December S&P 500 futures (ESZ23) are trending up +0.32% this morning as market participants remained in a buoyant mood after dovish signals from the Federal Reserve while also looking ahead to the release of U.S. business activity data.
In Thursday’s trading session, Wall Street’s major indices closed mixed. Align Technology Inc (ALGN) soared over +11% following the company’s announcement that Health Canada issued an updated medical device license for its Invisalign Palatal Expander System. Also, Moderna Inc (MRNA) climbed more than +9% after its mRNA-based skin cancer therapy, combined with Merck’s Keytruda, demonstrated strong survival rates in melanoma patients after about three years. On the bearish side, Adobe Systems Incorporated (ADBE) tumbled over -6% after the Photoshop maker provided weaker-than-expected FY24 guidance and disclosed an ongoing U.S. government investigation into its cancellation rules for software subscriptions. In addition, Cardinal Health Inc (CAH) slid about -5% after Wells Fargo initiated coverage of the stock with an Underweight rating.
Economic data on Thursday showed that U.S. November retail sales unexpectedly rose +0.3% m/m, stronger than expectations of -0.1% m/m. Also, U.S. core retail sales increased +0.2% m/m in November compared to a consensus for a fall of -0.1% m/m. In addition, the number of Americans filing for jobless claims the past week unexpectedly fell -19K to an 8-week low of 202K, stronger than expectations of 220K.
“In the wake of the Fed announcement and a growing sense of a pivot in monetary policy, financial markets were prepared to accept a soft print for retail sales. What they got instead was another better-than-expected outturn for November, which is the first of the two critical holiday shopping months,” Wells Fargo’s Tim Quinlan said.
Meanwhile, U.S. rate futures have priced in a 14.5% probability of a 25 basis point rate cut at the January FOMC meeting and a 68.5% chance of a 25 basis point rate cut at the March FOMC meeting.
Today, all eyes are focused on the U.S. S&P Global Manufacturing PMI preliminary reading in a couple of hours. Economists, on average, forecast that the December manufacturing PMI will stand at 49.3, compared to the previous value of 49.4.
Also, investors will likely focus on the U.S. NY Empire State Manufacturing Index, which came in at 9.10 in November. Economists foresee the December figure to be 2.00.
U.S. Industrial Production data will come in today. Economists expect November’s figure to be +0.3% m/m, compared to the previous number of -0.6% m/m.
The U.S. S&P Global Services PMI preliminary reading will also be closely watched today. Economists foresee this figure to come in at 50.6 in December, compared to 50.8 in November.
U.S. Manufacturing Production data will be reported today as well. Economists forecast this figure to stand at +0.4% m/m in November, compared to the previous number of -0.7% m/m.
In the bond markets, United States 10-year rates are at 3.912%, down -0.44%.
The Euro Stoxx 50 futures are up +0.41% this morning, on course for a fifth week of gains. Gains in energy and mining stocks are leading the overall market higher. A preliminary survey showed on Friday that the contraction in Eurozone business activity unexpectedly deepened in December. Meanwhile, the European Central Bank and Bank of England kept interest rates unchanged on Thursday. However, ECB President Christine Lagarde signaled that speculations about imminent rate cuts might be premature. Also, BOE Governor Andrew Bailey said that “there is still some way to go” in the fight against inflation. ECB Governing Council member Madis Muller said Friday that markets are overly optimistic in anticipating the ECB’s commencement of interest rate cuts in the first half of next year. In corporate news, Sectra Ab (SECTB.S.DX) climbed more than +16% after the Swedish technology firm posted better-than-expected Q2 results.
France’s CPI, France’s Manufacturing PMI (preliminary), France’s Services PMI (preliminary), Germany’s Manufacturing PMI (preliminary), Germany’s Services PMI (preliminary), Italy’s CPI, Eurozone’s Manufacturing PMI (preliminary), Eurozone’s Composite PMI (preliminary), Eurozone’s Services PMI (preliminary), U.K.’s Manufacturing PMI (preliminary), and U.K.’s Services PMI (preliminary) data were released today.
The French November CPI has been reported at -0.2% m/m and +3.5% y/y, compared to expectations of -0.2% m/m and +3.4% y/y.
The French December Manufacturing PMI stood at 42.0, weaker than expectations of 43.3.
The French December Services PMI arrived at 44.3, weaker than expectations of 46.0.
The German December Manufacturing PMI came in at 43.1, weaker than expectations of 43.2.
