
Meanwhile, W.R. Berkley (WRB 67.63, -3.24, -4.57%) is one of today's worst performers, continuing its recent losses amid news that Mitsui Sumitomo Insurance Co., Ltd. acquired beneficial ownership of at least 12.5% of the Company's outstanding common stock; losses pile on today as investors may see the MSI purchase as already expected and offering limited new strategic upside, while recent analyst downgrades highlight weakening fundamentals and an overextended valuation.
Gold Holds Steady but Clocks Weekly Gain as Softer Dollar, Fed-Cut Hopes Lend Support
05-Dec-25 14:00 ET
Dow +176.64 at 48027.37, Nasdaq +66.87 at 23572.04, S&P +17.95 at 6875.06
[BRIEFING.COM] The tech-heavy Nasdaq Composite (+0.28%) is in second place on Friday afternoon, up about 67 points.
Gold futures settled flat at $4,243.00/oz, on Friday but logged a modest weekly gain (+0.66%) as a softer U.S. dollar and growing expectations for Fed rate cuts continued to underpin the yellow metal. Traders stayed cautious ahead of upcoming U.S. inflation data, which could recalibrate those rate-cut bets and set the next direction for bullion.
Meanwhile, the U.S. Dollar Index is down less than -0.1% to $98.99.
Hewlett Packard Enterprise hit by AI server shipment delays, but order growth remains strong (HPE)
Hewlett Packard Enterprise (HPE) reported mixed results for 4Q25, beating earnings expectations but falling short on revenue, and issuing a cautious outlook for the near-term due to "lumpy" AI server delivery schedules.
- The company's disappointing revenue is being primarily impacted by the timing of AI server shipments and lower-than-expected U.S. federal spending.
- AI server demand is proving to be uneven. This is due to large government and enterprise customers placing orders with extended lead times or delaying their deployment dates, which defers the revenue recognition to future quarters.
- The decline in its core business segments was notable. Server segment revenue decreased 10% qtr/qtr to $4.5 bln.
- Revenue for hybrid cloud declined 12% yr/yr to $1.4 bln, reflecting generally softer trends in this segment.
- The results are disappointing compared to competitor Dell (DELL), which recently reported a $12.4 bln record in AI server orders and saw its Servers and Networking revenue surge 37% yr/yr in its latest reported quarter.
- On the positive side, HPE commented that the underlying demand environment was strong, with robust server order growth across both traditional and AI products. Management noted that orders were growing faster than revenues in the period.
Briefing.com Analyst Insight:
HPE finds itself in a challenging "show-me" position after reporting a noticeable disparity between booming orders and slowing recognized revenue. While the achievement of a record non-GAAP operating margin and an EPS beat proves effective cost management, the stock sell-off reflects skepticism over the revenue generation timeline, particularly when contrasted with the aggressive growth numbers posted by competitor DELL. The concentration of AI bookings in sovereign customers now accounts for the lion's share of the company's backlog, but this customer profile inherently brings extended lead times and significant lumpiness. The near-term outlook suggests the market must wait until the latter half of FY26 for the majority of these major AI deals to ship and contribute meaningfully to the top line. Until HPE demonstrates a more consistent conversion of its AI pipeline into recognized revenue, the stock is likely to trade at a discount compared to its faster-moving infrastructure peers.
Ulta Beauty Paints a Pretty Beat-and-Raise Q3 as Beauty Holds Up in a Tough Backdrop (ULTA)
Ulta Beauty (ULTA) is trading sharply higher after reporting its Q3 (Oct) results last night, reaching a new all-time high. The beauty retail giant comfortably beat expectations on the top and bottom line, continuing its streak of large double digit EPS upside, while revenue increased 12.9% to $2.86 bln, its strongest growth in nearly three years. It also raised its full-year guide for EPS and revenue above expectations to $25.20-25.50 and about $12.3 bln, respectively, as well as comp sales to +4.4-4.7%.
- Comp sales increased +6.3% (+2.9% in Q1; +6.7% in Q2), split between a 3.8% increase in average ticket and 2.4% increase in transactions, driven by positive comps across all categories and channels, with e-commerce delivering standout double-digit growth.
