December S&P 500 futures (ESZ23) are trending down -0.04% this morning as investors looked ahead to the release of the Federal Reserve’s November policy meeting minutes while also awaiting quarterly results from chip designer Nvidia.
In Monday’s trading session, the benchmark S&P 500 posted a 3-1/2 month high, the blue-chip Dow rose to a 3-month high, and the tech-heavy Nasdaq 100 notched a 1-3/4 year high. Palo Alto Networks Inc (PANW) climbed over +5% after the company said in a filing on Friday that its board had approved the repurchase of up to an extra $316.7 million of its stock, representing an increase to the existing $3.3 billion repurchase plan. Also, Boeing Co (BA) soared more than +4% after Deutsche Bank upgraded the stock to Buy from Hold with a price target of $270. In addition, Microsoft Corporation (MSFT) gained over +2% after appointing OpenAI co-founders Sam Altman and Greg Brockman to lead a new advanced artificial intelligence team. On the bearish side, Chegg Inc (CHGG) plunged more than -6% after Morgan Stanley downgraded the stock to Underweight from Equal Weight with a price target of $9.
Richmond Fed President Thomas Barkin stated on Monday that U.S. economic data indicates an expanding economy with slowing price growth, but the progress isn’t sufficient for the Federal Reserve to declare victory on inflation. “The economy is still growing - unemployment is still 3.9%, and as you showed a little bit ago, inflation does seem to be settling. So all that’s good. But the job’s not done, and so you have to keep on until you get the job done, and we’ll see where we land,” Barkin said.
Meanwhile, U.S. rate futures have priced in a 99.8% probability of no hike at the December meeting and a 97.8% chance of no hike at the January FOMC meeting. Also, U.S. rate futures have priced in a 28.0% probability of a 25 basis point rate cut at the conclusion of the Fed’s March meeting.
On the earnings front, notable companies like NVIDIA (NVDA), Lowe’s (LOW), Medtronic (MDT), Analog Devices (ADI), Autodesk (ADSK), HP Inc (HPQ), Best Buy (BBY), and Dick’s Sporting Goods (DKS) are set to report their quarterly figures today.
Today, market participants will be closely monitoring the release of the Federal Reserve’s minutes from the November meeting for any new insights into the future trajectory of interest rates.
“We are not expecting any major new information, but the minutes could be less dovish than the current market pricing. The minutes are likely to indicate that the door is still open for another hike and emphasize that rates need to be kept on hold for longer,” said Mohit Kumar, a managing director at Jefferies International.
Also, investors will likely focus on U.S. Existing Home Sales data. Economists, on average, forecast that October Existing Home Sales will stand at 3.90M, compared to the previous value of 3.96M.
In the bond markets, United States 10-year rates are at 4.412%, down -0.27%.
The Euro Stoxx 50 futures are down -0.14% this morning as investors awaited more comments from ECB policymakers as well as the release of Federal Reserve policy minutes. Bank and energy stocks underperformed on Tuesday while material stocks gained ground. Meanwhile, the European Automobile Manufacturers Association reported on Tuesday a 14.6% year-on-year increase in new car sales in the European Union for October, driven partially by a significant surge in sales of fully electric cars. In corporate news, Swiss hearing aid maker Sonova Holding Ag (SOON.Z.IX) climbed over +6% following a smaller-than-feared warning on annual core profit. Also, Rheinmetall Ag (RHM.D.DX) rose more than +4% after the German defense contractor released its 2026 strategy.
The European economic data slate is mainly empty on Tuesday.
Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.01%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.10%.
China’s Shanghai Composite today closed just below the flatline, reversing earlier gains as investor optimism waned due to expectations that there won’t be strong stimulus early next year. At the same time, Chinese property stocks surged on Tuesday following a Bloomberg report indicating that regulators are drafting a list of 50 developers eligible for various financing options. The list, which comprises private and state-owned real estate developers, will serve as guidance for financial institutions in providing support for the sector through bank loans, debt, and equity financing. China Vanke, Seazen Group, and Longfor Group are among the companies included in the draft list, according to the Bloomberg report. Meanwhile, Sunac China Holdings Ltd climbed over +12% after the troubled property developer announced that all its restructuring conditions had been fulfilled, and its debt overhaul plan is now in effect. The People’s Bank of China is also considering further measures to support credit, urging lenders to limit the volume of new loans they issue in early 2024 and shift some into the current year as authorities try to smooth the credit cycle. In corporate news, Kweichow Moutai Co., Ltd. rose more than +1% following the liquor giant’s proposal for a special dividend payment totaling 24 billion yuan.
Japan’s Nikkei 225 Stock Index closed slightly lower today as the yen’s rebound against the dollar prompted a sell-off in export-oriented stocks. Automobile stocks retreated on Tuesday as the Japanese yen strengthened against the greenback, with Mazda Motor Corp slumping over -4%, Honda Motor Co Ltd dropping more than -2%, and Toyota Motor Corp falling over -1%. On the positive side, technology stocks outperformed, buoyed by gains on Wall Street. Meanwhile, Japanese government bond yields fell to multi-month lows on Tuesday, influenced by declines in U.S. rates and a smooth auction of 20-year bonds. In other corporate news, GS Yuasa Corp plunged over -10% after the battery maker announced a plan to raise as much as 47.2 billion yen ($315.47 million) through a sale of new shares and third-party allotment to Honda Motor. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -3.82% to 17.87.
Pre-Market U.S. Stock Movers
Symbotic Inc (SYM) surged about +22% in pre-market trading after the company posted upbeat Q4 results and provided above-consensus Q1 revenue guidance.
Agilent Technologies Inc (A) climbed over +6% in pre-market trading after the company reported better-than-expected Q4 results.
Avita Medical Ltd (RCEL) plunged more than -10% in pre-market trading after the skin restoration-focused pharmaceutical company lowered its annual commercial revenue guidance.
Keysight Technologies Inc (KEYS) rose over +1% in pre-market trading after the company reported stronger-than-expected Q4 results.
Xylem Inc (XYL) gained about +1% in pre-market trading after Deutsche Bank upgraded the stock to Buy from Hold.
Gen Digital Inc (GEN) climbed more than +3% in pre-market trading after Morgan Stanley upgraded the stock to Overweight from Equal Weight.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - November 21st
NVIDIA (NVDA), Lowe’s (LOW), Medtronic (MDT), Analog Devices (ADI), Autodesk (ADSK), Baidu (BIDU), HP Inc (HPQ), Jacobs Engineering (J), Best Buy (BBY), Dick’s Sporting Goods (DKS), Burlington Stores (BURL), Miniso (MNSO), Dlocal (DLO), iQIYI (IQ), NewJersey Resources (NJR), Abercrombie&Fitch (ANF), Urban Outfitters (URBN), Kohl’s Corp (KSS), Nordstrom (JWN), Golar (GLNG), GDS Holdings (GDS), Golden Ocean (GOGL), Jack In The Box (JACK), Kingsoft Cloud (KC), Guess (GES), Caleres (CAL), Embecta (EMBC), Hibbett Sports (HIBB), Tsakos Energy (TNP), Yatsen (YSG), GreenTree Hospitality (GHG), Agora (API).
On 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 solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
