December S&P 500 E-Mini futures (ESZ24) are down -0.12%, and December Nasdaq 100 E-Mini futures (NQZ24) are down -0.19% this morning as investors looked ahead to remarks from Federal Reserve Chair Jerome Powell and other Fed officials as well as a slew of U.S. labor market data, with a particular focus on Friday’s nonfarm payrolls report.
In Friday’s trading session, Wall Street’s major averages ended higher, with the benchmark S&P 500 and blue-chip Dow notching new all-time highs. Tesla (TSLA) climbed over +3% and was the top percentage gainer on the Nasdaq 100 after Wedbush’s Dan Ives stated that the EV maker could achieve a $2 trillion valuation within the next 12 to 18 months, citing full self-driving, autonomous penetration, and the Cybercab as the company’s “Golden Goose.” Also, chip stocks advanced after Bloomberg reported that additional U.S. curbs on sales of chip technology to China might stop short of some of the stricter measures previously considered, with Lam Research (LRCX) rising more than +3% and KLA Corp. (KLAC) gaining over +2%. In addition, Boeing (BA) rose about +2% after BOA Aviation agreed to buy 14 Boeing 737-8 aircraft. On the bearish side, Applied Therapeutics (APLT) plummeted more than -76% after announcing that the U.S. Food and Drug Administration had declined to approve its drug govorestat for the treatment of a rare genetic metabolic disease.
Meanwhile, Adobe Analytics reported on Saturday that American consumers spent a record $10.8 billion online on Black Friday, marking a year-over-year increase of 10.2%. According to Mastercard SpendingPulse, in-store and online retail sales experienced a 3.4% increase year-over-year on Black Friday.
In the coming week, the U.S. Nonfarm Payrolls report for November will be the main highlight. Also, market participants will be eyeing a spate of other economic data releases, including U.S. JOLTs Job Openings, ADP Nonfarm Employment Change, the S&P Global Composite PMI, the S&P Global Services PMI, Factory Orders, the ISM Non-Manufacturing PMI, Crude Oil Inventories, Initial Jobless Claims, Exports, Imports, Trade Balance, Average Hourly Earnings, the Unemployment Rate, the University of Michigan’s Consumer Sentiment Index (preliminary), and Consumer Credit.
Fed Chair Jerome Powell is scheduled to participate in a moderated discussion at the New York Times DealBook Summit on Wednesday. A host of other Fed officials will also be making appearances throughout the week, including Waller, Williams, Kugler, Goolsbee, Barkin, Musalem, Bowman, Hammack, and Daly.
Several notable companies like Salesforce (CRM), Marvell (MRVL), Zscaler (ZS), Chewy (CHWY), Lululemon Athletica (LULU), Dollar Tree (DLTR), Foot Locker (FL), Dollar General (DG), Kroger (KR), DocuSign (DOCU), Hewlett Packard Enterprise (HPE), and Ulta Beauty (ULTA) are slated to release their quarterly results this week.
In addition, the Federal Reserve will release its Beige Book survey of regional business contacts this week, which provides an update on economic conditions in each of the 12 Federal Reserve districts. The Beige Book is published two weeks before each meeting of the policy-setting Federal Open Market Committee.
U.S. rate futures have priced in a 63.6% probability of a 25 basis point rate cut and a 36.4% chance of no rate change at the Fed’s monetary policy committee meeting later this month.
Today, all eyes are focused on the U.S. ISM Manufacturing PMI, which is set to be released in a couple of hours. Economists, on average, forecast that the November ISM manufacturing PMI will be 47.7, compared to October’s figure of 46.5.
Also, investors will focus on the U.S. S&P Global Manufacturing PMI, which stood at 48.5 in October. Economists foresee the final November figure to be 48.8.
U.S. Construction Spending data will be released today as well. Economists expect this figure to come in at +0.2% m/m in October, compared to the previous number of +0.1% m/m.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.208%, up +0.43%.
The Euro Stoxx 50 futures are down -0.10% this morning as France’s political turmoil and weak manufacturing PMI data from the region weighed on sentiment. Automobile stocks led the declines on Monday, with Stellantis NV (STLAP.FP) plunging over -7% after the automaker’s Chief Executive Officer Carlos Tavares resigned. Bank stocks also lost ground. A survey released on Monday showed that Eurozone manufacturing activity dropped sharply in November, and a further drop in demand likely quashed any hopes for an imminent recovery after the sector had shown some signs of stabilization in October. Separately, data showed that the seasonally adjusted unemployment rate in the euro area remained at a record low in October. Meanwhile, the euro fell on Monday after France’s far-right party threatened to topple the government amid a standoff over the nation’s budget. In other corporate news, Delivery Hero Se (DHER.D.DX) slumped more than -9% after the delivery company announced that freelance riders at its Glovo unit in Spain would be hired as employees.
