What you need to know…
The S&P 500 Index ($SPX) (SPY) on Friday closed +0.06%, the Dow Jones Industrials Index ($DOWI) (DIA) closed +0.33%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up. -0.12%
Stocks settled mixed in a holiday-shortened session on Friday, with the Dow Jones Industrials climbing to a 3-1/2 month high. Friday’s US economic news was mixed for stocks after S&P reported that US manufacturing activity in November contracted more than expected, but services activity in November expanded more than expected.
A jump in bond yields on Friday capped the upside in stocks. The 10-year T-note yield rose to a 1-week high on Friday on negative carry from a rise in the 10-year German bund yield to a 1-1/2-week high on reports that Germany will suspend a constitutional limit on net. new borrowing for a fourth consecutive year, which may strengthen supply pressures.
On the positive side, US stock index futures had carryover support from Friday’s rally in the Euro Stoxx 50 to a 3-1/2-month high after ECB President Lagarde said ECB policymakers were able to pause their tight campaign.
The US New S&P manufacturing PMI fell -0.6 to 49.4, weaker than expectations of 49.9. However, the New S&P services PMI unexpectedly rose +0.2 to a 4-month high of 50.8, stronger than expectations of a decline to 50.3.
Bank of America said EPFR Global data showed global equity funds saw inflows of about $49 billion in the two weeks to Nov. 21, the most in 1-3/4 years.
According to data from the Investment Company Institute, about $29.1 billion flowed into US money market funds in the week to November 21. Total assets in money market funds increased to a record $5.763 billion from $5.734 billion in the previous week.
The markets are discounting a 5% chance for a +25 bp rate at the next FOMC meeting on December 12-13 FOMC and a 13% chance for that +25 bp rate at the next FOMC meeting on December 30-31 on January 2024. The markets are then discounting a 23% chance for a -25 bp rate cut at the March 19-20, 2024, FOMC meeting and a 52% chance for that same -25 bp rate cut reduction at April 30-May 1, 2024. , FOMC meeting.
US and European government bond yields are higher today. The 10-year T-note yield rose to a 1-week high of 4.490% and ended up +6.3 bp at 4.467%. The 10-year German bund yield rose to a 1-1/2-week high of 2.663% and ended +2.5 bp at 2.643%. The 10-year UK yield rose to a 1-1/2 week high of 4.323% and ended +2.6bp at 4.283%.
ECB President Lagarde said, “We have already done a lot on rates,” and the ECB is now at a point where it can pause and assess the impact of its policy tightening.
Japan New national CPI rose +3.3% y/y, weaker than expectations of +3.4% y/y. New national CPI ex-fresh food and energy decreased to +4.0% y/y from +4.2% y/y in October, weaker than expectations of +4.1% y/y and the slowest rate of increase in 7 months.
Japan’s New Jibun Bank manufacturing PMI fell -0.6 to 48.1, the steepest rate of contraction in 9 months.
Foreign stock markets settled mixed on Friday. The Euro Stoxx 50 closed up +0.25%. China’s Shanghai Composite Index closed down -0.68%. Japan’s Nikkei Stock Index closed +0.52%.
Today’s stock movers…
iRobot (IRBT) closed up more than +39% after Reuters reported that Amazon.com is poised to win unconditional EU antitrust approval for its acquisition of the company.
Visa Outdoor (VSTO) closed up more than +3% after the company received an unsolicited offer from Colt CZ.
Eli Lilly ( LLY ) closed up more than +1% after data compiled by Symphony Health Solutions showed that U.S. retail sales of branded drugs used for psoriasis and psoriatic arthritis rose 4.4% in the week ended Nov. 17 , with Eli Lilly’s Taltz drug sales up +4.6%.
Cryptocurrency-related stocks rallied on Friday as the price of Bitcoin climbed more than +1% to a 5-1/2 month high. As a result, CleanSpark (CLSK) closed up more than +14%, and Coinbase Global (COIN) closed up more than +5%. Also, Marathon Digital (MARA) closed up +4%, and Riot Platforms (RIOT) up +3%. In addition, MicroStrategy (MSTR) closed up more than +2%.
Nvidia (NVDA) closed down more than -1% to lead losers on the Nasdaq 100 after Reuters reported that the company told customers in China that it is delaying the launch of a new artificial intelligence chip in Q1 of next year.
Apple (AAPL) closed down -0.7% to lead losers in the Dow Jones Industrials after Counterpoint Research data showed iPhone sales in China fell 4% y/y from Oct. 30 to Oct. 12. november
Palantir (PLTR) closed down more than -2% on signs of insider selling after an SEC filing showed chairman and co-founder Cohen sold $7.11 million worth of stock on Monday and Tuesday.
LyondellBasell (LYB) closed down -0.87% on signs of insider selling after an SEC filing showed that EVP and General Counsel Kaplan sold $1.54 million worth of stock on Monday.
Through the markets…
December 10-year T-notes (ZNZ23) closed down -13.5 ticks on Friday, and the 10-year T-note yield rose +6.3 bp to 4.467%. December T-note prices on Friday posted moderate losses and fell to a 1-week low, and the 10-year T-note yield rose to a 1-week high of 4.490% in a holiday-shortened session. T-notes retreated on negative transmission of a decline in 10-year German bonds to a 1-1/2 week low on reports that Germany will suspend a constitutional limit on net new borrowing for a fourth straight year, adding to concerns that more borrowing. will accelerate deficits and supply pressures. T-bills recovered from their worst levels after Friday’s news showed that the US New S&P manufacturing PMI fell more than expected, a dovish factor for Fed policy.
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As of the date of publication, Rich Asplund 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.