- By category, fragrance continued to lead with double-digit comp growth, while skincare was the second-fastest-growing category with high-single-digit comps. Makeup, haircare, and services all delivered mid-single-digit comp growth.
- Management noted that despite a softening of consumer confidence in Q3, beauty engagement remained healthy, with both mass and prestige beauty markets delivering mid-single-digit growth.
- ULTA is also building momentum in its growth initiatives, including international expansion, with several new Ulta stores opened in Mexico and its first in the Middle East, and Space NK continuing to perform well in the UK.
- Holiday commentary was constructive but cautious. Management said Black Friday and Cyber Monday were strong and support the higher outlook, but noted the biggest weeks are still ahead and beauty budgets remain tight, with guests focused on value, gift sets, and deals.
Briefing.com Analyst Insight
This report from ULTA underscores the resilience of the beauty category, with both mass and prestige growing at a mid-single-digit pace. ULTA also continues to lean into what it does well, meeting consumer needs and staying close to its Ulta Beauty Unleashed plan, which emphasizes better in-store execution, more effective promotions, and stronger digital and loyalty engagement. Comps remained healthy, and the raised guidance points to continued momentum as it heads into the all-important holiday season. Management acknowledged that consumers remain cautious, but recent performance and the raised guidance suggest ULTA is entering the holidays in a solid position, with guests still prioritizing beauty even as budgets stay tight. Additionally, its international expansion adds another leg of growth optionality, and combined with the strong results, has helped push shares to new all-time highs.
DocuSign Noted: Strong Q3 Signed, But Q4 Outlook Leaves Investors Unsure (DOCU)
DocuSign is trading lower today despite delivering a solid Q3 (Oct) beat. Revenue rose 8.4% yr/yr to $818.4 mln, topping expectations and marking one of its stronger growth quarters in two years. Strength came from continued investment in core e-signature solutions and the expanding Intelligent Agreement Management (IAM) platform.
- Dollar net retention: 102%, up from 100% last year, supported by improved envelope utilization. IAM adoption surpassed 25,000 customers, up sharply from 10,000 in April.
- International revenue: Reached 30% of total revenue for the first time, growing 14% yr/yr.
- Billings: Up 10% yr/yr to $829.5 mln, boosted by early renewals, annual booking shifts, and slight FX help; underlying growth was roughly +8%. Q4 billings guidance: $992--1,002 mln, about +8% growth at the midpoint.
- Note: DOCU will transition away from billings to ARR reporting, including IAM as a % of ARR, to reduce renewal-driven variability. This is the final quarter of billings guidance, with Q4 being the last quarter of reported billings.
- Shares are weaker as investors react to the in-line Q4 revenue guidance, softer than the raised outlook last quarter, and a step down in billings growth versus Q2.
Briefing.com Analyst Insight
DOCU's Q3 results checked many of the right boxes: revenue upside, improving net retention, and clear traction in IAM—an area that is essential for the company's long-term repositioning beyond core e-signature. However, the market is signaling that in-line Q4 revenue guidance is not enough, especially after the company set higher expectations last quarter. The step down in billings growth from Q2 and the muted Q4 billings guide reinforce concerns about the sustainability of DOCU's growth cadence. While moving to ARR should help smooth investor perception over time, we think the near-term sentiment overhang persists until DOCU proves that IAM can consistently accelerate overall growth. For now, DOCU remains a show-me story, with solid fundamentals but limited visibility into reacceleration.
Netflix snaps up HBO, creating streaming powerhouse, but deal clouded by antitrust scrutiny (NFLX)
Netflix (NFLX) has emerged as the winning bidder for Warner Brothers Discovery (WBD) after a lenghty bidding process, offering a cash and stock deal valued at approximately $82.7 bln. The transaction, however, has triggered a sell-off in NFLX shares due to concerns over shareholder dilution and significant regulatory hurdles.
- The offer price of $27.75/share represents a massive 121% premium to WBD's closing price on September 10, the day prior to initial deal reports.
- NFLX prevailed over rival offers, including a reportedly higher $30/share all-cash bid for the entire company from Paramount Skydance (PSKY), and a $27-$28/share offer from Comcast (CMCSA) specifically for the streaming assets.
