December S&P 500 results (ESZ23) trending +0.31% this morning as market participants prepared for a slew of US economic data while also awaiting earnings results from prominent cloud sector players Salesforce and Snowflake.
In Tuesday’s trading session, Wall Street’s main indexes closed in the green. PDD Holdings Inc (PDD) rose more than +18% after the company reported upbeat Q3 results. Also, Boeing Co (B.A) gained more than +1% after RBC Capital Markets upgraded the stock to Outperform from Sector Perform with a price target of $275. On the bearish side, Micron Technology Inc (MU) fell more than -1% after the largest US maker of computer memory semiconductors increased its outlook for operating expenses adjusted from Q1. In addition, Morgan Stanley (MS) fell more than -1% after Societe Generale downgraded the stock to Hold from Buy.
Economic data on Tuesday showed that the US CB index of consumers stood at 102.0 in November, stronger than expectations of 101.0. Also, the US S&P / CS HPI composite – 20 nsa came in at +3.9% y/y in September, weaker than expectations of +4.0% y/y.
Fed Governor Christopher Waller said Tuesday that he is “increasingly confident” that monetary policy is currently well-positioned to slow the economy and return inflation to the 2% target. “Inflation rates are moving pretty much as I thought. If progress continues for several more months … three months, four months, five months … we could start lowering the policy rate just because inflation is lower,” Waller said. Also, Chicago Fed President Austan Goolsbee stated that he believed overall inflation was declining at a rate not seen since the 1950s. At the same time, Fed Governor Michelle Bowman suggested that the central bank will likely need to raise borrowing costs to bring inflation down to its 2% target.
“The (Fed’s) mixed messaging is pretty normal, and it happens every time the Fed is near the end of a cycle, because some members of the FOMC and some Fed governors will feel more strongly than others that it’s time to stop,” said Oliver Pursche, senior vice president at Wealthspire Advisors.
Meanwhile, US rates were priced in a 98.9% chance of no hike at the December meeting and a 96.8% chance of no hike at the January meeting. Also, US rates were priced in a 40.6% probability of a 25 basis point rate cut at the March FOMC meeting.
On the earnings front, famous companies like Salesforce Inc (CRM), Snowflake (SNOW), and Dollar Tree (DLTR) are set to report their quarterly figures today.
In the economic data, investors are likely to focus on the Commerce Department’s second estimate of gross domestic product (GDP), due later in the day. Economists, on average, predict that US GDP will stand at +4.9% q/q in the third quarter, compared to the second-quarter value of +2.1% q/q.
US GDP price index will also be closely watched today. Economists predict that this figure will stand at +3.5% q/q in the third quarter, compared to the second quarter figure of +1.7% q/q.
Advance US Wholesale Inventories data is due today. Economists expect the October figure to be +0.1% m/m, compared to the previous figure of +0.2% m/m.
The US crude oil inventories data will also be reported today. Economists estimate this figure -0.933M, compared to last week’s value of +8.701M.
In the bond markets, US 10-year yields are at 4.291%, down -1.03%.
Euro Stoxx 50 futures are up +0.64% this morning as investors digested the latest remarks from Federal Reserve officials as well as regional economic data while also preparing for the release of Eurozone inflation numbers later in the week. Gains in real estate and auto stocks are driving the overall market higher. Meanwhile, the 10-year German bund yield fell to a level not seen in more than three months after data indicated a slowdown in inflation in the German state of North Rhine-Westphalia. In corporate news, Siltronic Ag (WAF.D.DX) climbed more than +7% after Berenberg upgraded the German chip supplier to Buy from Hold.
Spain’s CPI (preliminary) and Eurozone Consumer Confidence data were released today.
The Spanish November CPI was reported at -0.4% m/m and + 3.2% y/y, weaker than expectations of + 0.1% m/m and + 3.7% y/y.
November’s Eurozone Consumer Confidence stood at -16.9, in line with expectations.
Asian stock markets settled in the red today. China’s Shanghai Composite Index (SHCOMP) closed down -0.56%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.26%.
China’s Shanghai Composite closed lower today as Meituan’s cautious fourth-quarter guidance raised concerns among investors about the outlook for the recovery in consumer spending. Meituan plunged more than -12% after the food delivery giant warned that growth in its core food delivery business would slow in the fourth quarter, along with an increase in promotional spending. Meanwhile, analysts do not foresee a quick turnaround in the property market in 2024 despite increased political support. “Homebuyer sentiment remains subdued amid an uncertain employment and income outlook,” Fitch Ratings said in a report on Wednesday. Because of this, Hong Kong-listed mainland developers fell. Investors’ attention is currently focused on the upcoming release of the Chinese purchasing managers’ index for November, scheduled for Thursday.
Japan’s Nikkei 225 Stock Index closed lower today as investors continued to lock in profits after last week’s rally. Financial stocks led the declines on Wednesday, with Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group falling over -2%. Meanwhile, the yield on Japanese 10-year government bonds fell to the lowest level in nearly three months on Wednesday after the decline in US Treasury yields spurred by dovish comments from Fed Governor Christopher Waller. In other news, Bank of Japan governor Seiji Adachi said Wednesday that while risks to Japan’s inflation were tilted to the upside, it was too early to start discussions on ending the central bank’s negative interest rate policy. “It is appropriate to patiently continue monetary easing at this point,” Adachi said. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed +5.70% to 17.05.
Premarket US stock transferors
NetApp Inc (NTAP) soared over +12% in premarket trading after the data infrastructure company reported upbeat Q2 results and boosted its FY24 forecast.
Workday Inc (WDAY) climbed more than +8% in premarket trading after the back-office software provider posted better-than-expected Q3 results and raised its full-year subscription revenue guidance.
Leslies Inc (LESL) fell more than -14% in premarket trading after the company reported mixed Q4 results and issued below-consensus FY24 guidance.
Las Vegas Sands Corp (LVS) fell more than -5% in premarket trading after announcing a proposed secondary public offering of $2 billion of shares held by top shareholder Miriam Adelson.
Jabil Circuit Inc (JBL) slipped over -5% in premarket trading after the company lowered its Q1 revenue guidance.
Airbnb Inc (ABNB) fell about -1% in premarket trading after Jefferies downgraded the stock to Hold from Buy.
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Today’s US Earnings Spotlight: Wednesday – November 29th
Salesforce Inc (CRM), Synopsys (SNPS), Snowflake (SNOW), Dollar Tree (DLTR), Hormel Foods (HRL), Okta (OKTA), Nutanix (NTNX), Donaldson (DCI), Bilibili (BILI), PVH ( PVH), Ncino (NCNO), Arrowhead Pharma (ARWR), Patterson (PDCO), Credo Technology Holding (CRDO), Construction Partners (WAY), Foot Locker (FL), Vestis (VSTS), Victoria’s Secret Co (VSCO), La-Z-Boy (LZB), Petco Health and Wellness (WOOF), Noah (NOAH), Farfetch A (FTCH), Zhihu (ZH).
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As of the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. For more information, please see Barchart’s Disclosure Policy here.
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