VIDEO: Upcoming Reports Tied to Key Nvidia Levels

In today’s Portfolio video, Chris Versace shares the Portfolio’s game plan for this week, and it’s a full one as we get back to work after the Thanksgiving holiday. 

Chris reviews the findings about consumer spending for Black Friday and explains how we’ll be using that as a barometer for Costco’s (COST)  November sales report due later this week.

We also share what we expect to hear from Marvell (MRVL)  this week, and why announcements at Amazon’s  (AMZN)  AWS re:Invest 2025 event could be positive for Marvell. In keeping with AI and data center chip demand, we touch on two other upcoming reports the market will be eyeing, and tie that to key levels we’re watching for Nvidia (NVDA)  shares.

Chris also walks through Monday's November ISM Manufacturing PMI report but explains why other reports this week will be far more impactful when it comes to next week’s Fed policy decision. 

Transcript

CHRIS VERSACE: Hey, folks. Chris Versace here. It is Monday, December 1. And I hope you all had a wonderful Thanksgiving and didn't break the bank if you participated in what's being billed as a very robust Black Friday sales event. All told, about $11.8 billion were spent on the day. That's up about 9.1% according to the figures published by Adobe Analytics. And yes, other reports seem to validate that consumers, they were using AI to help ferret out deals, sales, and other sweeteners during, not only Black Friday, but really Thanksgiving and, of course, the holiday shopping weekend that saw just a wave of deals.

Obviously, a lot of retailers are looking to cash in and meet consumers where they are. Again, we've talked all about the pressures that consumers are feeling and that they are trading down, looking for deals. We saw that very much so when TJX reported its latest quarterly results with very impressive comp sales. But at the same time, we have to remember that the comp sales for Costco were extremely strong relative to almost anybody else out there. That's why we picked up some shares with the portfolio in November.

And in the next couple of days, we will get the company's November comp sales report. That's right. That will come out on Wednesday after the market close. We suspect that it's going to be another robust one, given some firsthand lines that we've seen at Costco and other reports that we've gathered. Remember, we'll want to be assessing what Costco's e-commerce sales are as well, just given the data that we saw about Black Friday and for Thanksgiving as well, which also showed consumers leaning in to digital shopping.

And when we assess Costco's figures, we'll want to remember that the company is lapping extremely strong adjusted comp sales figures in the year ago period. But all in all, we suspect the report is going to validate not only our bullish stance on Costco, but also our decision to pick up more shares, like I said in early November.

Now, before we get to Costco's report, we will have quarterly results from Marvell, that's coming after Tuesday's market close. And here, too, we expect an upbeat report, given what we've seen not only on AI and data center announcements, but also comments from the likes of Cisco and others that, yes, we are starting to see that rebound in networking spending. Remember, this will be a positive for Marvell's non-AI data center business, which of course refer more to as its carrier infrastructure business and enterprise networking. But we do expect Marvell to benefit from AI and data center and the continued ramp in its custom silicon business. Again, that is for AI. They count various customers, including Amazon.

Now, when we think about Marvell's report, we are going to want to pay close attention to what is said today and the next couple of days at Amazon's AWS Reinvent 2025 event. Odds are, since the event is focused on AWS, we're going to hear quite a bit about AI and data center capacity wins, and we wouldn't be surprised if we see Amazon make some noise about its trainium chips, for which Marvell is a partner.

Now, as we think about all of that, remember too that we recently upgraded Marvell shares to a 1. And when the company reports, we suspect that what it has to say about matriculating design wins, particularly for AI custom silicon, is going to validate that decision. We'll also want to be listening over the next couple of days, in addition to all of that, to what is said or shown in the November monthly revenue reports from Taiwan Semiconductor And for Foxconn.

Remember that when we put these two together, they'll give us some nice incremental data points for AI, data center, and server demand, but also for smartphones as well. So it's going to have quite a bit of touch points, just like it does every month. But given what's going on in the marketplace regarding, not only AI trade, but also other chip stocks. This report should be particularly revealing, insightful, and, in our view, constructive.

We will also say that as we watch these reports and these other comments, we're going to keep a close eye on NVIDIA. Remember last week, we shared that we were closely watching a particular pick-up point. What we wanted to see at the time was NVIDIA shares holder 100-day moving average. But as we closed out November, they moved below that. So we're going to continue to watch that technical level. And that 100-day moving average has inched up a skinch to about 181. So remember, we'll want to see NVIDIA move above that. Hold that support. That will clear the decks and allow the shares to move higher.

But as if that wasn't enough to get our engines going after all that turkey, that pie, and, if you're me, cranberry sauce, we do have a new month. As I mentioned, it is December 1. And that means over the next couple of days, we will be extremely busy digging into the fresh economic data that we get because we have a Fed policy decision ahead of us.

