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Vistra Energy is one of the largest power producers and retail energy providers in the US Following the 2024 Energy Harbor acquisition, Vistra owns 41 gigawatts of nuclear, coal, natural gas, and solar power generation along with one of the largest utility-scale battery projects in the world. Its retail electricity business serves 5 million customers in 20 states, including almost a third of all Texas electricity consumers. Vistra emerged from the Energy Future Holdings bankruptcy as a stand-alone entity in 2016. It acquired Dynegy in 2018.

MGE Energy provides electric service to 161,000 customers and natural gas service to 173,000 customers in Madison, Wisconsin, and surrounding areas. Nearly 90% of customers are residential. The company also owns a 3.6% stake in American Transmission Co. MGE owns interests in two coal power plants that earn guaranteed fixed rates of return, contributing about 20% of earnings. MGE's generation mix is 40% coal, 21% renewable energy, 17% natural gas, and third-party purchased power.

Founded in 1886, American Water Works provides regulated and market-based drinking water, wastewater and other related services to over 14 million people in 24 states and is the largest publicly traded U.S. water and wastewater utility company. Regulated businesses provide services to commercial, industrial, residential and other customers, and represent the majority of revenue. Market-Based Businesses provide services to military bases and represent a small part of AWK. Based in Camden, New Jersey, the company employs about 6,500 people. The AWK shares are a component of the S&P 500.

Monday Tee Up: Nvidia and Walmart Two giants report earnings this week: Nvidia, providing a benchmark for the growth of AI, and Walmart, shining light on the health of the consumer. The economic calendar is light, though some stats will come in on housing. Meanwhile, Wall Street will continue to evaluate if the Fed is likely to cut interest rates further at their next (and final for 2024) policy meeting next month. Chairman Powell made comments last week suggesting that the Fed is in no hurry to act. The Dow Jones Industrial Average finished the week with a decline of 1.2%, the S&P 500 was lower by 2.1%, and the Nasdaq fell 3.2%. For the year, the Dow is higher by 15%, the S&P is up 23%, and the Nasdaq has popped 24%. The earnings calendar is packed again this week. On Tuesday, Walmart, Lowe's, Medtronic, Spotify, Tyson Foods, and AstraZeneca are among the companies that report. On Wednesday, Nvidia, Snowflake, Palo Alto Networks, Target, TJX, and William-Sonoma. On Thursday, Intuit, Warner Music, The Gap, BJ's, and Deere. So far, 460 of the S&P 500 companies have reported and earnings are coming in 8.8% higher than in the prior-year quarter. Communication Services, up 26%, and Technology, up 17%, are leading. Energy, down 26%, is underperforming. Based on our outlook for continued economic growth through 2025, we have raised our 2025 and 2026 forecasts for S&P 500 earnings from continuing operations. For 2025, we are raising our forecast to $276, from $265. Whereas our prior forecast assumed high-single-digit growth, our revised forecast models full-year EPS growth of 11.8%. For 2026, we are raising our forecast to $307 from a preliminary outlook in the $285 range. Whereas our prior forecast assumed high-single-digit growth, our revised forecast models full-year EPS growth of 11.2%. On the economic calendar, the National Association of Homebuilders Index for November will be released on Monday. Argus' Chief Economist Chris Graja, CFA, is watching the expectations component to see if builders remain optimistic about prospects for the next six months, even as Treasury and mortgage rates have risen. Chris says the traffic component may help us to see how prospective buyers are reacting to the jump in rates. On Tuesday, Housing Starts for October will be released, with a consensus expectation for a seasonally adjusted annual rate of 1.34 million. Argus' estimate is 1.29 million. This is an important indicator because it shows whether builders are confident in the economy, future housing conditions, and their ability to move inventory. Affordability remains a big challenge for many buyers. Inflation data from last week was hotter than expected. CPI printed at 2.6% for October, up from 2.4% in September. Core CPI was 3.3%, unchanged from September. Wholesale price indicator PPI also ticked higher. Mortgage rates stayed steady and are at 6.78% for the average 30-year fixed-rate mortgage. Gas prices fell two cents, to $3.10 per gallon for the average price of regular gas. The Atlanta Fed GDPNow indicator is forecasting for 3Q and calls for expansion of 2.5%. The Cleveland Fed CPINow indicator for November is at 2.71%. Looking ahead, the Federal Reserve will make its last interest-rate decision of the year on December 18. Odds are at 62% that there will be another 25 basis-point (bps) rate cut at that meeting (according to the CME FedWatch tool). We agree and also expect three more cuts in 2025, all by 25 bps.