CWS Market Review – November 18, 2025

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The stock market fell again on Tuesday. This was the S&P 500’s fourth drop in a row. Wall Street is clearly getting nervous. Yesterday, for the first time since April, the index fell below its 50-day moving average, and it happened again today. The Dow lost 500 points today and the Nasdaq fell by 1.2%.

November has not been friendly to investors. So far this month, we’ve had four daily drops of more than 1%. In the three months prior to that, it happened only once. The S&P 500 has closed higher for the last six months in a row, but that streak looks to be in serious jeopardy. In four days, the S&P 500 has lost 3.4%.

Today it was tech stocks that were down the most. The S&P 500 Tech Sector was off by 1.68% today. That’s becoming a theme. Tech stocks and High Beta stocks in general have lagged the market over the last two weeks.

Anything risky has not done well. Bitcoin briefly dropped below $90,000 for the first time since April. I’m leery of calling this the start of a rotation. We need the trend to last a lot longer before we can say that. If we’re in an AI bubble, then this has to be one of the most expected bubbles in history. One thing history teaches us is that bubbles can go on longer than you think. It’s hard to stay rational when no one around you is.

All of Wall Street is waiting for Nvidia (NVDA) to report its earnings after tomorrow’s close. It’s hard to overstate how important this earnings report is to traders. Nvidia has a market value of roughly $4.5 trillion, and it used to be even higher.

Wall Street expects earnings of $1.25 per share. That’s compared with 81 cents per share for the same quarter one year ago. Whether it beats or not, get ready for some volatility. Going by the options market, traders see shares of NVDA closing up or down, by an average of 7%. That’s over $300 billion. Again, that’s only the average, it could be a lot more.

Over the last 10 years, Nvidia is up more than 6,000%. Despite being Wall Street’s darling, shares of Nvidia have largely performed as well as the market for the last four months. You have to wonder if a small leak can quickly turn into a big panic.

Since all those government economic reports were on hold, we’ve had to rely on other sources for getting a look at how well the economy is doing. We got another pseudo government report today which was Home Depot’s (HD) earnings report. In my opinion, HD’s earnings report is probably a better indicator of what’s really going on in the U.S. economy. It’s usually optimistic consumers that decide to do things like add a new deck.

Home Depot (in black) hasn’t performed very well against the S&P 500 (blue) for the last few years.

This morning, HD said that it missed earnings. Its Q3 earnings fell from $3.65 billion one year ago to $3.6 billion this year. The company also lowered its full-year guidance. Home Depot’s CFO said, “Our customers tell us that they remain on the sidelines due to uncertainty and perhaps the hesitation to make larger financial commitments amid an uncertain economic environment.”

For Q3, Home Depot’s comparable sales rose 0.2%. That was below Wall Street’s forecast for 1.3%. The damage isn’t that bad, but it soon could be much worse. This is an area of the market to keep an eye on.

The Russell 2000 had an unusually strong day today. The index closed higher by 0.4%. I think the Russell is a misunderstood index. It really doesn’t say much about small-cap stocks. Instead, the index is weighted heavily toward domestic manufacturing stocks.

The Federal Reserve meets three weeks from tomorrow, and the outlook for another rate cut is in doubt. Not that long ago, Wall Street assumed the Fed was on its side and that it would slash rates again. Maybe not. In the futures pits, the odds are almost exactly 50-50 on the chance for a December rate cut.

Yesterday, Federal Reserve Governor Christopher Waller said he supports another rate cut, and he could be in the majority. This next Fed meeting could test Jerome Powell’s leadership. Normally, most FOMC voters go along with the Fed chair, or there are one or two dissents. This next meeting may be different.

President Trump hasn’t exactly been shy about his feelings about Jerome Powell. Today the president said, “I’d love to get the guy currently in there out right now, but people are holding me back.” He’ll soon get his wish when Powell’s term expires in May.

To complicate matters, there may be a growing crisis in the world of private credit. A firm called Blue Owl limited redemptions from one of its funds. Earlier this month, Blue Owl said it will merge its traded fund with its non-traded fund, but investors in the non-traded fund won’t be to redeem their funds until the merger is completed. That may not happen until next year. Any problems in this sector of the market could easily be soothed with lower rates from the Fed.

Earnings Preview for IES Industries

This Friday, we’re going to get the latest earnings report from IES Industries (IESC). The report is due out before the market opens.

The stock has been a big winner for us this year. So far, the stock is up more than 80% YTD. Despite its strong performance, the company isn’t well-known. In fact, only one analyst on Wall Street follows the stock.

In this week’s issue, I wanted to describe who they are and what they do.

The company’s Executive Chairman is Jeffry Gendell who used to be CEO as well, but he relinquished that role earlier this year. Gendell was also the founder of Tontine Associates, which is a private investment management firm. The new CEO is Matt Simmes.

IESC currently has a market value of $7.2 billion and about 9,400 employees. The company currently operates through four business segments: Electrical, Communications, Infrastructure and Residential.

IES Electrical is an electrical contractor that provides design, build and maintenance services. The division offers service capabilities including constant presence, critical plant shutdown, troubleshooting, emergency service, testing, and preventive maintenance.

IES Communications provides the highest level of design, build and maintenance services for technology and communication systems.

IES Infrastructure provides electrical and mechanical apparatus services, custom steel fabrication and custom power solutions, including generator enclosures and bus systems.

IES Residential is one of the nation’s leading electrical, mechanical and plumbing contractors for both single family homes and multi-family apartment complexes.

IESC has also become known for its data centers which have become valuable thanks to the growth of AI. The company describes itself as “skilled and certified in designing, building and maintaining the critical technology and electrical systems in a data center.”

During Q3, IESC bought back 33,900 shares of stock for $5.3 million. The company has $168.0 million left in its repurchase authorization.

The sole analyst who follows IESC expects Q4 earnings of $3.11 per share. Since that’s the only forecast, I really don’t consider that to be Wall Street’s “consensus.” For last year’s Q4, IESC made $2.79 per share. Assuming 18% earnings growth would give them an estimate of $3.29 per share.

That’s all for now. The government’s econ reports may be out soon. Until then, several Fed officials will be speaking this week. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

Posted by on November 18th, 2025 at 8:43 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.