Early Look

Thursday, December 12, 2024

U.S. futures are slightly lower, pulling back after new record highs for the Nasdaq on Wednesday, topping and closing above 20,000 for the first time as shares of AAPL, AMZN, GOOGL, META, NFLX, TSLA all posted all-time intraday highs. The rally came after the November Consumer price index (CPI) inflation report boosted expectations of a Federal Reserve interest rate cut next week when they meet. The Dow Jones Industrial Average dipped, dragged by health insurers (UNH) as U.S. lawmakers introduced a bill seen as crimping their profits. Next up on the calendar today is the November producer price index (PPI) inflation report, along with weekly jobless claims.

NYSE breadth favored decliners over advancers on Wednesday, snapping a streak of 7 consecutive days of negative market breadth as five of the 11 major S&P 500 sectors advanced, led by gains in communication services, technology and consumer discretionary services. Software stocks slip overnight after ADBE issued slightly lower profit and revenue guidance (shares -10%). The dollar is down slightly while Treasury yields are edging higher (10-yr at 4.3%); gold prices down for the first day in 4 and oil steady. Markets are pricing in more than a 96% chance the Fed will cut rates by 25 basis points next week, up from an 86% chance before the data, according to CME‘s FedWatch Tool.

In Asian markets, The Nikkei Index jumped 476 points to 39,849, the Shanghai Index gained 29 points to 3,461, and the Hang Seng Index climbed 242 points to 20,397. In Europe, the German DAX is up a few points to 20,404, while the FTSE 100 is up 10 points to 8,312. European stocks were steady ahead of a European Central Bank meeting that is expected to deliver a smaller interest-rate reduction. China signaled further stimulus measures including raising its budget deficit ratio in 2025 at a key economic meeting that sets policy priorities for the coming year.

• The Dow Jones Industrial Average fell -99.27 points, or 0.22%, to 44,148.56.
• The Nasdaq Composite surged 347.65 points, or 1.77%, to 20,034.89.
• The Russell 2000 Index advanced 11.38 points, or 0.48% to 2,394.15.

• 8:30 AM ET                  Continuing Claims…est. 1.875M
• 8:30 AM ET                  Producer Price Index (PPI) headline M/M for November…est. +0.2% (prior +0.2%)
• 8:30 AM ET                  Producer Price Index (PPI) headline Y/Y for November…est. +2.6% (prior +2.4%)
• 8:30 AM ET                  Core PPI (ex: food & energy) M/M for November…est. +0.2% (prior +0.3%)
• 8:30 AM ET                  Core PPI (ex: food & energy) Y/Y for November…est. +3.2% (prior +3.1%)
• 10:30 AM ET                Weekly EIA Natural Gas Inventory Data
• 1:00 PM ET U.S. Treasury to sell $25B in 30-year notes

• Earnings After the Close: ATGN AVGO COST NX

• Oppenheimer Midwest Industrial Summit, 12/11-12/12
• Roth MKM 13th Annual Deer Valey event 12/11-12/14, in Park City, Utah
• Truist 2024 Gaming, Lodging, Leisure, Restaurants Summit, 12/12 in Boston, MA

• The Swiss National Bank cut its interest rate by an aggressive 50 bps to 0.5% from 1%, the biggest reduction in almost 10 years as it sought to stay ahead of expected cuts by other central banks.
• Global oil markets face a glut next year despite last week’s decision by OPEC+ to delay supply increases, the International Energy Agency said. OPEC lowered its demand outlook for next year once again, citing weak demand in China and the ongoing rise in non-OPEC supply. The IEA’s forecast also warned of a potential supply surplus next year, in contrast to the U.S. EIA.

• J Jill inc. (JILL) Q3 adj EPS $0.89 vs est. $0.80, adj EBITDA $26.8Mm vs est. $25.77Mm on revs $151.3Mm vs est. $151.22Mm, comps -0.8%; guides Q4 sales -6% to -4% vs 14-wk qtr last year and est. -3.39%, sees comps +1-3% vs 13-wk period yr ago, sees adj EBITDA $12-14Mm vs est. $15.18Mm.
• Kroger (KR) reiterates its commitment to lower prices and initiates new $7.5B share buyback program.
• Oxford Industries (OXM) Q3 adj EPS loss (-$0.11) vs. est. $0.09; Q3 revs $308M below consensus $316.8M; said due to the weaker than expected consumer environment before the election and Q4 Hurricane impact they have lowered our fiscal 2024 sales and EPS guidance; sees FY24 EPS $6.50-$6.70 vs. consensus $7.06.

• Steel Dynamics (STLD) and Nucor (NUE) both downgraded to Neutral from Buy in steel sector at UBS and double downgraded Commercial Metals (CMC) to Sell from Buy.

• Equifax (EFX) was upgraded to overweight from equal weight at Morgan Stanley, citing an attractive valuation and favorable regulatory environment heading into next year.
• McLennan (MMC) was upgraded to Outperform from Sector Perform at RBC Capital and raised tgt to $250 from $242 as views as a “high-quality insurance broker” with good visibility into solid sales and earnings growth.
• Robinhood (HOOD) said funded customers at the end of November were 24.8M. Assets under custody at the end of November were $195B. Net Deposits were $5.6B in November. Over the last twelve months, net deposits were $47.4B, translating to an annual growth rate of 50% relative to November 2023 AUC. Equity notional trading volumes were $147.1B. Options contracts traded were 155.5M. Crypto notional trading volumes were $35.2B.

• Keros Therapeutics (KROS) shares fall over -60% after saying it has halted dosing of 3.0 mg and 4.5 mg doses of its high blood pressure treatment in a mid-stage study due to fluid buildup around the heart; said dosing in the 1.5 mg/kg arm will continue after a risk-benefit review by an independent monitoring committee.
• As health insurers use AI to deny more claims, startups are turning to AI to make it easier to appeal denials, which often go uncontested – STAT News reports.

• Microsoft Corp. (MSFT) said it plans to take an $800 million charge after General Motors Co. said it was shutting down its autonomous taxi initiative.
• ServiceTitan (TTAN) priced its U.S. initial public offering at $71 per share, above its indicated range of $65 to $67, raising $624.8 million, the software company said.