Wednesday's big stock stories: What’s likely to move the market in the next trading session

The White House is reportedly negotiating a deal with Eli Lilly and Novo Nordisk for obesity drugs under Medicare/Medicaid, boosting Eli Lilly shares while Novo Nordisk declined. Mall REITs like Simon Property Group posted solid results, contrasting with significant drops in payroll software stocks Paycom and Paychex. Commodities, including copper, gold, and silver, along with Bitcoin, experienced notable declines. Harley-Davidson's stock fell on lower sales and tariff uncertainty despite better-than-expected earnings, a challenge also anticipated for EV maker Lucid Group ahead of its earnings report.

Analysis

The White House is reportedly negotiating a deal to include Eli Lilly (LLY) and Novo Nordisk's (NVO) obesity drugs under Medicare and Medicaid, a development that has significantly boosted Eli Lilly's shares by 5.1% in two days and 10.6% in a week. Conversely, Novo Nordisk's stock has seen a decline of 2.5% in two days and 19% over the past month, suggesting potential competitive shifts or market concerns regarding the specifics of the proposed deal. This regulatory expansion could unlock substantial new market access for the approved drugs.

Mall REITs, including Simon Property Group (SPG), demonstrated resilience, with SPG reporting a solid quarter and its stock up 3.4% on Tuesday, now 4% from its March high. In stark contrast, the employment payment and HR software sector faced significant headwinds, as Paycom Software (PAYC) and Paychex (PAYX) experienced sharp declines of 32% and 29% respectively since June, both hitting multi-month lows.

Commodities markets exhibited broad weakness, with copper hitting a three-week low, down 8%, and gold experiencing a similar decline. Silver saw a steeper drop of 12% since mid-October, impacting the VanEck Gold Miners ETF (GDX), which fell 11.4% in a month. Cryptocurrencies also faced a significant correction, with Bitcoin down 17% in a month and related stocks like Coinbase (COIN) and Cleanspark (CLSK) declining 32% and 31% respectively.

Tariffs continue to exert pressure on manufacturers, as evidenced by Harley-Davidson (HOG) reporting a $27 million tariff charge this quarter, up from $13 million previously, leading to a stock decline despite better-than-expected earnings. The company withheld its 2025 financial outlook due to ongoing tariff uncertainty. Similarly, EV maker Lucid Group (LCID) reported a $54 million tariff impact on its profit margin last quarter, with its stock 55% off its 52-week high, highlighting persistent industry-wide tariff risks.

Key Decisions for Investors

• Investors should closely monitor the White House's negotiations regarding obesity drug coverage for Eli Lilly and Novo Nordisk, as regulatory outcomes will significantly impact future revenue streams and competitive landscape.
• Evaluate the sustained performance of mall REITs like Simon Property Group for potential defensive characteristics or continued recovery, contrasting with the sharp downturns in payroll software companies.
• Consider the broader market implications of widespread declines in commodities and cryptocurrencies, assessing if these are short-term corrections or indicators of systemic risk.
• Factor in persistent tariff impacts on manufacturing and EV sectors, exemplified by Harley-Davidson and Lucid Group, which continue to pressure profit margins and create forward guidance uncertainty.