- The acquisition will not close until WBD splits off its Global Networks division (CNN, TNT, Discovery sports/news brands) into a separate publicly traded company, expected in 3Q26. NFLX is exclusively acquiring the streaming assets, specifically HBO and HBO Max.
- NFLX projects the deal to be accretive to GAAP EPS by year two, with annualized cost savings of at least $2-$3 bln fully realized by the third year.
- A combined NFLX and HBO/HBO Max entity would create an unrivaled streaming powerhouse, adding nearly 130 mln subscribers, bolstering NFLX’s library against key rivals like Disney (DIS) and PSKY.
- Significant regulatory headwinds loom over the agreement, with the Trump Administration explicitly signaling skepticism regarding a NFLX-WBD combination. The potential for antitrust regulators to block the deal due to reduced competition in the streaming landscape adds a severe layer of uncertainty.
- NFLX stock is trading lower on the news, reflecting investor anxiety regarding the dilutive nature of the transaction and the long timeline to close, while WBD shares are trading sharply higher on the premium valuation.
Briefing.com Analyst Insight:
NFLX has made a definitive, aggressive move to consolidate its position as the undisputed leader in the streaming wars, but the victory comes with significant baggage. While the addition of HBO’s prestige content library (Game of Thrones, White Lotus, Band of Brothers, etc.) provides a formidable moat against DIS and PSKY, the market is rightly hesitant about the execution risk. The deal is contingent on a complex spin-off of WBD's linear assets that isn't expected until late 2026, leaving a long window for uncertainty. Furthermore, the regulatory headwinds cannot be overstated; the Trump Administration has already signaled skepticism regarding a NFLX-WBD combination, raising the specter of a blocked deal similar to past antitrust interventions. While the long-term synergies and the creation of a "super-streamer" are compelling, the immediate dilution and the regulatory overhang make this a "show-me" story for NFLX in the near term.
Kroger Lower After Mixed Q3 Results Amid More Cautious Consumer Trends (KR)
Kroger (KR) is sharply lower today after reporting its Q3 (Oct) results this morning. The grocery giant extended its more-than-five-year streak of EPS beats, though the upside was narrower than recent quarters. Revenue was just in line with expectations, increasing 0.7% yr/yr to $33.86 bln. It also narrowed its full-year guidance for EPS and comps to $4.75-4.80 (prior $4.70-4.80) and +2.8-3.0% (prior +2.7-3.4%). The mid-point of its new EPS guidance was a bit shy of analyst expectations.
- Identical sales (ex-fuel) rose +2.6% but softened from Q2 as several pressures weighed on customer behavior, including macro uncertainty, reduced SNAP benefits late in the quarter, and more cautious spending from middle and lower income households.
- Customers made smaller, more frequent trips and cut back on discretionary items, while food, private-label, and ready-to-eat categories remained more resilient, underscoring a consumer that is increasingly focused on value and prioritizing essentials.
- Gross margin expanded 40 bps to 22.8%, supported by lower shrink, improved supply chain costs, and a strong private-label mix, factors that helped support the EPS upside, alongside share repurchases, in a challenging backdrop.
- A big focus was its eCommerce business, which continued its strong performance, increasing 17% and marking six consecutive quarters of double-digit sales growth. KR also expects its e-commerce operations to become profitable in 2026 following its hybrid fulfillment overhaul.
- The revised guidance reflects a continuation of Q3 pressures, tougher Q4 comparisons, and about a 30 bps pharmacy headwind to ID sales tied to the Inflation Reduction Act, with e-commerce and private label remaining important offsets.
Briefing.com Analyst Insight
KR delivered a steady quarter, supported by solid margin expansion, strong private-label performance, and continued digital momentum, enough to extend its long streak of EPS beats despite a challenging consumer backdrop. However, the results weren't strong enough to offset the cautious tone around the consumer or the modestly trimmed expectations in its updated guidance. Identical sales slowed as SNAP timing, inflationary pressures, and reduced discretionary spending from middle income and lower income households weighed on results. Longer term, the expected profitability of e-commerce in 2026 is a meaningful positive, but near-term sentiment is dampened by softer comps and guidance, with the EPS midpoint landing below expectations and ID sales (ex-fuel) nudged lower.
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