Stocks Mixed Before Oct Core PCE Report

The S&P 500 Index ($SPX) (SPY) today is down -0.15%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.16%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.61%.

Stocks today are mixed, with the Dow Jones Industrials posting a new all-time high.  Some negative corporate news is weighing on the broader market.  Symbotic is down more than -33% after saying it is unable to file its annual Form 10-K for the fiscal year ended September 28, 2024, on time because it needs to assess the financial impacts of an error related to system revenue recognition.  Also, Dell Technologies is down more than -12% after reporting weaker-than-expected Q3 total net revenue.

However, stocks found support on mixed US economic news that knocked T-note yields lower, as the 10-year T-note yield fell to a 3-week low.  Oct capital goods orders nondefense ex-aircraft and parts, a proxy for capital spending, unexpectedly fell, and Q3 GDP personal consumption was revised lower. Weekly jobless claims news was mixed as initial unemployment claims unexpectedly fell to a 7-month low, but continuing claims unexpectedly rose to a 3-year high.

US MBA mortgage applications rose +6.3% in the week ended November 22, with the purchase mortgage sub-index up +12.4% and the refinancing sub-index down -2.6%.  The average 30-year fixed rate mortgage fell -4 bp to 6.86% from 6.90% in the prior week. 

US Q3 GDP was unrevised at 2.8% (q/q annualized), right on expectations, although Q3 personal consumption was revised downward by -0.2 to 3.5% from 3.7%.

US Oct capital goods orders nondefense ex-aircraft and parts, a proxy for capital spending, unexpectedly fell -0.2% m/m, weaker than expectations of a +0.1% m/m increase. 

US weekly initial unemployment claims unexpectedly fell -2,000 to a 7-month low of 213,000, showing a stronger labor market than expectations of 215,000.  However, weekly continuing claims unexpectedly rose +9,000 to a 3-year high of 1.907 million, showing a weaker labor market than expectations of a decline to 1.892 million.

The markets are discounting the chances at 67% for a -25 bp rate cut at the December 17-18 FOMC meeting.

Overseas stock markets today are mixed.  The Euro Stoxx 50 is down -0.72%.  China's Shanghai Composite Index recovered from a 5-week low and closed up by +1.53%.  Japan's Nikkei Stock 225 closed down -0.80%.

Interest Rates

December 10-year T-notes (ZNZ24) today are up +11 ticks.  The 10-year T-note yield is down -5.8 bp to 4.248%.  Dec T-notes today rose to a 3-1/2 week high, and the 10-year T-note yield fell to a 3-1/2 week low of 4.240%.  T-notes are climbing today on carryover support from strength in European government bonds.  Also, a downward revision to the US Q3 core PCE price index was supportive of T-notes.  Supply pressures may limit further gains in T-notes as the Treasury will auction $44 billion of 7-year T-notes this afternoon. 

European government bond yields today are moving lower.  The 10-year German bund yield fell to a 1-3/4 month low of 2.135% and is down -2.2 bp to 2.164%.  The 10-year UK gilt yield fell to a 4-week low of 4.291% and is down -5.9 bp to 4.294%.

The German Dec GfK consumer confidence index fell -4.9 to a 7-month low of -23.3, weaker than expectations of -18.8.

ECB Executive Board member Schnabel said the ECB needs to be wary of cutting interest rates too far as borrowing costs are already near the neutral threshold, and going lower could backfire.

Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 29% for a -50 bp rate cut at the same meeting.

US Stock Movers

Dell Technologies (DELL) is down more than -12% to lead losers in the S&P 500 after reporting Q3 total net revenue of $24.37 billion, weaker than the consensus of $24.59 billion. 

Workday (WDAY) is down more than -10% to lead losers in the Nasdaq 100 after cutting its 2025 subscription revenue estimate to $7.70 billion from a previous estimate of $7.70 billion-$7.73 billion, weaker than the consensus of $7.72 billion. 

HP Inc (HPQ) is down more than -8% after forecasting Q1 adjusted EPS of 70 cents-76 cents, below the consensus of 86 cents. 

Autodesk (ADSK) is down more than -6% after reporting Q3 adjusted operating margin of 36.0%, below the consensus of 36.1%. 

Symbotic (SYM) is down more than -33% after saying it is unable to file its annual Form 10-K for the fiscal year ended September 28, 2024, on time because it needs to assess the financial impacts of an error related to system revenue recognition. 

Guess?  (GES) is down more than -12% after reporting Q3 net revenue of $738.5 million, weaker than the consensus of $749.5 million, and cutting its 2024 revenue estimate in dollars to +7.1% to +8.1% from a previous estimate of +9.5% to +11%. 

Crowdstrike Holdings (CRWD) is down more than -4% after forecasting Q4 adjusted EPS of 84 cents-86 cents, weaker than the consensus of 87 cents. 

Ambarella (AMBA) is up more than +13% after reporting Q3 adjusted EPS of 11 cents, well above the consensus of 4 cents. 

Urban Outfitters (URBN) is up more than +13% after reporting Q3 net sales of $1.36 billion, above the consensus of $1.33 billion. 

Dick’s Sporting Goods (DKS) is up more than +3% after UNS upgraded the stock to buy from neutral with a price target of $260. 

UnitedHealth Group (UNH) is up more than +1% to lead gainers in the Dow Jones Industrials after RBC Capital Markets raised its price target on the stock to $655 from $595.

Paramount Global (PARA) is up more than +1% after CFRA upgraded the stock to buy from hold with a price target of $13.

Earnings Reports (11/27/2024)

Anavex Life Sciences Corp (AVXL), Dakota Gold Corp (DC), Golden Ocean Group Ltd (GOGL), Immersion Corp (IMMR).