December S&P 500 results (ESZ23) down -0.19%, and December Nasdaq 100 E-Mini futures (NQZ23) is down -0.18% this morning as market participants anticipated comments from Fed Chairman Jerome Powell and other Fed officials while also awaiting the release of the Fed’s favorite inflation gauge later in the week.
In Friday’s holiday-shortened trading session, Wall Street’s major averages closed mixed, with the blue chip Dow rising to a 3-1/2 month high. iRobot Corporation (IRBT) soared more than +39% after a report indicating that Amazon is progressing toward obtaining unconditional EU antitrust approval for its planned $1.4 billion acquisition of the company. Also, Vista Outdoor Inc (VSTO) climbed more than +3% after announcing that it had received an unsolicited cash-and-stock merger offer from Czech gunmaker Colt CZ Group. In addition, Fisker Inc (FSR) gained more than +5% after the company filed its late Q3 filing with the Securities and Exchange Commission and said it had made a strategic shift aimed at improving the pace of deliveries in the US and Europe. On the bearish side, NVIDIA Corporation (NVDA) fell nearly -2% 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.
Economic data on Friday showed that the US S&P Global manufacturing PMI fell to a 3-month low of 49.4 in November, weaker than expectations of 49.8. At the same time, the US November S&P Global services PMI unexpectedly crept up to a 4-month high of 50.8, stronger than expectations of 50.4.
“We’ve had mixed macroeconomic data, and the post-Thanksgiving holiday is only half a day, so there aren’t as many participants. But we see a market that is on the right track of a year-end rally,” said Peter Cardillo, chief market economist at Spartan Capital Securities.
US exchange rate futures are priced at a 96.8% chance of no hike at the next central bank meeting in December and an 88.8% chance of no hike at the January FOMC meeting. Also, US rates were priced in a 22.2% probability of a 25 basis point rate cut at the March meeting.
In the coming week, the October reading of the US core personal consumption expenditure price index, the Fed’s preferred inflation gauge, will be the main highlight. Also, market participants will be watching a host of economic data, including the US CB Consumer Confidence, S&P/CS HPI Composite – 20 nsa, Richmond Manufacturing Index, GDP (preliminary), GDP price index (preliminary), Wholesale Inventories (preliminary), Crude Oil Inventories, Initial Jobless Claims, Personal Income, Personal Spending, Pending Home Sales, S&P Global Manufacturing PMI, and ISM Manufacturing PMI.
Meanwhile, Federal Reserve Chairman Jerome Powell will participate in a fiery talk at Spelman College on Friday.
In addition, several other Fed officials will be presenting this week, including Goolsbee, Waller, Bowman, Mester and Williams.
In other news, sales revenue from online shopping on Black Friday reached a record high of $9.8 billion, reflecting a 7.5% increase compared to the previous year, according to a report from Adobe.
Today, all eyes are on US new home sales data in a few hours. Economists, on average, expect October New Home Sales to come in at 721K, compared to the previous reading of 759K.
Also, investors will likely focus on the US Building Permits data, which stood at 1.471M in September. Economists predict that the October figure will be 1.487M.
In the bond markets, US 10-year yields are at 4.481%, down -0.04%.
Euro Stoxx 50 futures are down -0.21% this morning as investors digested disappointing Chinese economic data and anticipated remarks from European Central Bank President Christine Lagarde on monetary policy. Losses in energy supplies drive the overall market lower. Meanwhile, ECB President Christine Lagarde is scheduled to address the Economic and Monetary Affairs Committee of the European Parliament later in the session, providing an assessment of the region’s monetary policy. In corporate news, Rightmove Plc (RMV.LN) climbed more than +5% after the UK’s largest property portal raised its forecast for annual average revenue per advertiser.
The European economic data is mostly empty on Monday.
Asian stock markets settled in the red today. China’s Shanghai Composite Index (SHCOMP) closed down -0.30%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.53%.
China’s Shanghai Composite closed lower today after the latest data raised concerns about deflation in the world’s second-largest economy. New energy, media and liquor stocks underperformed on Monday. Also, Hong Kong-listed mainland property developers fell after Beijing police launched an investigation into debt-laden Chinese shadow bank Zhongzhi Enterprise Group. Meanwhile, profits at China’s industrial companies rose at a significantly slower pace in October than the previous month as deflationary pressures persisted, highlighting the potential need for more policy support from Beijing to boost growth in the world’s second-largest economy. According to data released by the National Bureau of Statistics on Monday, industrial profits rose 2.7% in October from a year ago, down from September’s 11.9% gain. Investor attention is now firmly focused on the Chinese purchasing managers’ indexes for November, on Thursday.
Japan’s Nikkei 225 Stock Index closed lower today as investors cautiously anticipated another reading on US inflation, prompting them to sell stocks to preserve profits. Health care and consumer cyclical stocks led the declines on Monday, while financial stocks outperformed. Meanwhile, Bank of Japan Governor Kazuo Ueda stated on Monday that the central bank cannot claim with confidence at this time that inflation will sustainably and stably reach its 2% target. “We are seeing some positive signs in wages and inflation. But there is high uncertainty as to whether this cycle will intensify,” Ueda told parliament. In corporate news, Taisho Pharmaceutical climbed around +18% after being off-trade most of the day with a glut of buy orders following the drugmaker’s announcement of an executive buyout at 8,620 yen per share The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed +2.90% at 17.36.
“There were little signs of market movement in the US or Japan, and investors’ attention was on US PCE readings later in the week,” said Hirokazu Kabeya, chief strategist at Daiwa Securities.
Premarket US stock transferors
Crown Castle International Corp (CCI) rose more than +3% in pre-market trading following a report from the Wall Street Journal stating that activist investor Elliott Investment Management plans to engage with the company to try to boost its stock price after taking a more than $2 billion investment.
YPF Sociedad Anonima (YPF) climbed more than +3% in premarket trading after Goldman Sachs upgraded the stock to Neutral from Sell.
Shopify Inc (SHOP) gained more than +2% in premarket trading after the company said its dealers set a Black Friday record with a combined $4.1 billion in sales, representing a 22% increase over last year.
Roku Inc (ROCK) rose more than +1% in premarket trading after Cannonball Research upgraded the stock to Buy from Neutral.
PotlatchDeltic Corp (PCH) fell more than -2% in premarket trading after Raymond James downgraded the stock to Market Perform from Strong Buy.
Foot Locker Inc (FL) slipped more than -3% in premarket trading after Citi downgraded the stock to Sell from Neutral.
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Today’s US Earnings Spotlight: Monday – November 27th
Zscaler (ZS), Mueller Water Products (MWA), Up Fintech (TIGR), Cerence (CRNC), Anavex Life Sciences (AVXL), Procaps (PROC), Cango (CANG).
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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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