The S&P 500 Index ($SPX) (SPY) Friday closed up +0.38%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.59%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.07%.
Stocks on Friday extended this week’s rally, with the S&P 500, the Dow Jones Industrials, and the Nasdaq 100 posting new all-time highs. Stocks have rallied sharply this week on speculation President-elect Trump will boost corporate profits through tax cuts and reduced regulation. Also, bond yields on Friday moved lower and supported stocks on carryover support from Thursday when the FOMC cut the federal funds rate target by 25 bp. In addition, Axon Enterprise soared more than +28% after raising its full-year revenue outlook, and Fortinet rallied more than +9% after reporting better-than-expected Q3 adjusted EPS and forecasting full-year adjusted above consensus.
Friday’s US economic news bolsters the outlook for a soft landing and was supportive of stocks after the
University of Michigan US Nov consumer sentiment index rose +2.5 to a 7-month high of 73.0, stronger than expectations of 71.0.
The University of Michigan US Nov inflation expectations report was mixed. The Nov 1-year inflation expectations eased to a 3-3/4 year low of 2.6% from 2.7% in Oct, better than expectations of no change at 2.7%. However, the Nov 5-10 year inflation expectations rose to 3.1% from 3.0% in Oct, stronger than expectations of no change at 3.0%.
Some negative corporate news limited the upside in stocks. Akamai Technologies closed down more than -14% after cutting its full-year adjusted EPS estimate. Arista Networks closed down more than -7% after forecasting fiscal 2025 revenue growth below consensus.
Of the companies in the S&P 500 that have released Q3 earnings so far, 78% surpassed estimates. According to Bloomberg Intelligence, companies in the S&P 500 are expected to report an average +4.3% y/y increase in quarterly earnings in Q3, down from the +7.9% y/y growth consensus seen in July.
The markets are discounting the chances at 65% for a -25 bp rate cut at the December 17-18 FOMC meeting.
Overseas stock markets Friday settled mixed. The Euro Stoxx 50 closed down -1.01%. China's Shanghai Composite Index fell back from a 1-month high and closed down -0.53%. Japan's Nikkei Stock 225 closed up +0.30%.
Interest Rates
December 10-year T-notes (ZNZ24) Friday closed up by +3 ticks. The 10-year T-note yield fell -1.2 bp to 4.314%. Dec T-notes Friday posted modest gains on carryover support from a rally in European government bonds. T-notes also have carryover support from Thursday when the FOMC cut the federal funds target range by -25 bp. In addition, Friday’s -2% decline in WTI crude oil prices has dampened inflation expectations, a bullish factor for T-notes.
T-notes fell back from their best levels Friday after the University of Michigan US Nov consumer sentiment index rose more than expected to a 7-month high. Also, Friday’s rally in the S&P 500 to a new record high curbed safe-haven demand for T-notes.
European government bond yields Friday moved lower. The 10-year German bund yield fell -7.8 bp to 2.367%. The 10-year UK gilt yield fell to a 1-week low of 4.415% and finished down -6.3 bp to 4.435%.
Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 17% for a -50 bp rate cut at the same meeting.
US Stock Movers
Axon Enterprise (AXON) closed up more than +28% to lead gainers in the S&P 50 after raising its full-year revenue outlook to +$2.07 billion from a previous estimate of +$2.00 billion-$2.05 billion, better than the consensus of $2.04 billion.
Insulet Corp (PODD) closed up more than +9% after reporting Q3 adjusted EPS of 90 cents, well above the consensus of 71 cents.
Fortinet (FTNT) closed up more than +9% to lead gainers in the Nasdaq 100 after reporting Q3 adjusted EPS of 63 cents, better than the consensus of 52 cents, and forecast full-year adjusted EPS of $2.20-$2.28, well above the consensus of $2.06.
Molson Coors Beverage (TAP) closed up more than +4% after Wells Fargo Securities double-upgraded the stock to overweight from underweight with a price target of $74.
Doximity (DOCS) closed up more than +34% after reporting Q2 revenue of $136.8 million, above the consensus of $127.1 million, and raising its 2025 revenue forecast to $535 million-$540 million from $514 million-$523 million, well above the consensus of $520.3 million.
Five9 Inc (FIVN) closed up more than +12% after reporting Q3 adjusted EPS of 67 cents, stronger than the consensus of 59 cents, and raising its full-year adjusted EPS forecast to $2.36-$2.38 from a prior view of $2.25-$2.29, better than the consensus of $2.27.
Upstart (UPST) closed up more than +46% after reporting Q3 adjusted loss per share of -6 cents, a smaller loss than the consensus of -14 cents.
BILL Holdings (BILL) closed up more than +17% after reporting Q1 adjusted EPS of 63 cents, better than the consensus of 50 cents, and raising its 2025 adjusted EPS forecast to $1.65-$1.83 from a previous forecast of $1.36-$1.61, stronger than the consensus of $1.55.
Expedia Group (EXPE) closed up more than +3% after reporting Q3 adjusted EPS of $6.13, stronger than the consensus of $6.10.
Akamai Technologies (AKAM) closed down more than -14% to lead losers in the S&P 500 after cutting its full-year adjusted EPS estimate to $6.31-$6.38 from a previous estimate of $6.34-$6.47.
Airbnb (ABNB) closed down more than -8% to lead losers in the Nadaq 100 after reporting Q3 EPS of $2.13, weaker than the consensus of $2.15.
Mettler-Toledo International (MTD) closed down more than -7% after forecasting Q4 adjusted EPS of $11.63-$11.78, weaker than the consensus of $11.88.
Arista Networks (ANET) closed down more than -7% after forecasting fiscal 2025 revenue growth of 15% to 17%, weaker than the consensus of 18%.
Baxter International (BAX) closed down more than -3% after cutting its full-year sales estimate to up +1% to +2% from a previous estimate of up +3%.
Pinterest (PINS) closed down more than -13% after forecasting Q4 revenue of $1.13 billion-$1.15 billion, the midpoint below the consensus of $1.15 billion.
Cloudflare (NET) closed down more than -4% after forecasting Q4 revenue of $451 million-$452 million, below the consensus of $455.6 million.
US-listed Chinese stocks were under pressure Friday after the Chinese government announced a plan to refinance local government debt but stopped short of announcing other measures to boost housing and consumption. As a result, Alibaba Group Holding (BABA), JD.com (JD), Baidu (BIDU), PDD Holdings (PDD), and NetEase (NTES) closed down more than -3%.
Earnings Reports (11/11/2024)
Aramark (ARMK), Assured Guaranty Ltd (AGO), IAC Inc (IAC), Live Nation Entertainment Inc (LYV).
More Stock Market News from Barchart
- Dollar Supported by Euro Weakness and Strong US Consumer Sentiment
- Down 16% Today, Should You Buy the Dip in Serve Robotics Stock?
- Up 69% This Week, Is IonQ Stock Overvalued?
- 1 Stock I Would Never Sell
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
/Super%20Micro%20Computer%20Inc%20HQ%20photo-by%20Tada%20Images%20via%20Shutterstock.jpg)
/Micron%20Technology%20Inc_billboard-by%20Poetra_RH%20via%20Shutterstock.jpg)
/Broadcom%20Inc%20logo%20on%20building-by%20Poetra_%20RH%20via%20Shutterstock.jpg)