The German December Services PMI was at 48.4, weaker than expectations of 49.8.
The Italian November CPI has been reported at -0.5% m/m and +0.7% y/y, weaker than expectations of -0.4% m/m and +0.8% y/y.
Eurozone December Composite PMI arrived at 47.0, weaker than expectations of 48.0.
Eurozone December Manufacturing PMI stood at 44.2, weaker than expectations of 44.6.
Eurozone December Services PMI was at 48.1, weaker than expectations of 49.0.
U.K. December Manufacturing PMI came in at 46.4, weaker than expectations of 47.5.
U.K. December Services PMI stood at 52.7, stronger than expectations of 51.0.
Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.56% and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.87%.
China’s Shanghai Composite closed lower today after the latest data affirmed a patchy economic recovery, underscoring the necessity for more stimulus measures. Data on Friday showed that China’s industrial production growth exceeded expectations in November, but retail sales rose slower than the market expected, and a contraction in property investment deepened. Also, the People’s Bank of China kept its key policy rates unchanged on Friday while injecting a record amount of liquidity into the market through one-year policy loans to bolster an economy grappling with a property market crisis and subdued demand. Meanwhile, mainland developers listed in Hong Kong climbed on Friday after Chinese authorities relaxed home-buying curbs in Beijing and Shanghai, which included a reduction in the down payment ratio for first and second homes. As a result, Agile Group Holdings Ltd surged over +8%, while CIFI Holdings and Longfor Group Holdings Ltd rose about +6%. Hong Kong-listed tech giants also gained ground on Friday.
“We continue to expect more housing easing measures in coming months, including more relaxation of home purchase restrictions in large cities, among others,” Goldman Sachs said in a note.
The Chinese November Industrial Production stood at +6.6% y/y, stronger than expectations of +5.6% y/y.
The Chinese November Retail Sales came in at +10.1% y/y, weaker than expectations of +12.5% y/y.
The Chinese November Fixed Asset Investment arrived at +2.9% y/y, weaker than expectations of +3.0% y/y.
The Chinese November Unemployment Rate was at 5.0%, in line with expectations.
Japan’s Nikkei 225 Stock Index closed higher today. Export-heavy automobile stocks gained ground on Friday as the yen pulled back from a 4-1/2-month high, with Toyota Motor Corp rising over +1% and Nissan Motor Co Ltd advancing more than +2%. Also, chip-related stocks tracked U.S. peers higher, with chip-testing machinery maker Advantest soaring over +3%. A business survey revealed on Friday that Japan’s manufacturing activity contracted for the seventh consecutive month in December, while the service sector experienced modest gains. Meanwhile, Japan’s 10-year government bond yield rose on Friday as investors maintained caution regarding the outcome of the Bank of Japan’s policy meeting next week. The BOJ is anticipated to leave policy unchanged on Tuesday, but there is increasing speculation that policymakers might signal an impending conclusion to the negative interest rate policy. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -3.72% to 17.34.
The Japanese December au Jibun Bank Japan Manufacturing PMI stood at 47.7, weaker than expectations of 48.2.
Pre-Market U.S. Stock Movers
Costco Wholesale Corp (COST) rose over +1% in pre-market trading after the company topped Q1 profit estimates and announced a special cash dividend of $15 per share.
Lennar Corporation (LEN) fell more than -3% in pre-market trading despite the homebuilder reporting stronger-than-expected Q4 results.
Box Inc (BOX) gained over +1% in pre-market trading after UBS initiated coverage of the stock with a Buy rating.
Aadi Bioscience Inc (AADI) plummeted about -44% in pre-market trading following disappointing results from a registrational study for its anti-tumor drug candidate nab-sirolimus.
Scholastic Corporation (SCHL) plunged more than -12% in pre-market trading after the company reported downbeat Q2 results and slashed its FY24 revenue and adjusted EBITDA guidance.
Chewy Inc (CHWY) climbed more than +2% in pre-market trading following the disclosure by the company’s director, James A Star, of the purchase of an aggregate of 15,353 shares priced at $19.6048 apiece, totaling around $300K.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Friday - December 15th
Darden Restaurants (DRI), Red Cat Holdings (RCAT).
More Stock Market News from Barchart
- Broader Market Settles Higher on Fed’s Dovish Pivot
- Hidden Profits: The Surprising Power Of Corporate Breakups
- 3 Buy-Rated Dividend Stocks Under $10
- 1 EV Stock Under $5 With 90% Upside Potential
