Early Look

Friday, December 29, 2023

U.S. stock futures hover around the flat line to start the final trading of 2023, with the Spuz up about 3 points at 4,835, and looking to end the year at a new all-time, while wrapping out a whopping 9^th straight week of gains! The 10-year yield is up 4-bps to 3.88% after settling at higher Thursday and up about 6.3-bps YTD after a wide range in 2023 (52-week highs of 4.987% on 10/19 and 52-week lows of 3.285% on 4/5). After chopping up and down on Thursday, the S&P 500 closed essentially unchanged, retracing early gains as all three indexes remained on track course for monthly, quarterly, and annual gains. The S&P 500 came a few points off its record closing high of 4,796.56 reached on Jan. 3, 2022. Data released early in the day, including jobless claims, pending home sales and preliminary trade/inventories all painted a picture of a softening but resilient economy and keeps the hopes alive for sooner than expected rate cuts in 2024. In Asian markets, The Nikkei Index fell -75 points to 33,464, the Shanghai Index rose 20 points to 2,974, and the Hang Seng Index gained 3 points to 17,047. In Europe, the German DAX is up 40 points to 16,741, while the FTSE 100 is up 16 points to 7,739. With the Fed’s aggressive rate hikes cooling the U.S. labor market as well as pressuring the economy, investors have amplified their bets of rate cuts heading into 2024. As per CME’s FedWatch tool, the probability of policymakers cutting the Fed funds target rate by 25 bps in March stood at 70.1%. Going into the last trading day of 2023, the Nasdaq Composite is up 44% YTD, the S&P 500 +24.5%, the Dow Jones Industrials +13.75%, and the Russell 2000 +16.8%, while semis (SOX) up 66% YTD.

• The Dow Jones Industrial Average rose 53.58 points, or 0.14%, to 37,710.10.
• The Nasdaq Composite slipped -4.04 points, or 0.03%, to 15,095.14.
• The Russell 2000 Index declined -7.88 points, or 0.38% to 2,058.34.

• 1:00 PM EST                Baker Hughes Weekly rig count data

• Colorado puts Donald Trump back on 2024 GOP primary ballot, while Maine disqualified Donald Trump from the state ballot in next year’s U.S. presidential primary election, becoming the second state to bar the former president.

• Fisker (FSR) said it plans to increase the number of test-drive events it conducts in the US and Europe as the company has witnessed higher sales rates after the Ocean firsthand experience.

• Cigna (CI) still forecasts FY adj operating EPS at least $24.75, vs. est. $24.84; reaffirms forecast.

• Jabil Inc. (JBL) lowered Q2 revenue guidance to $6.6B-$7.2B from prior $7.0B-$7.6B view because the deal to sell its mobility business closed a month earlier than expected; guided Q2 adj EPS to $1.43-$1.83 from $1.73- $2.13 saying prior ranges provided earlier in December assumed the sale of the mobility business to BYD Electronic would close at the end of January, but closed on 12/29/24.
• JD.com (JD) says it won $141 million in damages in a years-long anti-monopoly case filed against its larger e-commerce rival Alibaba (BABA). Zhejiang Tmall Network, Zhejiang Tmall Technology and Alibaba Group were found to have abused market dominance and engaged in monopolistic practices.
• Nvidia (NVDA) to launch slower version of its gaming chip in China to comply with U.S. export controls. A product page on Nvidia’s website for Chinese consumers shows that the new Nvidia RTX 4090D has 11% fewer processing cores than versions sold outside of China – CNBC.