December S&P 500 results (ESZ23) up +0.03%, and December Nasdaq 100 E-Mini futures (NQZ23) is down -0.11% this morning as US Treasury yields climbed after trading resumed after a holiday, while market participants braced for US trade data.
Today, the US stock market will be open for a half session, with trading ending at 1 pm ET.
In Wednesday’s trading session, the benchmark S&P 500 rose to a 3-1/2 month high, the blue-chip Dow climbed to a 3-1/4 month high, and the tech-heavy Nasdaq 100 notched 1-3/4. a year old eBay Inc (EBAY) gained more than +3% following an offer by an investment group led by Permira and Blackstone to acquire Adevinta ASA for approximately USD 15 billion. EBay Inc., which is one of Adevinta’s largest shareholders, has agreed to sell half of its stake in the company for about $2.2 billion in cash and plans to exchange the remaining shares for a 20% ownership interest in the newly privatized company. Also, Microsoft Corporation (MSFT) rose more than +1% following OpenAI’s announcement of the return of Sam Altman and an overhaul of the board with new directors. On the bearish side, Deere & Company (OF) fell more than -3% after the agricultural machinery giant provided a below-consensus FY24 net income forecast. Also, NVIDIA Corporation (NVDA) slipped more than -2% after the semiconductor giant reported upbeat Q3 results and provided Q4 earnings guidance that topped analysts’ average estimates but failed to meet the high expectations of shareholders who had bet heavily on an artificial intelligence boom.
The Labor Department report on Wednesday showed that claims for state jobless benefits unexpectedly fell -24K to a 5-week low of 209K last week, stronger than expectations of 225K. Also, the reading of consumer sentiment from the University of Michigan in November was revised up to 61.3, stronger than expectations of 60.4. In addition, the University of Michigan’s November forward inflation expectations reached 4.5%, stronger than expectations of 4.4%, while 5-year inflation expectations remained unchanged at 3.2% in November. Meanwhile, US durable goods orders came in at -5.4% m/m in October, weaker than expectations of -3.1% m/m.
“For a data-dependent Fed, this is not good news because they don’t want to see consumer inflation expectations unanchored, as historically it has become increasingly difficult to reset consumer psychology to a lower inflation environment,” said Quincy Krosby, chief global strategist. for LPL Financial.
Meanwhile, US rates were priced in a 99.5% chance of no hike at the next central bank meeting in December and a 93.3% chance of no hike at the conclusion of the Fed’s January meeting. Also, US rates were priced in a 24.6% probability of a 25 basis point rate cut at the March FOMC meeting.
In the economic data, all eyes are focused on the preliminary reading of the US S&P Global Manufacturing PMI in a few hours. Economists, on average, expect the November manufacturing PMI to stand at 49.8, compared to the previous value of 50.0.
The US S&P Global Services PMI preliminary reading will also be closely watched today. Economists expect this figure to come in at 50.4 in November, compared to 50.6 in October.
In the bond markets, US 10-year yields are at 4.481%, up +1.46%.
The Euro Stoxx 50 futures are +0.11% this morning, holding on to a modest weekly gain. Mining and technology stocks underperformed on Friday, while chemical stocks gained ground. The statistics office reported Friday that the German economy contracted slightly in the third quarter compared to the previous three months, confirming an initial reading. Meanwhile, minutes from the European Central Bank’s October policy meeting released on Thursday indicated that Eurozone inflation is falling as expected, or perhaps even at a slightly faster pace, while suggesting that policymakers should keep the possibility of an interest rate hike on the a table Eurozone government bond yields continued to rise on Friday in response to a report on Thursday indicating that Germany plans to suspend debt limits for a fourth consecutive year, raising concerns about increased borrowing. In corporate news, Basf Se (BAS.D.DX) rose more than +1% after a Bloomberg News report that Abu Dhabi National Oil Co. is considering an acquisition of its Wintershall Dea unit.
ECB President Christine Lagarde said on Friday that the central bank has reached a point where it can pause and assess the impact of its tightening. “We have already done a lot,” Lagarde said.
Germany’s GDP, Germany’s Ifo Business Climate Index, Germany’s Business Expectations and Germany’s Current Assessment Data were released today.
German GDP was reported at -0.1% q/q and -0.4% y/y in the third quarter, compared to expectations of -0.1% q/q and -0.3% y/y.
The German November Ifo Business Climate Index arrived at 87.3, weaker than expectations of 87.5.
The German November Business Expectations stood at 85.2, weaker than expectations of 85.7.
The German November Current Rating came in at 89.4, weaker than expectations of 89.5.
Asian stock markets closed mixed today. China’s Shanghai Composite Index (SHCOMP) closed down -0.68%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.52%.
China’s Shanghai Composite closed lower today as investors turned cautious on concerns about the country’s slow economic recovery, while strong foreign outflows also weighed on sentiment. Artificial intelligence, new energy and semiconductor stocks were lower on Friday. Foreign investors unloaded a net total of 6.2 billion yuan ($859.79 million) in Chinese stocks via Stock Connect on Friday, marking the biggest daily outflow in more than a month. Meanwhile, Hong Kong-listed properties retreated after jumping on Thursday on the back of a Bloomberg News report suggesting China may allow banks to provide unsecured short-term loans to qualified builders for the first time, marking the latest effort to address a downturn in the housing market. Tech giants listed in Hong Kong also fell. Investor attention is now squarely on the upcoming release of the PMI data from China next week.
Japan’s Nikkei 225 Stock Index closed higher in catch-up trade after a national holiday, as a weaker yen boosted export-oriented stocks. Export-heavy auto stocks gained ground on Friday, with Mazda Motor Corp climbing nearly +3%, Isuzu Motors Ltd gaining about +2%, and Toyota Motor Corp rising over +2%. Meanwhile, government data showed on Friday that Japan’s core consumer inflation edged up slightly in October after easing the previous month, bolstering investors’ belief that persistent inflation could prompt the Bank of Japan to scale back monetary stimulus soon. Separately, a business survey showed on Friday that Japan’s manufacturing activity contracted for a sixth straight month in November, while modest growth in the service sector was little changed. In other news, Japanese stocks witnessed massive foreign inflows as the week ended november 17th. Data from Japanese exchanges revealed that foreign investors acquired a net total of 1.03 trillion yen ($6.88 billion) worth of stocks last week. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed -2.88% to 16.87.
Japan’s October National Core CPI came in at +2.9% y/y, weaker than expectations of +3.0% y/y.
Japan’s November Manufacturing PMI stood at 48.1, weaker than expectations of 48.8.
Premarket US stock transferors
iRobot Corporation (IRBT) rose about +33% in pre-market trading after a report indicating that Amazon is moving toward obtaining unconditional approval from the EU for its planned $1.4 billion acquisition of the company.
NVIDIA Corporation (NVDA) fell more than -2% in premarket trading after a Reuters report stated that the company had informed its customers in China of the delay in the launch of a new artificial intelligence chip designed to meet US export regulations until the first quarter of next year. .
Fisker Inc (FSR) climbed more than +6% in pre-market trading after effectively submitting its quarterly report, demonstrating compliance with the requirements of the NYSE-listed company.
Gaotu Techedu Inc (GOTTA) slipped over -2% in premarket trading after the company reported its Q3 results. Also, China Renaissance downgraded the stock to Hold from Buy.
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Today’s US Earnings Note: Friday – November 24th
Huazhu (HTHT), Natuzzi (NTZ), Jianpu Tech (JT).
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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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