The S&P 500 Index ($SPX) (SPY) today is up +0.43%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.01%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.91%.
Stocks today are mostly higher on some positive corporate news. Tesla is up more than +8% after Bloomberg reported that President-elect Trump’s transition team members have told advisers they plan to make a federal framework for fully self-driving vehicles one of the Transportation Department’s priorities. Also, Advance Micro Devices is up more than +3% after IBM reported it entered into a pact with the company to supply it with MI300x accelerator chips for its cloud network.
Higher bond yields today are limiting the upside in stocks, with the 10-year T-note yield up +1.2 bp today to 4.451%, just below last Friday’s 5-1/2 month high of 4.501%, on anxiety that President-elect Trump’s isolationist policies will revive inflation and deter interest rate cuts from the Fed. Also, the Dow Jones Industrials fell to a 1-1/2 week low, with Nike down more than -3% after TD Cowen cut its price target on the stock, saying they are more cautious about the company’s business after meeting with channel contacts and fieldwork.
Today’s US economic news showed the Nov NAHB housing market index unexpectedly rose +3 to a 7-month high of 46, stronger than expectations of a decline to 42.
The markets will look for news on US Oct housing starts and building permits on Tuesday for direction. Also, the quarterly earnings results from Walmart and Lowe’s will be scoured on Tuesday to see if consumer spending continues to hold up. On Wednesday, the markets will look to earnings results from Nvidia to see if future demand for its AI Blackwell chips will continue after reports said Nvidia has asked suppliers to change the design of the server racks for its new Blackwell graphics processing unit due to an overheating problem.
Of the 90% of companies in the S&P 500 that have released Q3 earnings so far, 75% surpassed the estimates, slightly below the 3-year average. According to Bloomberg Intelligence, companies in the S&P 500 have reported an average +8.5% y/y increase in quarterly earnings in Q3, more than double the preseason forecast.
The markets are discounting the chances at 62% for a -25 bp rate cut at the December 17-18 FOMC meeting.
Overseas stock markets today are lower. The Euro Stoxx 50 is down -0.40%. China's Shanghai Composite Index fell to a 1-1/2 week low and closed down -0.21%. Japan's Nikkei Stock 225 dropped to a 2-week low and closed down -1.09%.
Interest Rates
December 10-year T-notes (ZNZ24) today are down -4 ticks. The 10-year T-note yield is up +1.2 bp to 4.451%. T-notes are moderately lower today on carryover pressure from weakness in European government bonds. Also, today’s unexpected increase in the US NAHB Nov house market index t a 7-month high was hawkish for Fed policy and bearish for T-notes. In addition, concern that President-elect Trump’s isolationist policies will revive inflation and deter interest rate cuts from the Fed is weighing on T-note prices.
European government bond yields today are moving higher. The 10-year German bund yield is up +2.7 bp to 2.383%. The 10-year UK gilt yield is up +0.6 bp to 4.477%.
ECB Governing Council member and Bundesbank President Nagel said if international tensions should intensify, this could lead to greater inflationary pressures or increased volatility in consumer-price growth, and central banks might have to react with higher interest rates.
Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 19% for a -50 bp rate cut at the same meeting.
US Stock Movers
Super Micro Computer (SMCI) is up more than +12% to lead gainers in the S&P 500 and Nasdaq 100 ahead of a deadline for the company to either file a delayed 10-K annual report or submit a plan to file the form to Nasdaq to remain listed on the exchange.
Tesla (TSLA) is up more than +8% after Bloomberg reported that President-elect Trump’s transition team members have told advisers they plan to make a federal framework for fully self-driving vehicles one of the Transportation Department’s priorities.
Advanced Micro Devices (AMD) is up more than +3% after IBM reported it entered into a pact with the company to supply it with MI300x accelerator chips for its cloud network.
Dell Technologies (DELL) is up more than +4% after Mizuho Securities raised its price target on the stock to $155 from $135.
Moderna (MRNA) is up more than 3% after HSBC upgraded the stock to buy from hold with a price target of $58.
Shift4 Payments (FOUR) is up more than +5% after S&P Dow Jones Indices said the company will replace R1 RCM in the S&P MidCap 400 Index prior to the opening of trading on November 20.
Newmont (NEM) is up more than +2% after it agreed to sell its Musselwhite operation to Orla Mining Ltd for $850 million.
Hewlett Packard Enterprise (HPE) is up more than +2% after Raymond James upgraded the stock to strong buy from outperform with a price target of $29.
Nvidia (NVDA) is down more than -1% after the Information reported the company had asked its suppliers to change the design of the server racks for its new Blackwell graphics processing unit due to an overheating problem.
Palantir Technologies (PLTR) is down more than -6% to lead losers in the S&P 500 on signs of insider selling after an SEC filing showed founder Karp sold $3.99 million of shares from last Wednesday to last Friday.
Nike (NKE) is down more than -3% to lead losers in the Dow Jones Industrials after TD Cowen cut its price target on the stock to $73 from $78, saying they are more cautious on the company’s business after meeting with channel contacts and fieldwork.
Neurogene (NGNE) is down more than -40% after it paused the use of the higher 3E15 vg dose of its NGN-401 for treating Rett syndrome.
IQVIA Holdings (IQV) is down more than -2% after Mizuho Securities cut its price target on the stock to $247 from $277.
Biogen (BIIB) is down more than -1% after Needham downgraded the stock to hold from buy, saying it does not see a “meaningful source of upside” for the stock in the next 12 months.
Charles River Laboratories International (CRL) is down more than -1% after CLSA downgraded the stock to underperform from hold with a price target of $164.
Earnings Reports (11/18/2024)
AECOM (ACM), BellRing Brands Inc (BRBR), Bit Digital Inc (BTBT), Critical Metals Corp (CRML), I3 Verticals Inc (IIIV), Mondee Holdings Inc (MOND), Twist Bioscience Corp (TWST).
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.
