Major U.S. indices witnessed marginal declines in premarket trading on Monday amid mixed global trade. This week, investors will be closely watching key economic indicators, with inflation data in particular focus.
Wednesday’s release of November’s consumer price index will provide insights into inflation trends. Additionally, reports on wholesale inflation, import prices, small business optimism, and initial jobless claims are scheduled for the week. Federal Reserve officials are currently in a quiet period ahead of their December meeting.
The 10-year and two-year Treasury notes yielded 4.17% and 4.11%, respectively. Expectations of a further 25 basis point rate cut in December rose to 87.1%, according to CME Group’s FedWatch tool.
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.17% |
| S&P 500 | -0.09% |
| Dow Jones | -0.03% |
| Russel 2000 | 0.13% |
In premarket trading on Monday, the SPDR S&P 500 ETF Trust (NYSE:SPY) was down 0.05% to $607.49 and the Invesco QQQ Trust ETF (NASDAQ:QQQ) dropped 0.12% to $525.83, according to Benzinga Pro data.
Cues From The Last Session
U.S. stock markets closed mixed on Friday, with the S&P 500 and Nasdaq Composite reaching new highs. The strong November jobs report, which exceeded expectations, fueled market optimism.
Technology stocks, particularly software firms, surged. Docusign Inc (NASDAQ:DOCU) and Asana Inc (NYSE:ASAN) soared over 28% and 43%, respectively, after reporting better-than-expected quarterly results and issuing upbeat forecasts. Lululemon Athletica Inc (NASDAQ: LULU also gained 16% on strong earnings and an increased share buyback program.
However, other sectors like energy, utilities, and healthcare lagged. The Dow Jones Industrial Average declined slightly.
Key Takeaways:
- Strong Jobs Report: The U.S. economy added more jobs than anticipated, boosting market sentiment.
- Tech Rally: Tech stocks outperformed, driven by strong earnings and positive guidance.
- Sector Divergence: While tech soared, other sectors like energy and healthcare struggled.
| Index | Last Week’s Performance (+/-) | Value |
| Nasdaq Composite | 2.59% | 19,859.77 |
| S&P 500 | 0.83% | 6,090.27 |
| Dow Jones | -0.32% | 44,642.52 |
| Russel 2000 | -0.57% | 2,408.99 |
Insights From Analysts:
According to Morgan Stanley, the Republican party's win in the 2024 elections could pave the way for significant policy changes. The note also says that concerns over trade tariffs, immigration policies, fiscal sustainability, and the scope and timing of new policies may constrain the broader economic outlook.
As per Morgan Stanley, Trump's deregulation could benefit traditional energy, but the outlook for oil is uncertain due to potential oversupply and weak global demand, especially from China. In contrast, natural gas may see growth from strong European demand and increased domestic use for electrification and AI-powered data centers.
U.S. defense spending is expected to stay robust amid rising geopolitical tensions, says Morgan Stanley.
According to Morgan Stanley, the technology sector may see mixed outcomes. Cryptocurrencies and AI industries could benefit from Trump's favorable stance. However, social media and information companies may continue facing regulatory and antitrust challenges.
Charlie Bilello, the chief market strategist at Creative Planning in an X post highlighted that the world was witnessing a “widest valuation gap in history” as U..S Stocks were trading over 22x forward earnings versus 14x for international stocks.
David Kostin, partner and chief U.S. equity strategist at Goldman Sachs, in a LinkedIn post from November-end said, “We forecast the S&P 500 index will rise to 6,500 by year-end 2025.”
He backed his projection by saying “Our view is predicated on continued U.S. economic expansion, earnings growth of 11% in 2025 and 7% in 2026, and a forward P/E multiple of 21.5x at the end of next year, a 1% compression from the current P/E of 21.7x. Our projected return would rank in the 46th percentile of the historical distribution of 12-month returns.”
See Also: How To Trade Futures
Upcoming Economic Data
This week’s economic calendar is packed with essential data releases that investors will keep a close eye on:
- On Monday, wholesale inventories data for October will be released at 10:00 a.m. ET.
- On Tuesday, November’s data on the NFIB optimism index will be released at 6:00 a.m. ET.
- The revised U.S. productivity data for the third quarter will be released at 8:30 a.m. ET.
- On Wednesday, November’s headline and core consumer price index data will be released at 8:30 a.m. ET.
- The monthly U.S. federal budget data will be released at 2:00 p.m. ET.
- On Thursday, initial jobless claims data till Dec. 7 and the core and headline producer price index for November will be released at 8:30 a.m. ET.
- On Friday, the import price index data will be released at 8:30 a.m. ET.
Stocks In Focus:
- C3.ai Inc. (NYSE:AI) shares were up 2.52% at $41.54 apiece in premarket trade ahead of its second-quarter earnings results that will be released after the closing bell on Monday, Dec. 9.
- Rigetti Computing Inc. (NASDAQ:RGTI) shares were up 19.18% to 5.22 per share in premarket after its director Michael S. Clifton sold 125,000 shares in a transaction on Friday, December 6th. This represents a 9.5 % decrease in their ownership of the stock.
- Super Micro Computer Inc. (NASDAQ:SMCI) shares were trading 8.76% higher at $47.78 apiece in premarket after it won a key Nasdaq extension to file its overdue annual and quarterly reports by Feb. 25.
- Palantir Technologies Inc. (NASDAQ:PLTR) shares advanced by 7.02% to $81.70 per share in premarket trade after the company along with Anduril announced the launch of a new consortium to ensure that the U.S. government leads the world in artificial intelligence.
- Jeffs Brands Ltd. (NASDAQ:JFBR) shares were up 5.2% in premarket as the company announced that it has regained compliance status with Nasdaq's minimum bid requirement.
- Investors are awaiting earnings results from Oracle Corporation (NYSE:ORCL), Toll Brothers, Inc. (NYSE:TOL), and Casey’s General Stores, Inc. (NASDAQ:CASY) today.
Commodities, Bonds And Global Equity Markets:
Crude oil futures rose in the early New York session, advancing 1.16% to hover around $67.98 per barrel.
The gold spot index was 0.70% higher at $2,678.31 per ounce. The Dollar Index was down 0.18% to 105.868 level.
Asian markets were mixed on Monday as Shanghai’s CSI 300 and India’s S&P BSE Sensex closed lower. South Korea’s KOSPI fell 2.8% amid the ongoing political turmoil in the country. Japan’s Nikkei 225, Hong Kong’s Hang Seng, and Australia’s ASX 200 ended in green.
European markets were mixed in early trading.
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Photo courtesy: Wikimedia
