Tesla's SpaceX merger talks, Cisco's outlook, and bond funds

Tesla jumps as Bloomberg reports SpaceX merger could come by December

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Producer prices close out this week; next week brings retail sales on Tuesday, housing starts and the Fed's October meeting minutes on Wednesday, each bearing on borrowing costs.

• CD and savings rates often take their cue from the 2-year Treasury yield, which jumped 13 basis points to 4.86% on Thursday. That yield tracks where traders think the Fed's rate may sit in coming years. A higher reading may let banks offer more on new CDs. The 3-month Treasury bill, a cash benchmark, yields 4.32%. The question is whether the Fed's next rate decision matches that higher path.

• Bond funds may have lost ground on Thursday as the 10-year Treasury yield jumped 12 basis points to 5.10%. Bond prices move opposite to yields. Funds holding longer-dated bonds could be hit hardest, since the 30-year yield also climbed, as noted above. Mortgage quotes, which tend to follow the 10-year, could rise too. The question is whether rising inflation is behind the move; the next consumer price report could show it.

• Broadcom shares added $5,540 on every $100,000 held on Thursday as the stock surged 5.5%. The company added $91 billion in market value, to $1.7 trillion. Broadcom accounts for 1.9% of the value of the 500 largest U.S. companies, so its gain added $108 to $100,000 spread across them by size. The question is whether sales growth can support that value; Broadcom's next quarterly results could show it.

1. 1

   Homeowners borrow against their houses at fastest pace since financial crisis. Americans owed $481 billion on home equity lines of credit in the third quarter, up from $422 billion a year earlier, the Federal Reserve Bank of New York said. Borrowing last grew this fast before the financial crisis. A home equity line is a loan secured by your house. Rates on these lines have fallen to around 7.5%, barely above the 7.2% on a new mortgage, Jefferies said in a note. Jefferies named Home Depot and Lowe's as possible beneficiaries, reasoning that homeowners may spend that equity on their houses. Read more

2. 2

   CSCO · +1.24% Cisco raises full-year outlook, citing a networking supercycle. Cisco raised its fiscal 2027 revenue outlook to $74.8 billion to $75.8 billion, from $72.2 billion to $73.4 billion, the company said after Thursday's close. First-quarter revenue rose 24% from a year earlier to $18.52 billion, led by a 32% rise in product revenue. Chief executive Chuck Robbins said Cisco is in "the very early stages of a multi-year networking supercycle." The shares jumped 1.2% in regular trading before the release. Cisco makes up 0.45% of the 500 largest U.S. companies' combined value, so that gain added $6 to $100,000 spread across them by size. Read more

3. 3

   MSTR · −6.49% Strategy tumbles on concern MSCI could drop it from indexes. Strategy shares tumbled 6.5% on Thursday. Bitcoin lost 6.6% over the past day to $68,644. Mark Yusko, founder of Morgan Creek Capital Management, told crypto commentator Scott Melker that the break below $75,000 disrupted bitcoin's pattern of higher highs and higher lows. Yusko also raised concern that MSCI could drop Strategy from its indexes, putting an estimated $3 billion to $8 billion in fund flows at risk. Those estimates reflect potential exposure, not confirmed selling. On $100,000 in Strategy stock, Thursday's drop cost $6,490. Read more

• Topics: Chips, Big Tech

  Nvidia loses founder Jensen Huang as chief executive and board member

  Closing prices showed Nvidia tumbled 4.3%, while AMD, a rival chipmaker, surged 5.9%. Nvidia accounts for 4.5% of the value of the 500 largest U.S. companies, so its drop took $195 from $100,000 spread across them by size.

• Topics: Chips

  Applied Materials forecasts higher sales as AI lifts chip equipment demand

  Applied Materials forecast first-quarter revenue of $11.1 billion, above analyst estimates of $10.89 billion, and CEO Gary Dickerson said AI continues to fuel demand for chips. The shares rose 0.7% after hours, a sign AI spending is still reaching the toolmakers that supply chip factories.

• Topics: Startups, Markets

  Anthropic listing could draw early index-fund buying, research firm estimates

  Research firm Intropic estimates Anthropic could attract $19 billion of index-fund demand after next week's expected IPO, Reuters reported. Under new rules allowing fast index entry, a fund you own could become a buyer within weeks, though SpaceX's similar post-IPO rally has mostly faded.

Why prices move on the gap between news and what was expected. Consensus is the average analyst forecast, and it works as a bar to clear, not a prediction. Prices often move on the gap between news and expectations. Tesla jumped 1.7% after Bloomberg News reported the company and SpaceX are moving toward a merger. A deal announcement may be judged against hopes already in the price. Tesla is 1.8% of the 500 largest U.S. companies' combined value, so its move added $30 to $100,000 spread across them by size.

Consensus in the glossary

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The big picture. Tesla's jump was the exception on Thursday: 825 stocks fell and 242 rose. Materials funds slid 1.3%, while energy jumped 1.5%. The week still leans up. The Nasdaq-100 has gained 4.8% since Monday after an October drop of 6.7%, and is up 12.0% this year. The S&P 500 fell 0.9% in October, is up 0.2% in November and 10.9% this year. The Dow gained 1.7% in October, 1.0% since and 8.8% for the year.

On the calendar. Producer prices arrive today at 8:30 a.m. ET. The Fed's preferred inflation gauge, the PCE price index, follows Wednesday, Nov. 25, 8:30 a.m. ET, inside Personal Income and Outlays. A firm reading could keep money-market and savings yields near current levels and home equity line rates high. A softer one might ease both.