Stocks Mixed on as Meta and Apple Head in Different Directions

What you need to know…

The S&P 500 Index ($SPX) (SPY) today is up +0.10%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.47%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.16%.  Stock indexes this morning are mixed.  A rally of more than +5% in Meta Platforms is positive for the overall market.  Also, M&A activity is boosting the S&P 500 after Viatris agreed to buy Oyster Point and Famy Life Sciences.  Higher T-note yields are limiting gains in stocks today, with the 10-year T-note yield up +3.4 bp at 4.192%.

Technology stocks are mixed.  A rally of more than +3% in Meta Platforms is bullish for tech stocks after the Wall Street Journal reported the company would begin laying off thousands of workers this week, thus reducing expenses and boosting profits.  Also, Okta is up more than +3% after Guggenheim Securities upgraded the stock to buy.  However, weakness in Apple is weighing on tech stocks, with Apple down more than -1% on reports it will cut its iPhone production due to weak demand. 

Today’s stock movers…

Viatris (VTRS) is up more than +14% today to lead gainers in the S&P 500 after it agreed to buy Oyster Point and Famy Life Sciences, both of which are expected to boost Viatris’s sales. 

Meta Platforms (META) is up more than +5% today to lead gainers in the Nasdaq 100 after the Wall Street Journal reported the company is planning to start cutting thousands of workers this week. 

Walgreens Boots Alliance (WBA) is up more than +2% to lead gainers in the Dow Jones Industrials after it said it would invest $3.5 billion to support VillageMD’s acquisition of Summit Health-CityMD.  As a result, Walgreens is raising its U.S. Healthcare fiscal year 2025 sales goal to $14.5 billion-$16.0 billion from a previous estimate of $11 billion-$12 billion.

Okta (OKTA) is up more than +3% after Guggenheim Securities upgraded the stock to buy, citing a “compelling” valuation.

Dominion Energy (D) is down more than -6% to lead losers in the S&P 500 after Credit Suisse downgraded the stock to neutral from outperform.

Norton LifeLock (NLOK) is down more than -6% today after Morgan Stanley cut its price target on the stock to $25 from $26.

Expedia Group (EXPE) is down more than -6% today after Susquehanna Financial cut its price target on the stock to $100 from $115. 

Atlassian Corp (TEAM) is down more than -6% at a 2-1/2 year low to lead losers in the Nasdaq 100 as the company extended last Friday’s -30% plunge after it forecasted Q2 revenue weaker than the consensus. 

Apple (AAPL) is down more than -1% today after cutting its iPhone14 production estimate by 3 million to 87 million this year, citing weaker demand and China Covid lockdowns. 

Costco Wholesale (COST) is down nearly -2% after Wells Fargo Securities downgraded the stock to equal weight from overweight.

Estee Lauder (EL) is down more than -2% after Berenberg downgraded the stock to hold from buy, saying the company lacks visibility on a potential recovery.

Across the markets…

Dec 10-year T-notes (ZNZ22) this morning are down by -8 ticks, and the 10-year T-note yield is up +3.4 bp at 4.192%.  T-note prices this morning are moderately lower on supply pressures.  About ten companies are looking to raise capital in the U.S. investment-grade primary bond market today.  In addition, the November refunding will raise supply pressures as the Treasury will auction $96 billion of T-notes and T-bonds this week, starting with a $40 billion auction of 3-year T-notes on Tuesday.

The dollar index (DXY00) this morning is down by -0.45% and fell to a 1-week low.  Strength in stocks today has curbed the liquidity demand for the dollar.  Also, strength in the euro and yen today has fueled long liquidation in the dollar.   

EUR/USD (^EURUSD) today is up by +0.37% at a 1-week high.  Better-than-expected Eurozone economic news today on Eurozone Sep industrial production and Nov Sentix investor confidence supports EUR/USD. Also, hawkish comments today from ECB Governing Council member Villeroy de Galhau were bullish for the euro when he said the ECB shouldn't stop raising interest rates until underlying inflation "has clearly peaked."

The Eurozone Nov Sentix investor confidence index rose +7.4 to -30.9, stronger than expectations of -35.0.

Eurozone Sep industrial production rose +0.6% m/m, stronger than expectations of +0.1% m/m.

USD/JPY (^USDJPY) today is down -0.16%.  Dollar weakness today has sparked some short covering in the yen.  The yen also has support on speculation that further weakness in the yen will prompt additional currency intervention from Japan in support of the yen. 

December gold (GCZ2) this morning is up +7.6 (+0.45%), and December silver (SIZ22) is up +0.241 (+1.16%).  Precious metals prices this morning are moderately higher, with silver posting to a 1-month high. Also, rising Covid infections in China are boosting safe-haven demand for precious metals after China reported 5,436 new Covid infections on Sunday, the most in 6-months.  Gold continues to be undercut by fund liquidation as long positions in gold ETF’s dropped to a new 2-1/2 year low last Friday.

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