rewrite this title The Daily Breakdown: Retail Earnings Roll Out; Nvidia on Tap

The Daily Breakdown dives into the earnings from Target, Lowe’s, and TJX Companies, while Nvidia’s quarterly results loom after the close.

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What’s Happening?

Retail earnings are rolling out, and so far the tone is cautiously positive. Lowe’s and TJX Companies are moving higher this morning, while Target is down about 2% to 3% in pre-market trading. US indices are also higher ahead of Nvidia’s highly anticipated results later today.

Retail Earnings

While most earnings season heavyweights have already reported — with the majority of S&P 500 firms beating expectations — attention now shifts to retailers. Their results offer valuable insight into the health of the US consumer as we head into the crucial holiday season. Target beat on earnings but narrowly missed on revenue as it continues its turnaround efforts. Meanwhile, TJX once again delivered strong results, beating on both earnings and sales estimates while posting same-store growth “well above the Company’s plan,” according to management.

All Eyes on Nvidia

With a $4.4 trillion market cap and a dominant role in the AI revolution, Nvidia remains in the spotlight. Analysts expect earnings of $1.25 per share on roughly $54.9 billion in revenue — growth of over 50% year-over-year. Even in-line results would be impressive for a company of this size, but as always, guidance from CEO Jensen Huang will likely determine the market’s next move.

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The Setup — Aerospace & Defense ETF 

While the focus has been on AI, quantum, nuclear power, and other themes this year, many investors are seemingly forgetting about aerospace and defense. That’s even as the ITA ETF has rallied ~40% so far this year (and that’s despite the recent pullback). 

Now bulls are hoping ITA can find support as it dips down toward the prior breakout area near $200 and tests down into the 100-day moving average. Ultimately, if ITA can find support in the $190 to $200 zone, then it’s possible that a bounce can materialize for the ETF. However, if ITA breaks below this zone, it could usher in more selling pressure. 

The top five holdings in ITA include: General Electric, RTX Corporation, Boeing, Howmet Aerospace, and General Dynamics. 

Options

ITA is supported by options trading. Investors who are bullish could consider calls or call spreads as one way to speculate on further upside, while bearish investors could consider puts or put spreads to speculate on a further move to the downside. For options traders, it may be advantageous to have adequate time until the option’s expiration. 

To learn more about options, consider visiting the eToro Academy.

What Wall Street’s Watching

BTC

After dropping down to the $90K level yesterday, bitcoin found its footing and turned positive on the day. Bulls are hoping that this could mark the end of Bitcoin’s steep decline…although BTC is back under pressure today. Remember, investors can also utilize ETFs — like IBIT — to gain or reduce exposure to BTC. 

IWM

Heavyweights like Microsoft and Amazon weighed on the Nasdaq 100 yesterday, as the index fell more than 1% on the day, as did the Dow, while the S&P 500 dropped 0.8%. However, the Russell 2000 — small caps — shined brighter on the day, with the IWM ETF rallying 0.3%. While the gain might not be much to brag about, the index was a stark outperformer vs. its large-cap peers. Could this suggest a turning point, not just for small caps but for risk-assets overall? Between crypto and equity investors, bulls are hoping these positive silver lines point to a potential bounce. Check out the chart for the IWM.

Disclaimer:

Please note that due to market volatility, some of the prices may have already been reached and scenarios played out.