The S&P 500 Index ($SPX) (SPY) today is up +0.25%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.59%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.45%.
Stocks today are mixed, with some positive corporate news lifting the broader market. JM Smucker is up more than +6% after reporting stronger-than-expected Q2 adjusted EPS and boosting its full-year adjusted EPS forecast. Also, Eli Lilly is up more than +5% after the Biden administration proposed a rule requiring the US government to cover weight-loss drugs through the Medicare and Medicaid systems.
However, gains in stocks were limited after Trump posted on his Truth Social network that he would impose an additional 10% tariff on goods from China and 25% tariffs on all products from Mexico and Canada, promising to sign an executive order on his first day in office. Democrats responded by calling the tariffs an inflationary new sales tax on consumers. Also, Amgen is down more than -11% today to weigh on the Dow Jones Industrials.
Today’s US economic news was mixed for stocks and Fed policy, with Nov consumer confidence climbing to a 16-month high and Oct new home sales falling more than expected to a nearly 2-year low.
The US Sep S&P CoreLogic composite-20 home price index eased to 4.57% y/y from +5.21% y/y in Aug, weaker than expectations of +4.70% and the smallest annual increase in a year.
US Oct new home sales fell -17.2% m/m to a nearly 2-year low of 610,000, weaker than expectations of 725,000.
The Conference Board US Nov consumer confidence index rose +2.1 to a 16-month high of 111.7, close to expectations of 111.8.
The US Nov Richmond Fed manufacturing outlook survey was unchanged at -14, weaker than expectations of an increase to -11.
Hawkish comments today from San Francisco Fed President Daly were negative for stocks when she said, "Inflation is still printing above our 2% target, so we need to continue to work to bring that down."
Most of this week’s US economic news is front-loaded due to Thursday’s Thanksgiving Day holiday. The Nov 6-7 FOMC meeting minutes will be released later this afternoon. Wednesday will bring revised Q3 GDP (expected no change at 2.8% q/q annualized) and the Oct core PCE price index, the Fed’s preferred inflation gauge (expected +0.3% m/m and +2.8% y/y).
The markets are discounting the chances at 56% 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 -0.59%. China's Shanghai Composite Index closed down by -0.12%. Japan's Nikkei Stock 225 closed down -0.87%.
Interest Rates
December 10-year T-notes (ZNZ24) today are down -10 ticks. The 10-year T-note yield is up +3.5 bp to 4.308%. Dec T-notes are under pressure today after President-elect Trump said he would sign an executive order on his first day in office to impose an additional 10% tariff on goods from China and 25% on all products from Mexico and Canada, which could boost consumer costs and stoke inflation. Also, supply pressures are weighing on T-notes as the Treasury will auction $70 billion of reopened 5-year T-notes later today. T-notes extended their losses on hawkish comments from San Francisco Fed President Daly, who said inflation is still above target and the Fed still needs to work on bringing it down.
European government bond yields today are mixed. The 10-year German bund yield fell to a 5-week low of 2.190% and is down -0.5 bp to 2.206%. The 10-year UK gilt yield is up +2.0 bp to 4.363%.
ECB Vice President Guindos said, "If the ECB's projections are confirmed, we will continue making our monetary policy stance less restrictive."
Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 25% for a -50 bp rate cut at the same meeting.
US Stock Movers
NRG Energy (NRG) is up more than +7% to lead gainers in the S&P 500 after Jeffries upgraded the stock to buy from hold with a price target of $113.
JM Smucker (SJM) is up more than +6% after reporting Q2 adjusted EPS of $2.75, stronger than the consensus of $2.51, and boosting its full-year adjusted EPS forecast to $9.70-$101.10 from a previous forecast of $9.60-$10.00.
Eli Lilly (LLY) is up more than +5% after the Biden administration proposed a rule requiring the US government to cover weight-loss drugs through the Medicare and Medicaid systems.
United Airlines Holdings (UAL) is up more than +2% after UBS upgraded the stock to buy from neutral with a price target of $139.
Semtech (SMTC) is up more than +19% after reporting Q3 adjusted EPS of 26 cents, better than the consensus of 23 cents, and forecast Q4 adjusted EPS of 29 cents-35 cents, above the consensus of 27 cents.
Woodward (WWD) is up more than +9% after reporting Q4 net sales of $854.5 million, stronger than the consensus of $811.2 million, and forecasting 2025 net sales of $3.30 billion-$3.50 billion, the midpoint above the consensus of $3.38 billion.
Charter Communications (CHTR) is up more than +2% after BNP Paribas Exane upgraded the stock to neutral from underperform.
Analog Devices (ADI) is up more than +1% after reporting Q4 revenue of $2.44 billion, above the consensus of $2.41 billion.
Amgen (AMGN) is down more than -11% to lead losers in the S&P 500, the Dow Jones Industrials, and Nasdaq 100 after reporting that patients in an experimental trial lost about 20% of their body weight from its experimental obesity shot, disappointing investors hoping the trial would produce more weight loss.
Best Buy (BBY) is down more than -7% after reporting Q3 enterprise comparative sales fell -2.9%, weaker than the consensus of -0.92%, and lowered its full-year comparable sales forecast to 2.5% to -3.5% from a previous forecast of -1.5% to -3.0%.
General Motors (GM) is down more than -7%, and Ford Motor (F) is down more than -2% after President-elect Trump vowed to impose additional 10% tariffs on goods from China and 25% tariffs on all products from Mexico and Canada. Both carmakers import vehicles from China to the US and have factories in Canada and Mexico.
Kohl’s (KSS) is down more than -19% after reporting Q3 net sales of $3.51 billion, weaker than the consensus of $3.67 billion, and cutting its full-year comparable sales forecast to -6% to -7% from a previous forecast of -3% to -5%.
Zoom Video Communications (ZM) is down more than -7% despite reporting better-than-expected Q3 results that failed to match lofty expectations.
Morgan Stanley (MS) is down more than -2%, and Goldman Sachs (GS) is down nearly -1% after HSBC said the stocks are offering an “unattractive risk-reward profile” in the wake of the recent rally in bank stocks.
Intel (INTC) is down more than -2% after Bloomberg reported that Qualcomm’s interest in pursuing an acquisition of Intel has cooled.
Earnings Reports (11/26/2024)
Analog Devices Inc (ADI), Autodesk Inc (ADSK), Best Buy Co Inc (BBY), Burlington Stores Inc (BURL), Crowdstrike Holdings Inc (CRWD), Dell Technologies Inc (DELL), Dick's Sporting Goods Inc (DKS), HP Inc (HPQ), J M Smucker Co/The (SJM), Kohl's Corp (KSS), Nordstrom Inc (JWN), Nutanix Inc (NTNX), Workday Inc (WDAY
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.
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