The S&P 500 Index ($SPX) (SPY) today is down -0.13%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.02%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.12%.
Stocks today are slightly lower with the markets awaiting US inflation news this week for direction. Higher T-note yields today are weighing on stocks along with heightened geopolitical risks in the Middle East after rebels toppled Bashar Al-Assad’s government in Syria, which could lead to a power vacuum in the country as various militias and factions vie for control.
On the positive side for stocks is an increase in M&A Activity after Omnicron Group agreed to buy Interpublic Group in a deal valued at $13.3 billion, excluding debt. Also, Super Micro Computer is up more than +5% after Nasdaq granted the company until February 25 to file its financial report for the fiscal year ended June 30 and its quarterly report for results in the period ended September 30.
The markets are looking toward Wednesday’s US consumer price report for November to see if the pace of consumer prices can allow the Fed to keep easing monetary policy. Nov CPI is expected to tick up slightly to +2.7% y/y from +2.6% y/y in Oct. Meanwhile, Nov CPI ex-food and energy is expected to remain unchanged from Oct at +3.3% y/y.
Global equity markets received a boost today from a shift in Chinese monetary policy. The Chinese Politburo, the ruling Communist Party’s most senior 24 officials led by President Xi Jinping, announced today that it would embrace a "moderately loose" strategy for monetary policy next year and vowed to be "more proactive" on fiscal policy, a sign of further easing ahead. The Politburo also made direct pledges to "stabilize property and stock markets" and promised "extraordinary" counter-cyclical policy adjustments to boost the economy.
The markets are discounting the chances at 87% for a -25 bp rate cut at the December 17-18 FOMC meeting.
Overseas stock markets today are mixed. The Euro Stoxx 50 rose to a 1-3/4 month high and is up +0.33%. China's Shanghai Composite Index fell from a 3-week high and closed down -0.05%. Japan's Nikkei Stock 225 closed up +0.18%.
Interest Rates
March 10-year T-notes (ZNH25) today are down -5 ticks. The 10-year T-note yield is up +1.5 bp to 4.168%. Today’s +1% jump in WTI crude oil prices has boosted inflation expectations and is bearish for T-note prices. Also, supply pressures are weighing on T-note prices as the Treasury will auction $119 billion of reopened T-notes and T-bonds this week, beginning with Tuesday’s $58 billion auction of 3-year T-notes. Losses in T-notes are contained by carryover strength from European government bond prices.
European government bond yields today moved lower. The 10-year German bund yield is down -1.3 bp to 2.094%. The 10-year UK gilt yield is down -3.4 bp to 4.241%.
The Eurozone Dec Sentix investor confidence index unexpectedly fell -4.7 to a 13-month low of -17.5, weaker than expectations of an increase to -12.3.
Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 11% for a -50 bp rate cut at the same meeting.
US Stock Movers
Nvidia (NVDA) is down more than -2% to lead losers in the Dow Jones Industrials after China Central Television reported that China’s State Administration for Market Regulation opened a probe into the company over suspicions that it has broken anti-monopoly laws.
Omicron Group (OMC) is down more than -5% after acquiring Interpublic Group in a deal valued at $13.3 billion, excluding debt.
Advanced Micro Devices (AMD) is down more than -3% after Bank of America Global Research downgraded the stock to neutral from buy, citing downside risks to the company’s 2025 expectations.
Sofi Technologies (SOFI) is down more than -4% after Bank of America Global Research downgraded the stock to underperform from neutral with a price target of $12.
BioAge Labs (BIOA) is down more than -75% after it discontinued a Phase-2 trial evaluating its azelaprag drug for the treatment of obesity.
Arthur J Gallagher (AJG) is down more than -1% after announcing an underwritten public offering of $8.65 billion of its common stock.
Houlihan Lokey (HLI) is down more than -1% after Morgan Stanley downgraded the stock to underweight from equal weight.
Interpublic Group (IPG) is up more than +14% after Omnicom Group acquired the company in a deal valued at $13.3 billion, excluding debt.
Super Micro Computer (SMCI) is up more than +5% after Nasdaq granted the company until February 25 to file its financial report for the fiscal year ended June 30, as well as its quarterly report for results in the period ended September 30.
Workday (WDAY) is up more than +7% after S&P Dow Jones Indices announced the stock will replace Amentum Holdings in the S&P 500 before trading on December 23.
Apollo Global Management (APO) is up more than +3% after S&P Dow Jones Indices announced the stock will replace Qorvo in the S&P 500 before trading on December 23.
US-listed Chinese stocks are climbing today after China’s top leaders signaled further stimulus ahead. As a result, PDD Holdings (PDD) is up more than +11% to lead gainers in the Nasdaq 100. Also, Alibaba Group Holdings (BABA), Baidu (BIDU), and NetEase (NTES) are up more than +7%.
Arcellx (ACLX) is up more than +3% after it gave data from a mid-stage trial of its experimental therapy for a form of blood cancer, which Baird said appears to support “best-in-class” efficacy for the drug.
Macy’s (M) is up more than +3% after the Wall Street Journal reported that activist investor Barington Capital has built a position in the company and plans to push for changes, including the establishment of a separate real estate unit.
Earnings Reports (12/9/2024)
Casey's General Stores Inc (CASY), MongoDB Inc (MDB), Oracle Corp (ORCL), Toll Brothers Inc (TOL), and Vail Resorts Inc (MTN).
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.
/AI%20(artificial%20intelligence)/AI%20microchip%20by%20DesignKingBD360%20via%20Shutterstock.jpg)
/2d%20illustration%20of%20Cloud%20computing%20by%20Blackboard%20via%20Shutterstock.jpg)
/Dominos%20Pizza%20Inc%20storefront%20by-KathyDewar%20via%20iStock.jpg)