December S&P 500 futures (ESZ23) are down -0.19%, and December Nasdaq 100 E-Mini futures (NQZ23) are down -0.18% this morning as market participants looked ahead to comments from Fed Chair Jerome Powell and other Fed officials while also awaiting the release of the Fed’s favorite inflation gauge later in the week.
In Friday’s holiday-shortened trading session, Wall Street’s major averages closed mixed, with the blue-chip Dow rising to a 3-1/2 month high. iRobot Corporation (IRBT) soared over +39% following a report indicating that Amazon is progressing towards obtaining unconditional EU antitrust approval for its planned $1.4 billion acquisition of the company. Also, Vista Outdoor Inc (VSTO) climbed more than +3% after announcing that it received an unsolicited cash-and-stock merger offer from Czech gunmaker Colt CZ Group. In addition, Fisker Inc (FSR) gained over +5% after the company filed its delayed Q3 filing with the Securities and Exchange Commission and said it had made a strategic shift aimed at improving the pace of deliveries in the U.S. and Europe. On the bearish side, NVIDIA Corporation (NVDA) dropped nearly -2% following a Reuters report stating that the company informed its customers in China about the delay in the launch of a new artificial intelligence chip designed to comply with U.S. export regulations until the first quarter of next year.
Economic data on Friday showed that the U.S. S&P Global manufacturing PMI fell to a 3-month low of 49.4 in November, weaker than expectations of 49.8. At the same time, the U.S. November S&P Global services PMI unexpectedly crept up to a 4-month high of 50.8, stronger than expectations of 50.4.
“We had mixed macroeconomic data, and the post-Thanksgiving session is only half a day, so there aren’t that many participants. But we’re seeing a market that’s on the right path of a year-end rally,” said Peter Cardillo, chief market economist at Spartan Capital Securities.
U.S. rate futures have priced in a 96.8% probability of no hike at the next central bank meeting in December and an 88.8% chance of no hike at the January FOMC meeting. Also, U.S. rate futures have priced in a 22.2% probability of a 25 basis point rate cut at the March meeting.
In the coming week, the October reading of the U.S. core personal consumption expenditures price index, the Fed’s preferred inflation gauge, will be the main highlight. Also, market participants will be eyeing a spate of economic data, including the U.S. CB Consumer Confidence, S&P/CS HPI Composite - 20 n.s.a., Richmond Manufacturing Index, GDP (preliminary), GDP Price Index (preliminary), Wholesale Inventories (preliminary), Crude Oil Inventories, Initial Jobless Claims, Personal Income, Personal Spending, Pending Home Sales, S&P Global Manufacturing PMI, and ISM Manufacturing PMI.
Meanwhile, Federal Reserve Chairman Jerome Powell will participate in a fireside chat at Spelman College on Friday.
In addition, several other Fed officials will be making appearances this week, including Goolsbee, Waller, Bowman, Mester, and Williams.
In other news, sales revenue from online shopping on Black Friday achieved a record high of $9.8 billion, reflecting a 7.5% increase compared to the previous year, according to a report from Adobe.
Today, all eyes are focused on U.S. New Home Sales data in a couple of hours. Economists, on average, forecast that October New Home Sales will come in at 721K, compared to the previous value of 759K.
Also, investors are likely to focus on the U.S. Building Permits data, which was at 1.471M in September. Economists foresee the October figure to be 1.487M.
In the bond markets, United States 10-year rates are at 4.481%, down -0.04%.
The Euro Stoxx 50 futures are down -0.21% this morning as investors digested disappointing Chinese economic data and looked ahead to remarks from European Central Bank President Christine Lagarde on monetary policy. Losses in energy stocks are leading the overall market lower. Meanwhile, ECB President Christine Lagarde is scheduled to address the Committee of Economic and Monetary Affairs of the European Parliament later in the session, providing an assessment of the region’s monetary policy. In corporate news, Rightmove Plc (RMV.LN) climbed over +5% after the U.K.’s largest property portal raised its projection for annual average revenue per advertiser.
The European economic data slate is mainly empty on Monday.
Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.30%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.53%.
China’s Shanghai Composite today closed lower after the latest data heightened concerns about deflation in the world’s second-largest economy. New energy, media, and liquor stocks underperformed on Monday. Also, Hong Kong-listed mainland property developers slumped after Beijing police launched an investigation into the debt-laden Chinese shadow bank Zhongzhi Enterprise Group. Meanwhile, profits at China’s industrial companies increased at a significantly slower rate in October than the preceding month as deflationary pressures persisted, highlighting the potential necessity for additional policy support from Beijing to bolster growth in the world’s second-largest economy. According to data released by the National Bureau of Statistics on Monday, industrial profits rose 2.7% in October from a year ago, down from September’s 11.9% gain. Investor attention is now firmly directed toward the Chinese purchasing manager indexes for November, due on Thursday.
Japan’s Nikkei 225 Stock Index closed lower today as investors exercised caution in anticipation of another U.S. inflation reading, prompting them to sell stocks to lock in profits. Healthcare and consumer cyclical stocks led the declines on Monday, while financial stocks outperformed. Meanwhile, Bank of Japan Governor Kazuo Ueda stated on Monday that the central bank cannot assert with confidence at this point that inflation will sustainably and stably reach its 2% target. “We’re seeing some positive signs in wages and inflation. But there’s high uncertainty on whether this cycle will strengthen,” Ueda told parliament. In corporate news, Taisho Pharmaceutical climbed about +18% after being untraded most of the day with a glut of buy orders following the drug maker’s announcement of a management buyout at 8,620 yen per share. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +2.90% to 17.36.
“There were little market-moving cues in the U.S. or Japan, and investors’ attention was on U.S. PCE reading later in the week,” said Hirokazu Kabeya, chief strategist at Daiwa Securities.
Pre-Market U.S. Stock Movers
Crown Castle International Corp (CCI) rose over +4% in pre-market trading following a report from the Wall Street Journal stating that activist investor Elliott Investment Management plans to engage with the company to try to boost its share price after taking a more than $2 billion stake.
YPF Sociedad Anonima (YPF) climbed more than +4% in pre-market trading after Goldman Sachs upgraded the stock to Neutral from Sell.
Shopify Inc (SHOP) gained over +2% in pre-market trading 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.
Roku Inc (ROKU) rose more than +1% in pre-market trading after Cannonball Research upgraded the stock to Buy from Neutral.
PotlatchDeltic Corp (PCH) fell over -2% in pre-market trading after Raymond James downgraded the stock to Market Perform from Strong Buy.
Foot Locker Inc (FL) slid more than -3% in pre-market trading after Citi downgraded the stock to Sell from Neutral.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Monday - November 27th
Zscaler (ZS), Mueller Water Products (MWA), Up Fintech (TIGR), Cerence (CRNC), Anavex Life Sciences (AVXL), Procaps (PROC), Cango (CANG).
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