Market Update
The S&P 500 Index was up by 0.11% today, while the Dow Jones Industrial Average saw a slight increase of 0.06%. In contrast, the Nasdaq 100 Index experienced a more noticeable rise of 0.29%. Additionally, December E-mini S&P futures rose by 0.09%, and December E-mini Nasdaq futures went up by 0.24%.
Today, U.S. stock indexes are generally up, partly due to a boost in technology stocks. Alphabet surged by 5% following Berkshire Hathaway’s $4.9 billion public offering of its stock. There’s also notable strength in chipmakers and AI infrastructure companies, which is positively impacting the overall market.
However, the upcoming earnings report from Nvidia, set to release after Wednesday’s market close, is casting a bit of a shadow on broader market gains. Furthermore, results from retailers like Walmart, Target, and Home Depot this week will likely shed light on consumer spending health. Investors are also anticipating long-overdue economic news.
Encouraging economic data helped support stock prices today, as the Empire Manufacturing General Business Survey for November unexpectedly climbed by 8.0, reaching a yearly high of 18.7. This was well above the projected decline to 5.8.
This Thursday, the Bureau of Labor Statistics will release the September employment report, followed by the September real earnings report on Friday. Last week, Economic Council Director Hassett indicated that October’s employment data would be provided without accompanying unemployment figures. The Census Bureau and the Bureau of Economic Analysis have yet to update retail sales and inflation-adjusted consumer spending figures.
Currently, the market sees a 41% chance of a 25 basis point rate cut at the upcoming FOMC meeting on December 9-10.
The third-quarter earnings season is winding down, with 460 S&P 500 companies reporting their results. According to Bloomberg Intelligence, around 82% of these firms surpassed expectations, suggesting a strong quarter, the best since 2021. Third-quarter profits increased by 14.6%, significantly higher than the year-ago forecast of 7.2%.
On a global scale, overseas stock markets are facing declines today. The Euro Stoxx50 dropped by 0.94%, while China’s Shanghai Composite fell by 0.46%, marking its lowest point in 1.5 weeks. Japan’s Nikkei Stock Average also saw a decrease, closing down by 0.10%.
Interest Rates
The December 10-year T-note rose by 2 ticks today, with the yield on the 10-year T-note dropping by 1.4 basis points to 4.135%. T-notes were slightly higher amidst expectations that long-expected U.S. economic data this week will reveal some weaknesses and lower inflationary pressures, potentially allowing the Federal Reserve to continue rate cuts. The T-note had previously fallen from its all-time high after the Empire Manufacturing Survey showed an unexpected rise in activity, which could be seen as a hawkish indicator for Fed policy.
European government bond yields are also down. The yield for German 10-year federal bonds decreased by 1.0 basis point to 2.710%, while the UK 10-year bond yield fell by 3.1 basis points to 4.543%, a decline from a one-month high of 4.589%.
The European Commission has revised its 2025 euro zone GDP forecast upward to 1.3%, up from an earlier estimate of 0.9%, keeping inflation predictions unchanged at 2.1%.
“Financial stability risks remain high due to uncertainties around geoeconomic developments and the impact of tariffs in a volatile global environment,” stated ECB Vice President Luis Deguindos.
Market swaps currently price in a 3 percentage point reduction in the likelihood of the ECB cutting interest rates by 25 basis points at its next meeting on December 18.
U.S. Securities Movement
Micron Technology saw gains of over 4% after Rosenblatt Securities lifted its price target from $250 to $300, positively impacting chipmakers and AI-related stocks. Other gainers included Western Digital, which rose more than 3%, while Seagate Technology Holdings and Lam Research saw increases of over 2%. ARM Holdings, Applied Materials, Broadcom, ASML Holding, and KLA Corp also experienced rises exceeding 1%.
Alphabet’s shares jumped over 5% after Berkshire Hathaway’s public offering made waves in the market.
Zymeworks surged by 33%, and Jazz Pharmaceuticals increased by over 18% following promising trial results for an experimental combination therapy aimed at gastric and esophageal cancer. Rubrik rose by over 1% after receiving an upgrade to Outperform from Mizuho Securities, which set a target price of $97. Gap also saw a slight lift due to Barclays raising its target from equal weight to overweight, with a new price of $30. Expeditors International gained over 1% after UBS upgraded it to Buy with a target price of $166.
On the downside, Aramark fell more than 6% after reporting fourth-quarter revenues of $5.05 billion, which missed the anticipated $5.17 billion target.
Dell Technologies led the declines in the S&P 500, dropping by more than 4% after being downgraded by Morgan Stanley from overweight to underweight, with a price target set at $110. HP Enterprises also fell by over 3%, while Sealed Air Corporation and HP Inc. dropped by more than 3% and 2%, respectively, both facing similar downgrades from Morgan Stanley.
Upcoming Earnings Reports
Scheduled for November 17 are earnings reports from Aramark, Helmerich & Payne Inc, I3 Verticals Inc, J & J Snack Foods Corp, James Hardie Industries PLC, LifeMD Inc, and XP Inc.
