Stocks Settle Mixed in Holiday-Shortened Session

What you need to know…

The S&P 500 Index ($SPX) (SPY) on Friday fell -0.03%, the Dow Jones Industrials Index ($DOWI) (DIA) rose +0.45%, and the Nasdaq 100 Index ($IUXX) (QQQ) fell -0.70%.  

Stocks on Friday settled mixed in the holiday-shortened session, with the Dow Jones Industrials posting a 7-month high.  M&A activity supported stocks Friday after Coupa Software rallied more than +6% when Bloomberg reported that Vista Equity Partners is exploring an acquisition of the company.  Also, managed healthcare stocks rose Friday as defensive stocks saw some support. 

Global stock markets Friday saw support from new Chinese stimulus measures after the People’s Bank of China reduced the reserve requirement ratio for most banks by -25 bp to 11.00% from 11.25%, effective Dec 5.

Technology stocks were weaker Friday and pressured the overall market. Apple closed down nearly -2% after Chinese authorities locked down the city of Zhengzhou, home to Apple's largest iPhone manufacturing site, for five days starting Friday due to surging Covid cases.  Also, Reuters reported that Apple’s iPhone production in November at the Zhengzhou plant could fall -30% after worker protests at the plant disrupted operations. 

In addition, a fall of more than -4% in Activision Blizzard weighed on tech stocks Friday after Politico reported that the US Federal Trade Commission is likely to file an antitrust lawsuit to block Microsoft’s $69 billion deal to buy the company.

Another bearish factor for global stocks is the continued surge in Chinese Covid infections after China reported a record 31,9874 new Covid infections on Thursday.  The rise in infections dampens optimism that China’s economy may soon fully reopen as the government is forced to expand lockdowns and pandemic restrictions. 

Today’s stock movers…

Managed healthcare stocks rose Friday as defensive stocks saw some support.  Molina Healthcare (MOH) and Universal Health Services (UHS) closed up more than +2%.  Also, UnitedHealth Group (UNH), Cigna (CI), Centene (CNC), Elevance Health (ELV), and HCA Healthcare (HCA) closed up more than +1%.

Autodesk (ADSK) closed up more than +1% Friday to lead gainers in the Nasdaq 100 after Bloomberg data showed the Fidelity Magellan Fund added 1.91 million shares of Autodesk in September.

Boston Properties (BXP) closed up more than +2% after data from Bloomberg showed the Cullen High Dividend Equity Fund added 174,347 shares of Boston Properties in Q3.

Apple (AAPL) closed down nearly -2% Friday to lead losers in the Dow Jones Industrials after the Chinese government said it would lock down the city of Zhengzhou, home to Apple's largest iPhone manufacturing site, for five days starting Friday due to surging Covid cases.  Also, a report from Reuters said that Apple’s iPhone production in November at the Zhengzhou plant could fall -30% after worker protests at the plant disrupted operations.

Activision Blizzard (ATVI) closed down more than -4% to lead losers in the S&P 500 after Politico reported that the US Federal Trade Commission is likely to file an antitrust lawsuit to block Microsoft’s $69 billion deal to buy the company.

Albemarle (ALB) closed down more than -3% on concerns lithium production in Chile could be hampered by the ongoing trucker strike in the country. Albemarle is the world’s biggest lithium producer, the key ingredient in modern batteries.

U.S.-listed Chinese stocks retreated as record new Covid cases in China dampen optimism that the country will reopen soon. JD.com (JD) closed down more than -5% to lead losers in the Nasdaq 100.  Also, Alibaba Group Holding (BABA) and Baidu (BIDU) closed down more than -3%. In addition, Pinduoduo (PDD) and NetEase (NTES) closed down by more than -1%.

Across the markets…

Dec 10-year T-notes (ZNZ22) Friday closed up +2.5 ticks, and the 10-year T-note yield fell -0.1 bp to 3.692%.  T-note prices Friday recovered from early losses and moved slightly higher in the holiday-shortened session on carry-over support from Wednesday’s minutes of the Nov 1-2 FOMC meeting that showed policymakers favored slowing interest rate increases.  T-notes Friday initially moved lower on negative carry-over from a jump in European government bond yields.  The 10-year German bund yield rose +12.4 bp to 1.974%, and 10-year UK gilt yield rose 8.5 bp to 3.122%. 

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