December S&P 500 E-Mini futures (ESZ24) are down -0.05%, and December Nasdaq 100 E-Mini futures (NQZ24) are down -0.07% this morning as Treasury yields climbed following President-elect Donald Trump’s pledge to impose additional tariffs on China, Mexico, and Canada.
Trump said on Monday evening on his Truth Social Network that he would impose “an additional 10% tariff, above any additional tariffs” on Chinese imports as well as a 25% tariff on all products from Mexico and Canada. He stated that the measures were necessary to curb the flow of migrants and illegal drugs across the U.S. border.
In yesterday’s trading session, Wall Street’s main stock indexes closed in the green, with the benchmark S&P 500 and blue-chip Dow notching new all-time highs and the tech-heavy Nasdaq 100 climbing to a 1-week high. Super Micro Computer (SMCI) surged over +15% and was the top percentage gainer on the S&P 500 and Nasdaq 100, adding to the 25% jump over the past two sessions after the server maker said that it expects to file its delayed 10-K and 10-Q reports in the period available under Nasdaq rules. Also, homebuilder stocks gained ground after the benchmark 10-year Treasury yield fell to a 2-week low, with D.R. Horton (DHI) and Builders FirstSource (BLDR) climbing more than +5%. In addition, Bath & Body Works (BBWI) soared over +16% after posting upbeat Q3 results and raising its full-year guidance. On the bearish side, Nvidia (NVDA) slid more than -4% and was the top percentage loser on the Dow and Nasdaq 100 after Amazon.com announced it was developing its own AI chips.
Today, investors will closely monitor the publication of the Federal Reserve’s minutes from the November 6-7 meeting. The report will offer details on the policymakers’ discussion during the November meeting, where they decided to lower interest rates by a quarter percentage point, and may shed light on the central bank’s future rate-cut plans.
Meanwhile, U.S. rate futures have priced in a 59.6% chance of a 25 basis point rate cut and a 40.4% chance of no rate change at the conclusion of the Fed’s December meeting.
Market participants will also focus on earnings reports from several high-profile companies, with Analog Devices (ADI), Dell Technologies (DELL), Crowdstrike (CRWD), Workday (WDAY), HP Inc. (HPQ), Best Buy (BBY), and Dick’s Sporting Goods (DKS) set to report their quarterly figures today.
On the economic data front, all eyes are focused on the U.S. Conference Board’s Consumer Confidence Index, which is set to be released in a couple of hours. Economists, on average, forecast that the November CB Consumer Confidence index will stand at 111.8, compared to last month’s figure of 108.7.
Also, investors will focus on U.S. New Home Sales data. Economists foresee this figure to stand at 725K in October, compared to 738K in September.
The U.S. S&P/CS HPI Composite - 20 n.s.a. will come in today. Economists expect September’s figure to be +4.7% y/y, compared to +5.2% y/y in August.
The U.S. Richmond Fed Manufacturing Index will be released today as well. Economists estimate this figure to come in at -10 in November, compared to the previous value of -14.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.300%, up +0.82%.
The Euro Stoxx 50 futures are down -0.81% this morning as U.S. President-elect Donald Trump’s tariff threat fueled fears of a global trade war. Automobile stocks led the declines on Tuesday. Bank and retail stocks also slumped. Meanwhile, European Central Bank Vice President Luis de Guindos told a Finnish newspaper that the ECB will continue reducing interest rates as inflation eases while gradually shifting its focus to growth, which remains fragile. “Concerns about high inflation have shifted to economic growth,” Helsingin Sanomat quoted de Guindos as saying. Investors are awaiting the release of preliminary Eurozone inflation data for November, scheduled for Friday, to gain insights into the potential size of the ECB rate cut in December. In corporate news, Melrose Industries Plc (MRO.LN) surged over +8% after JPMorgan raised its price target on the stock.
The European economic data slate is empty on Tuesday.
Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.12% and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.87%.
China’s Shanghai Composite Index ended slightly lower today as cautious sentiment prevailed after U.S. President-elect Donald Trump pledged an additional 10% tariff on Chinese imports. Software and automobile stocks underperformed on Tuesday. However, the losses were limited as Trump’s rhetoric softened from his campaign promise of a 60% tariff on Chinese goods. Investors also remained hopeful that Beijing would step up fiscal easing to bolster economic growth amid rising geopolitical tensions. Meanwhile, investors are looking forward to Chinese industrial profit data, scheduled for Wednesday, and official PMI data, set for release on Saturday. In other news, Fitch Ratings kept a neutral outlook on the Asia-Pacific securities sector, which includes Chinese securities firms. In corporate news, Baidu climbed over +4% after media reports indicated that its autonomous ride-hailing platform would begin a trial operation in Hong Kong.
Japan’s Nikkei 225 Stock Index closed lower today as global sentiment deteriorated following U.S. President-elect Donald Trump’s pledge to impose additional trade tariffs on China and other nations. Electronics and export-oriented stocks weighed on the index on Tuesday. Data released on Tuesday showed that a key measure of Japan’s service-sector inflation remained close to 3% in October, supporting the Bank of Japan’s view that increasing wages are prompting more companies to offset higher labor costs with price increases. Meanwhile, investors are focused on Tokyo’s inflation data, set for release on Friday, after BOJ Governor Kazuo Ueda last week signaled that the December policy meeting will include a live discussion on whether to raise interest rates. In other news, the Japanese government on Tuesday kept its assessment that the economy is moderately recovering, while warning of the potential effects of Trump’s policies on the economic outlook. “Trends in the U.S. economy can have a direct or indirect impact on the Japanese economy, and we also need to be aware of the possibility of an impact through fluctuations in financial and capital markets,” a Cabinet Office official said. In corporate news, IHI Corp. slid over -4% following news that Japan’s space agency halted an engine combustion test of its Epsilon S rocket due to a fire at the test site. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -0.38% to 20.77.
The Japanese October Corporate Services Price Index stood at +2.9% y/y, stronger than expectations of +2.5% y/y.
Pre-Market U.S. Stock Movers
Semtech (SMTC) surged more than +18% in pre-market trading after the company posted upbeat Q3 results and issued above-consensus Q4 guidance.
Kohl’s (KSS) slid over -4% in pre-market trading after the company announced in a statement that CEO Tom Kingsbury will resign effective January 15th, 2025.
Chevron (CVX) gained more than +1% in pre-market trading after Citi upgraded the stock to Buy from Neutral with a price target of $185.
Exact Sciences (EXAS) climbed over +5% in pre-market trading after announcing plans to present 10 abstracts showcasing the scope of its Precision Oncology portfolio at the 2024 annual San Antonio Breast Cancer Symposium.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - November 26th
Analog Devices (ADI), Dell Tech (DELL), CrowdStrike Holdings (CRWD), Workday (WDAY), HP Inc. (HPQ), Best Buy (BBY), Nutanix (NTNX), Burlington Stores (BURL), Dick’s Sporting Goods (DKS), JM Smucker (SJM), Huazhu (HTHT), VinFast (VFS), Abercrombie&Fitch (ANF), Nordstrom (JWN), Urban Outfitters (URBN), Manchester United (MANU), Ambarella (AMBA), Arrowhead Pharma (ARWR), Kohl’s Corp (KSS), JOYY Inc (YY), American Woodmark (AMWD), Guess (GES), Embecta (EMBC), Noah (NOAH), Tsakos Energy (TEN), 3D Systems (DDD), Titan Machinery (TITN), Mediwound (MDWD), Ucloudlink (UCL).