Spain’s Manufacturing PMI, Italy’s Manufacturing PMI, France’s Manufacturing PMI, Germany’s Manufacturing PMI, Eurozone’s Manufacturing PMI, and Eurozone’s Unemployment Rate were released today.
The Spanish November Manufacturing PMI came in at 53.1, weaker than expectations of 53.9.
The Italian November Manufacturing PMI stood at 44.5, weaker than expectations of 46.1.
The French November Manufacturing PMI arrived at 43.1, weaker than expectations of 43.2.
The German November Manufacturing PMI came in at 43.0, weaker than expectations of 43.2.
Eurozone November Manufacturing PMI has been reported at 45.2, in line with expectations.
Eurozone October Unemployment Rate was 6.3%, in line with expectations.
Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +1.13%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.80%.
China’s Shanghai Composite Index closed higher today as signs of economic stabilization in the country boosted sentiment. Automobile stocks outperformed on Monday. An official survey released over the weekend showed that China’s factory activity expanded for the second consecutive month in November, as a series of stimulus measures from Beijing helped stabilize the economy. A private-sector survey released on Monday confirmed this expansion, demonstrating the quickest growth pace since June as new orders, including international ones, facilitated a solid increase in production. Investors are now looking forward to the Central Economic Work Conference in mid-December for potential policy updates. The meeting of Chinese top leaders sets economic priorities for the year ahead. There is speculation that authorities will release additional stimulus measures, including the launch of a stabilization fund, a reduction in the required reserve ratio, and the inclusion of housing prices in local governments’ performance metrics. In corporate news, BYD gained over +2% in Hong Kong after delivering 504,003 passenger new energy vehicles in November, up from 500,526 in October.
The Chinese November Manufacturing PMI stood at 50.3, in line with expectations.
The Chinese November Non-Manufacturing PMI arrived at 50.0, weaker than expectations of 50.2.
The Chinese November Caixin Manufacturing PMI came in at 51.5, stronger than expectations of 50.6.
Japan’s Nikkei 225 Stock Index ended higher today, reversing earlier losses as investors snapped up equities, buoyed by optimism that the nation’s largest pension fund, GPIF, may increase its stock holdings. The Japanese government proposed to raise an investment return target for the Government Pension Investment Fund to 1.9% from 1.7%, setting the stage for it to boost stock purchases. Financial stocks led the gains on Monday amid expectations that the Bank of Japan might hike interest rates at its policy meeting this month. A private-sector survey released on Monday showed that Japan’s factory activity contracted at the quickest rate in eight months in November as weak demand led firms to reduce production. Separately, finance ministry data showed that Japanese companies boosted their investment in plant and equipment in the third quarter. Meanwhile, local media over the weekend quoted BOJ Governor Kazuo Ueda as saying that the next interest rate hike was “approaching,” as the economy was progressing in line with the central bank’s forecasts, leaving the door open for a December rate increase. In corporate news, Shiseido plunged over -6% after the cosmetic maker lowered its profit forecast for the next two years. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -16.09% to 18.72.
The Japanese November au Jibun Bank Japan Manufacturing PMI arrived at 49.0, in line with expectations.
The Japanese Capital Spending stood at +8.1% y/y in the third quarter, stronger than expectations of +6.7% y/y.
Pre-Market U.S. Stock Movers
Tesla (TSLA) advanced more than +1% in pre-market trading after the EV maker started rolling out version 13 of its highest-level driver assistance software, Full Self-Driving.
Cloudflare (NET) gained over +3% in pre-market trading after Morgan Stanley upgraded the stock to Overweight from Equal Weight with a price target of $130.
Gap (GAP) climbed more than +4% in pre-market trading after JPMorgan upgraded the stock to Overweight from Neutral with a price target of $30.
Upstart (UPST) slumped over -5% in pre-market trading after JPMorgan downgraded the stock to Underweight from Neutral.
Toast (TOST) slid more than -3% in pre-market trading after Goldman Sachs downgraded the stock to Neutral from Buy.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Monday - December 2nd
Zscaler (ZS), Credo Technology Holding (CRDO), CleanSpark (CLSK), Alico (ALCO).
