The S&P 500 Index ($SPX) (SPY) today is down -0.07%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.15%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.09%.
Stocks today are slightly lower, with the S&P 500 and Nasdaq 100 consolidating below Monday’s record highs. Some negative corporate news is weighing on stocks today with Zscaler down more than -4% after forecasting Q2 adjusted EPS below consensus. Also, Honeywell International is down more than -2% after cutting its full-year adjusted EPS forecast.
The markets are looking ahead to Wednesday’s Nov ISM services index (expected -0.5 to 55.5). Also, on Wednesday, Fed Chair Powell will speak at a moderated discussion event in New York. Finally, the markets are awaiting Friday’s Nov nonfarm payrolls (expected +200,000) and Nov average hourly earnings (expected to ease to +3.9% y/y from +4.0% y/y in Oct).
The markets are discounting the chances at 74% for a -25 bp rate cut at the December 17-18 FOMC meeting.
Overseas stock markets today are higher. The Euro Stoxx 50 rose to a 3-1/2 week high and is up +0.22%. China's Shanghai Composite Index climbed to a 2-week high and closed up +0.44%. Japan's Nikkei Stock 225 rallied to a 3-week high and closed up +1.91%.
Interest Rates
March 10-year T-notes (ZNH25) today are up +3 ticks. The 10-year T-note yield is down -0.8 bp to 4.182%. Mar T-notes today are slightly higher. Expectations that the FOMC will cut interest rates at the December 17-18 FOMC meeting are boosting T-note prices after Fed Governor Waller said Monday he’s leaning toward a Fed rate cut at the December FOMC meeting. Waller’s comments pushed the chances of a 25 bp rate cut at the December 17-18 FOMC meeting up to 74% from 55% on Monday. Supply pressures are limiting the upside in T-notes, with as much as $25 billion in corporate debt offerings expected this week, which prompts bond dealers to short T-notes as a hedge against the incoming new supply.
European government bond yields today are mixed. The 10-year German bund yield is up +1.3 bp to 2.047%. The 10-year UK gilt yield is down -0.3 bp to 4.210%.
Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 16% for a -50 bp rate cut at the same meeting.
US Stock Movers
Zscaler (ZS) is down more than -4% to lead losers in the Nasdaq 100 after forecasting Q2 adjusted EPS of 68 cents-69 cents, below the consensus of 70 cents.
Honeywell International (HON) is down more than -2% to lead losers in the Dow Jones Industrials after cutting its full-year adjusted EPS forecast to $9.68-$9.78 from a previous forecast of $10.15-$10.25, weaker than the consensus of $10.17.
Seagate Technology Holdings (STX) is down more than -2% after it said it sees Q3 production output lower than previously seen.
TransMedics Group (TMDX) is down more than -9% after forecasting 2024 revenue of $428 million-$432 million, the midpoint below the consensus of $431.9 million.
US Steel (X) is down more than -7% after President-elect Trump said he would block US Steel from being bought by Nippon Steel when he becomes president.
Live Nation Entertainment (LYV) is down more than -1% after announcing it intends to offer $1.0 billion in aggregate principal convertible senior notes due 2030.
CleanSpark (CLSK) is down more than -9% after it filed to delay its 10-K annual filing.
Microchip Technology (MCHP) is down more than -3% after saying it will shut down a plant in Arizona and forecast Q3 revenue will be close to the low end of its original guidance.
Super Micro Computer (SMCI) is up more than +5% to lead gainers in the S&P 500 and Nasdaq 100 and added to Monday’s +28% surge after a special committee found no evidence of misconduct by management or the board.
AT&T (T) is up more than +4% after predicting sustained profit growth over the next three years and authorizing a $20 billion share repurchase program.
Synchrony Financial (SYF) is up more than +2% after Wells Fargo Securities upgraded the stock to overweight from equal weight with a price target of $85.
Janux Therapeutics (JANX) is up more than +72% after announcing positive clinical data for its JANX007 cancer drug in 5L metastatic castration-resistant prostate cancer patients.
Axon Enterprise (AXON) is up more than +1% after Morgan Stanley upgraded the stock to overweight from equal weight with a price target of $700.
Citigroup (C) is up more than +1% after Keefe, Bruyette $ Woods upgraded the stock to outperform from market perform with a price target of $82.
Earnings Reports (12/3/2024)
Core & Main Inc (CNM), Donaldson Co Inc (DCI), Marvell Technology Inc (MRVL), Okta Inc (OKTA), Pure Storage Inc (PSTG), Salesforce Inc (CRM).
