December S&P 500 futures (ESZ23) are down -0.19%, and December Nasdaq 100 E-Mini futures (NQZ23) are down -0.20% this morning as investors awaited a new round of U.S. economic data and speeches from Fed officials.
In Monday’s trading session, Wall Street’s major indices closed lower. Affirm Holdings Inc (AFRM) surged over +11% following a report from Adobe, indicating that “buy now, pay later” transactions contributed to $760 million in online spending during the Black Friday weekend sales, marking a 20% increase from last year. Also, Shopify Inc (SHOP) climbed more than +4% after the company said that its merchants set a Black Friday record with a combined $4.1 billion in sales, representing a 22% increase over last year. On the bearish side, GE HealthCare Technologies Inc (GEHC) slid over -3% after UBS downgraded the stock to Sell from Neutral with a price target of $66.
Economic data on Monday showed that U.S. new home sales fell -5.6% m/m to 679K in October, weaker than expectations of 721K. At the same time, U.S. October Building Permits stood at 1.498M, stronger than expectations of 1.487M.
“Coming off four weeks of very strong and positive market activity we’re seeing investors take a bit of a breather and focus on data. This week all eyes will be focused on additional inflation data as well as consumer confidence and spending to determine if Main Street has kept up with Wall Street,” said Greg Bassuk, chief executive officer at AXS Investments.
Meanwhile, U.S. rate futures have priced in a 96.8% probability of no hike at the December FOMC meeting and an 88.8% chance of no hike at the January meeting. Also, U.S. rate futures have priced in a 23.1% probability of a 25 basis point rate cut at the conclusion of the Fed’s March meeting.
In other news, online shopping deals as part of Cyber Monday are projected to entice shoppers to spend a record $12.4 billion, as reported by Adobe Analytics.
On the earnings front, notable companies like Intuit (INTU), Workday (WDAY), CrowdStrike Holdings (CRWD), Splunk (SPLK), and Hewlett Packard (HPE) are slated to release their quarterly results today.
Today, all eyes are focused on U.S. CB consumer confidence data in a couple of hours. Economists, on average, forecast that November CB Consumer Confidence will stand at 101.0, compared to the previous figure of 102.6.
Also, investors will likely focus on the U.S. S&P/CS HPI composite - 20 n.s.a, which came in at +2.2% y/y in August. Economists foresee the September figure to be +4.0% y/y.
The U.S. Richmond manufacturing index will be reported today as well. Economists expect November’s figure to be 1, compared to the previous value of 3.
In addition, market participants will be looking toward a batch of speeches from Fed officials Goolsbee, Waller, and Bowman.
In the bond markets, United States 10-year rates are at 4.400%, up +0.29%.
The Euro Stoxx 50 futures are down -0.48% this morning as investors digested comments from European Central Bank policymakers and cautiously awaited the release of Eurozone inflation numbers and the Fed’s favorite inflation gauge later in the week. A survey showed on Tuesday that German consumer sentiment experienced a slight improvement heading into December but lingered at a notably low level, showing no indications of a sustainable recovery in Europe’s largest economy. Meanwhile, Bundesbank chief Joachim Nagel said on Tuesday that the European Central Bank might need to consider raising interest rates again in the event of a deteriorating inflation outlook, cautioning against a hasty easing of policy following the steepest set of rate hikes on record. Also, ECB President Christine Lagarde stated on Monday that the central bank’s fight to contain price growth is not yet complete. In corporate news, Argenx Se (ARGX.BB) slumped over -14% following disappointing results from an advance study of Vyvgart Hytrulo, indicating its failure to meet primary and secondary endpoints. In addition, Ubisoft Entertain (UBI.FP) slid more than -8% after the French video game producer announced that it had placed convertible bonds worth 494.5 million euros.
Germany’s GfK Consumer Climate and France’s Consumer Confidence data were released today.
The German December GfK Consumer Climate Index came in at -27.8, stronger than expectations of -27.9.
The French November Consumer Confidence arrived at 87, stronger than expectations of 84.
Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.23%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.12%.
China’s Shanghai Composite today closed slightly higher, struggling for clear direction as market participants anticipate Chinese manufacturing activity data for November later in the week. Healthcare and automobile stocks gained ground on Tuesday. Meanwhile, China’s central bank governor stated on Tuesday that monetary policy would stay accommodative to bolster the economy, but he emphasized the need for gradual structural reforms to reduce reliance on infrastructure and property for growth. Pan Gongsheng, speaking at the HKMA-BIS High-Level Conference in Hong Kong, indicated that the recent economic momentum suggests China is on track to meet its 2023 growth target of around 5%. “I’m confident that China will enjoy healthy and sustainable growth in 2024 and beyond,” Pan said. In corporate news, SenseTime Group Inc. slid over -4% following accusations from Grizzly Research, alleging that the artificial intelligence software company inflated its revenue figures. Investor focus is currently squarely on the Chinese purchasing manager indexes for November, scheduled for release on Thursday.
Japan’s Nikkei 225 Stock Index closed slightly lower today as the yen extended its advance in the wake of Treasuries rally. Data showed on Tuesday that a key measure of Japan’s trend inflation surged to 2.2% in October, reaching a new record high and indicating a broadening of price pressure, thereby strengthening the case for the central bank to scale back its massive monetary stimulus. Meanwhile, yields on 10-year Japanese government bonds and most other tenors declined on Tuesday, tracking moves in U.S. Treasuries as investors turned more optimistic about the likelihood of Federal Reserve rate cuts following weak housing data overnight. In corporate news, Denso Corp slumped over -4% following a Reuters report indicating that Toyota group companies intend to reduce their holdings in the supplier by selling approximately 10% of the company by the end of the year. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -7.09% to 16.13.
Pre-Market U.S. Stock Movers
ESGL Holdings Ltd (ESGL) surged about +91% in pre-market trading after announcing a multi-year contract renewal with Singapore Refining Company Private Limited.
Zscaler Inc (ZS) plunged over -6% in pre-market trading after the cybersecurity company reported upbeat Q1 results and issued solid FY24 EPS and revenue guidance but declined to lift its full-year billings forecast.
Carlyle Group Inc (CG) climbed more than +5% in pre-market trading after announcing admission to the S&P MidCap 400 index.
Boeing Co (BA) gained over +1% in pre-market trading after RBC Capital upgraded the stock to Outperform from Sector Perform.
Edwards Lifesciences Corp (EW) dropped more than -2% in pre-market trading after Wolfe Research downgraded the stock to Underperform from Peer Perform.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - November 28th
Intuit (INTU), Workday (WDAY), Bank of Nova Scotia (BNS), CrowdStrike Holdings (CRWD), Splunk (SPLK), Hewlett Packard (HPE), NetApp (NTAP), Azek Company (AZEK), Fluence Energy (FLNC), Alvotech (ALVO), Leslies (LESL), Tuya (TUYA), Nano Dimension (NNDM), Nano X (NNOX), MYT Netherlands (MYTE), Citi Trends (CTRN).
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