The S&P 500 Index ($SPX) (SPY) today is up +0.33%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.16%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.54%.
Stocks today are mixed. On the positive side, Oracle is up more than +13% after reporting stronger-than-expected Q1 adjusted revenue. Also, Tesla is up more than +3% after Deutsche Bank named the stock a top pick with a buy recommendation. In addition, Johnson Controls International is up more than +3% after Bank of America Global Research upgraded the stock to a buy.
On the negative side, Goldman Sachs is down more than -3% to weigh on the Dow Jones Industrials after CEO Solomon said his bank’s trading unit is on track to drop 10% from the prior year, led by declines in the fixed-income business. Also, Apple is down more than -1% after losing a court fight in the European Union over a $14.4 billion Irish tax bill.
Another supportive factor for stocks was today’s Chinese trade news that showed China’s Aug exports rose +8.7% y/y, stronger than expectations of +6.6% y/y and the largest increase in 17 months. The strength in Chinese exports is supportive of the global economic growth outlook.
The markets are cautious going into tonight’s debate between presidential candidates Harris and Trump, which may affect polling ahead of the November election.
The markets are looking ahead to US consumer price news on Wednesday to see if inflation falls by enough to allow the Fed to ease monetary policy aggressively. The consensus is for Aug CPI to ease to +2.6% y/y from +2.9% y/y in July and for the Aug core CPI to be unchanged from July at +3.2% y/y.
The markets are discounting the chances at 100% for a -25 bp rate cut for the September 17-18 FOMC meeting and at 29% for a -50 bp rate cut at that meeting.
Overseas stock markets today are mixed. The Euro Stoxx 50 is down -0.45%. China's Shanghai Composite recovered from a 7-month low and closed up +0.28%. Japan's Nikkei Stock 225 closed down by -0.16%.
Interest Rates
December 10-year T-notes (ZNZ24) today are down -1 tick. The 10-year T-note yield is up +0.2 bp at 3.702%. Dec T-notes today are slightly lower, weighed down by negative carryover from weakness in European government bonds. Also, supply pressures are undercutting T-notes as the Treasury will auction $58 billion of 3-year T-notes later today as part of this week’s $119 billion auction package of T-notes and T-bonds.
European government bond yields today are higher. The 10-year German bund yield is up +1.3 bp at 2.181%. The 10-year UK gilt yield is up +0.7 bp at 3.863%.
Swaps are discounting the chances of a -25 bp rate cut by the ECB at 100% for the Sep 12 meeting.
US Stock Movers
The strength of megacap technology stocks is supporting gains in the broader market. Nvidia (NVDA) and Amazon.com (AMZN) are up more than +2%. Also, Microsoft (MSFT) is up more than +2% to lead gainers in the Dow Jones Industrials. In addition, Meta Platforms (META) and Alphabet (GOOGL) are up more than +1%.
Oracle (ORCL) is up more than +13% to lead gainers in the S&P 500 after reporting Q1 adjusted revenue of $13.31 billion, better than the consensus of $13.26 billion.
Tesla (TSLA) is up more than +3% to lead gainers in the Nasdaq 100 after Deutsche Bank named the stock a top pick with a buy recommendation and a price target of $295.
Wells Fargo & Co (WFC) is up more than +2% after CFO Santomassimo said deposits are performing “quite well” versus expectations.
Mission Produce (AVO) is up more than +16% after reporting Q3 revenue of $324 million, well above the consensus of $231 million.
Calavo Growers (CVGW) is up more than +6% after reporting Q3 adjusted EPS of 57 cents, stronger than the consensus of 43 cents.
Elf Beauty (ELF) is up more than +3% after B Riley Securities initiated coverage of the stock with a recommendation of buy and a price target of $175.
Johnson Controls International (JCI) is up more than +1% after Bank of America Global Research upgraded the stock to buy from neutral.
Hewlett Packard Enterprise (HPE) is down more than -7% to lead losers in the S&P 500 after announcing an offering of $1.35 billion of convertible preferred stock in an underwritten registered public offering.
Goldman Sachs (GS) is down more than -3% to lead losers in the Dow Jones Industrials after CEO Solomon said his bank’s trading unit is on track to drop 10% from the prior year, led by declines in the fixed-income business.
Ulta Beauty (ULTA) is down more than -4% after B Riley Securities initiated coverage of the stock with a sell rating and a price target of $300.
Apple (AAPL) is down more than -1% after losing a court fight in the European Union over a $14.4 billion Irish tax bill.
AngloGold Ashanti Plc (AU) is down more than -5% after announcing that it agreed to buy Centamin Plc for about $2.5 billion.
StepStone Group (STEP) is down more than -5% after announcing that it offered 4.1 million class A shares via Goldman Sachs.
Earnings Reports (9/10/2024)
Academy Sports & Outdoors Inc (ASO), Cantaloupe Inc (CTLP), Critical Metals Corp (CRML), Dave & Buster's Entertainment (PLAY), Evolution Petroleum Corp (EPM), GameStop Corp (GME), Innovage Holding Corp (INNV), Mama's Creations Inc (MAMA), Petco Health & Wellness Co Inc (WOOF).
On the date of publication, Rich Asplund 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.
