March S&P 500 E-Mini futures (ESH24) are up +0.04%, and March Nasdaq 100 E-Mini futures (NQH24) are up +0.23% this morning as market participants looked ahead to a fresh batch of U.S. economic data.
In Wednesday’s trading session, the benchmark S&P 500 posted a nearly 2-year high, and the blue-chip Dow and tech-heavy Nasdaq 100 notched record highs. Tesla Inc (TSLA) rose over +1% following a Bloomberg report indicating that the electric vehicle giant was gearing up to launch a revamped version of its best-selling Model Y car from its Shanghai plant. Also, Coherus BioSciences Inc (CHRS) soared more than +23% after the company announced the U.S. FDA had approved its on-body injector of cancer drug Udenyca. In addition, Cytokinetics Inc (CYTK) surged over +82% after the biotech reported positive results from a keenly awaited late-stage study of its treatment for a form of heart muscle disease. On the bearish side, Iovance Biotherapeutics Inc (IOVA) plunged over -18% after the company said the U.S. FDA had placed a clinical hold on its Phase 2 IOV-LUN-202 trial for experimental lung cancer therapy LN-145 due to a fatal adverse event.
“Perhaps the most important question is: what has the S&P 500 done after it has climbed out of its hole? Did the rally to new highs leave the market overbought and in need of a correction? Or was it a breakout to a new up leg? History sides with the latter,” said Ed Clissold at Ned Davis Research.
Economic data on Wednesday showed that the U.S. Richmond Fed manufacturing sentiment index unexpectedly fell to an 8-month low of -11 in December, weaker than expectations of -7.
Meanwhile, U.S. rate futures have priced in a 16.5% probability of a 25 basis point rate cut at the next central bank meeting in January and a 72.8% chance of a 25 basis point rate cut at the conclusion of the Fed’s March meeting.
Today, all eyes are focused on U.S. Pending Home Sales data in a couple of hours. Economists, on average, forecast that November Pending Home Sales will stand at +1.0% m/m, compared to the previous value of -1.5% m/m.
Also, investors are likely to focus on U.S. Initial Jobless Claims data, which came in at 205K last week. Economists anticipate the new figure to be 210K.
U.S. Wholesale Inventories preliminary data will come in today. Economists foresee this figure to stand at -0.2% m/m in November, compared to the previous number of -0.4% m/m.
U.S. Crude Oil Inventories data will be reported today as well. Economists estimate this figure to be -2.704M, compared to last week’s value of +2.909M.
In the bond markets, United States 10-year rates are at 3.817%, up +0.77%.
The Euro Stoxx 50 futures are down -0.15% this morning, erasing an early advance in thin holiday trading. Losses in energy stocks are leading the overall market lower. The Euro Stoxx 50 index eyes a near 19% advance this year. Meanwhile, volumes are anticipated to be light as only a few trading days remain in the calendar year. In corporate news, Vestas Wind Systems A/S (VWS.C.DX) rose over +1%, extending gains to a sixth straight session after the Danish wind turbine maker said it had received a 1,089 MW order in the United States.
The European economic data slate is mainly empty on Thursday.
Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +1.38%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.42%.
China’s Shanghai Composite today closed sharply higher, propelled by a rotation into some of 2023’s worst-performing sectors and a favorable global backdrop. New energy, consumer staples, and tourism stocks led the gains on Thursday. Tech giants and mainland developers listed in Hong Kong also climbed. The yuan surged to its highest level against the greenback in two weeks. Meanwhile, foreign investors bought a net 13.6 billion yuan ($1.9 billion) worth of Chinese stocks through the Stock Connect on Thursday, marking the largest daily inflow in five months. In other news, China, as outlined in an interim report on the country’s 14th five-year plan published by parliament on Wednesday, will endeavor to expand domestic demand, facilitate a speedy economic recovery, and foster stable growth. Investors are now eagerly awaiting the release of purchasing managers’ index readings for December over the weekend to obtain additional insights into the Chinese economy.
Japan’s Nikkei 225 Stock Index closed lower today, snapping a 4-day winning streak as a stronger yen weighed on export-oriented stocks. Bank of Japan Governor Kazuo Ueda continued laying the groundwork for the country’s first interest rate increase since 2007, making further comments that strengthen the case for a move in the spring while not ruling out the less likely option of a January hike. “It’s possible to make some decisions even if the bank doesn’t have the full results of spring wage negotiations from small- and middle-sized businesses,” the governor said in an interview with public broadcaster NHK released Wednesday. On the ground of this, the yen strengthened for the second day, weighing on export-oriented stocks. Meanwhile, government data showed on Thursday that Japanese retail sales rose more than expected in November from a year earlier, marking the 21st consecutive month of growth. Separately, data showed on Thursday that Japan’s industrial production experienced a month-over-month decline in November, marking the first decrease since August. In corporate news, DIC Corp climbed over +6% after activist fund Oasis Management revealed its ownership of a 6.9% stake in the printing materials maker. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +1.18% to 17.10.
The Japanese November Industrial Production arrived at -0.9% m/m, stronger than expectations of -1.6% m/m.
The Japanese November Retail Sales stood at +5.3% y/y, stronger than expectations of +5.0% y/y.
Pre-Market U.S. Stock Movers
Sociedad Quimica y Minera de Chile SA (SQM) climbed over +7% in pre-market trading after the Chilean miner announced a memorandum of understanding with the National Copper Corporation of Chile for the operation and development of the Salar de Atacama from 2025 to 2060.
EchoStar Corporation (SATS) gained more than +2% in pre-market trading after entering the S&P SmallCap 600.
Spotify Technology SA (SPOT) rose about +0.7% in pre-market trading after CICC initiated coverage of the stock with an Outperform rating and a $210 price target.
Cronos Group Inc (CRON) advanced over +1% in pre-market trading after BofA raised its price target on the stock to $2 from $1.78 and kept an Underperform rating.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - December 28th
Eaton Vance Tax Manag Glb Buy Write (ETW), Eaton Vance Tax Managed Buy Closed (ETB), Eaton Vance National Muni Opport (EOT).
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