Now, I know that we saw the market's expectations for a December rate cut, flip-flop, teeter totter, call it whatever you will during the month of November. They started off extremely high, fell, and then rebounded towards the end of the month. So as we come into December, there's about an 86%, 87% probability, per the markets and the CME FedWatch tool, that the Fed will deliver a 25 basis point rate cut next week. Because the policy decision is next week, that means this week we are in the blackout period. What does this mean? There will be no Fed heads making any rounds, giving any speeches, or saying anything about the volume of economic data that we will be getting this week.

Now, what data are we getting? Well, today we will get the-- or we already got the ISM manufacturing PMI. Wednesday, we'll get the ISM services PMI. We'll also get the ADP November employment change report. And on Thursday, we'll get the November Challenger job cuts report. Remember, we will not be getting a November employment report ahead of the Fed meeting. That comes mid-month, along with some other data. That's being pushed off, arguably, because it's still being collected from the government shutdown. Whatever. We'll just simply deal with the data that we have.

So with that, let's talk about the ISM manufacturing data for November that came out already this morning. I have to say a bit of a disappointment. We saw just about every metric move lower. The headline PMI number certainly moved lower. The employment number fell to 44. That's down month over month, not the lowest that we've seen so far this year, but certainly much lower than we saw in September and October. So if you're thinking bad news could be good news for a potential rate cut, possible. But remember-- and I say possible because, as we have tend to talk about manufacturing is only about 10% to 15% of total GDP. What we see in the services PMI report on the employment front will be far more insightful. And again, that report is out on Wednesday.

In terms of inflation, the November manufacturing PMI report moved up. That was the only number to move higher, not necessarily a good thing. We would want to see the inflation component hold steady or preferably move lower. But context, we have to remember that when we look at the November data compared to October, yes, it ticked higher. But the October manufacturing PMI for prices was still well below anything we saw between the March and September time frame. So yeah, it's up a little bit. But when we look at the longer term trend, really not that big of a deal. Remember, what we see in the services PMI report, that will be much, much more important.

Now, let's think about some of the other data that we're getting this week. Because the focus will be on what we see on the employment front and the inflation front as I just mentioned. So on the inflation front, it's really going to be the services PMI is the next thing to watch. But on the employment report side, what do we have? Well, I already mentioned that we have ADP's November employment change report coming. And the expectation is the November figure is going to show just 10,000 or so jobs being created. That's down from about 40,000 in October. And remember that in August and September, ADP found that we actually lost jobs.

So as we think about this, if we get another tepid print, odds are the market's going to be reacting somewhere between what do we see on the inflation front? What are we seeing in the jobs front? We know the Fed is kind of skewed right now moreso towards the trends in the employment market. So we'll be continuing to watch that. But again based on what we see in the data this week, perhaps it will confirm that the Fed will deliver a hawkish cut next week. That means that, yes, they will cut. But they will continue to talk about the dual risks to their mandate and the upward trend in inflation, if that is indeed what we see later this week.

So while folks might get a jittery based on the data, what we're going to do is we're going to continue to look at the data in aggregate, not react to any one particular data point. Why are we going to do that? Because it's going to give us a much clearer picture of what's not only unfolding, but a more likely picture for what the Fed is going to do and say next week.

If the data confirms that we are likely to see the Fed deliver that hawkish cut, that will be a good thing. If on the other hand, for some reason, some of the employment data we see in the ISM services PMI for November and the ADP employment report for November surprised demonstratively to the upside, that could rankle things. It could make the market a little volatile. Remember what we said last week, that we expected the market to melt up during the Thanksgiving holiday week-- which it did-- and that we could be primed to see a retest of key support levels this week.

The melt up in the market last week meant that we bounced off the 100-day moving average and for the S&P 500 and sailed through the 50-day moving average also for the S&P 500. So as we watch what's happening in the market today and over the next couple of days, we'll keep an eye towards those key support levels. What we want to see again is a retest that will help clear the decks and hopefully allow the market to move higher, subject to some of the other things that we have to watch in the coming days.

What am I talking about? The Fed-- sorry, not the Fed. Fed Chair Powell-- sorry, sorry, sorry, sorry. President Trump has said that he has made his decision about the next Fed Chair. So we could perhaps hear about that sooner or later. Also looming in the background is the Supreme Court and their ruling on President Trump's use of tariffs. Now, that could be a potential wrinkle. My suspicion is that given the complexities and challenges of reversing the tariffs that the Supreme Court is likely to roll in a positive fashion with what's happened. But we will see. If it does not, that would be something else that could rankle the markets as we move into the final month of the year.

As you can tell, folks, we've got a lot going on this week. So please check your emails, check your alerts. If we make any moves with the portfolio, we want to make sure you are right there with us. And today especially, please stay tuned. Because not only do we have a lot more coming your way, we also have the November monthly roundup being published later today. Not only does it have a full recap of everything we did during the month of November, but it also has a detailed update for each portfolio holding. It's a lot to chew through. I think you're going to enjoy it. And remember, we've got a lot more coming. Stay tuned. 

At the time of publication, TheStreet Pro Portfolio was long COST, MRVL, AMZN and NVDA.