Early Look

Monday, December 9, 2024

U.S. stock futures are down slightly, near the low end of its overnight range as investors are keeping an eye on political developments in Syria, France and South Korea, while awaiting key inflation data later this week and the FOMC policy rate meeting next week. U.S. stocks closed mostly higher Friday, as the S&P 500 registered a record closing high for 57th time in 2024, and Nasdaq its 36th record high close for the year after the latest employment report showed jobs growth bounced back in November. Also, S&P futures (Spuz) put in higher highs for the last 14 days in a row after Friday’s move. The tech-heavy Nasdaq ended 0.8% higher on Friday, the S&P 500 rose 0.3% and the Dow Jones Industrial Average fell 0.3%. For the week, the Nasdaq jumped 3.3%, the S&P 500 rose 1% and the Dow shed 0.6%. The S&P 500 and Nasdaq each booked a third straight week of gains as Treasury yields retreated. In Sector movers, Technology (XLK rose +3.04% last week), Communications (XLC +2.57% WTD) and Consumer Discretionary (XLY +4.7% WTD) led by strength in TSLA, NFLX, META, AMZN and AAPL. The yield on the 10-year Treasury note fell Friday to 4.150%, falling for three consecutive weeks and down to 6-week lows as traders boosted their bets on a Federal Reserve interest-rate reduction this month after a mixed November employment report. Next up for major averages, the consumer price index (CPI) looms as one of the last major data releases of the year likely to impact Fed decision making at the December meeting. Current market expectations are for a 2.7% YoY rise in headline CPI, with core expected up 3.3% (vs. 2.6% and 3.3% rises respectively in October). There are also several central bank policy meetings this week (the FOMC next week on 12/17), with the Bank of Canada on 12/11 (cut expected), Swiss National Bank on 12/12, and the ECB on 12/12 (25 bps cut expected). Asian stocks finished mixed after China said it will adopt an appropriately loose monetary policy next year. The Nikkei Index rose 69 points to 39,160, the Shanghai Index was little changed at 3,402, while the Hang Seng Index surged 548 points, or 2.76% to settle at 20,414. In Europe, the German DAX is down -27 points to 20,356, while the FTSE 100 is up 25 points to 8,333. There are a few M&A reports this weekend in the news as well, details below. NVDA shares slip early after headlines China launches antitrust investigation into NVidia over alleged monopolistic practices.

• The Dow Jones Industrial Average fell -123.19 points, or 0.28%, to 44,642.52.
• The Nasdaq Composite gained 159.05 points, or 0.81%, to 19,859.77.
• The Russell 2000 Index advanced 12.83 points, or 0.54% to 2,408.99.

• 10:00 AM ET                Wholesale Inventory M/M for October

• Earnings After the Close: AI ASYS BRZE CASY GNSS HQY MDB MTN ODC ORCL PHR PL TOL YEXT

• Piper Infrastructure Software Bus Tour, 12/9-12/10, in San Francisco
• Raymond James TMT and Consumer Conference, 12/9-12/11, in New York
• UBS Global Media & Communications Conference, 12/9-12/10, in New York
• China PPI, CPI, Imports and Exports data for November

• Demand for the Federal Reserve’s overnight reverse repurchase agreement facility fell to the lowest level in more than three years as funding markets digested some $100 billion in Treasury settlements at the beginning of the week. On Friday, just 50 counterparties parked $130B at the RRP, the lowest since May 2021, from $132B prior.
• Syrian President Bashar al-Assad has fled Damascus, according to multiple reports, as rebel forces entered the capital following a stunning territorial advance over a few days. The toppling of the longtime ruler is sending shockwaves through the Middle East and will be a major blow to Russia and Iran, his main foreign backers.
• China’s consumer inflation decelerated in November, as the consumer price index rose just 0.2% from a year earlier, below expectations of 0.4%. Factory deflation extended into a 26th straight month, though the 2.5% drop in the producer price index was slower than October’s 2.9% decrease.

• Macy’s (M) shares edge higher pre mkt after activist investor Barington Capital urges co to cut spending and consider the separation of a real-estate unit, the Wall Street Journal reported. The report says Barington Capital was working with property-owner Thor Equities to build a position in co and is pushing Macy’s to consider strategic alternatives for its Bloomingdale’s and Bluemercury chains. https://tinyurl.com/3ddsz4n2

• Dow Chemicals (DOW) shares rise after agreeing to sell a 40% equity stake in some U.S. Gulf Coast infrastructure assets to a fund managed by Macquarie Asset Management for $2.4B. DOW’s new partnership with Macquarie Asset Management to be called Diamond Infrastructure Solutions and Macquarie has 6-month option to increase its equity stake to 49% within six months of deal closing.
• Trane Technologies Plc (TT) authorized a new share repurchase program of up to $5B.

• Apollo Global Management Inc. (APO) will replace Qorvo Inc. (QRVO) in the S&P 500, and Qorvo and will replace Kelly Services Inc. (KELYA) in the S&P SmallCap 600.
• Comerica Inc. (CMA) will replace Vishay Intertechnology Inc. (VSH) in the S&P MidCap 400 and Vishay will replace Comerica in the S&P SmallCap 600.
• Lazard (LAZ) downgraded to Equal Weight from Overweight at Morgan Stanley.
• Reddit (RDDT) upgraded to Overweight from Equal Weight at Morgan Stanley and raised tgt to $200 from $70 as RDDT’s engagement and advertising pipelines to drive industry leading user, time spent and ad rev growth.
• Terreno Realty Corp. (TRNO) and Champion Homes Inc. (SKY) will replace Hudson Pacific Properties Inc. (HPP) and REGENXBIO Inc. (RGNX) in the S&P SmallCap 600, respectively.

• Incyte Corp. (INCY) said its Phase 3 POD1UM-304 trial met primary endpoint of overall survival and all secondary endpoints in patients with previously untreated metastatic non-small cell lung cancer who didn’t harbor a driver mutation, according to a statement.

• Nvidia (NVDA) shares slip early after headlines China launches antitrust investigation into NVidia over alleged monopolistic practices.
• International Business Machines Corp. (IBM) and Samsung Electronics Co. (SSNLF) are set to win the bid to run the UK’s emergency services network, the Telegraph reported
• Super Micro Computer Inc. (SMCI) said Nasdaq Inc. has granted the company additional time to become compliant with listing rules, easing the near-term risk that the server maker would be delisted.
• Workday Inc. (WDAY) will replace Amentum Holdings Inc. (AMTM) in the S&P 500, and Amentum Holdings will replace Service Properties Trust (SVC) in the S&P SmallCap 600.
• President-elect Donald Trump’s transition team has invited five major tech companies, including Google, Microsoft and Meta Platforms, to a meeting in mid-December about dealing with online drug sales, according to a person with direct knowledge of the correspondence – The Information reported.