Market Update
The S&P 500 Index, along with the Dow Jones Industrial Average, saw modest gains today, up +0.45% and +0.44% respectively. Meanwhile, the Nasdaq 100 Index outperformed with a rise of +0.93%. Specifically, December E-mini S&P futures climbed +0.45%, while December E-mini Nasdaq futures increased by +1.02%.
Stock indices are seeing an upward trend, especially the Nasdaq 100, which has reached a 1.5-week high. A notable boost is coming from semiconductor stocks, propelling the wider market rally. Companies like MongoDB experienced significant gains, up over +24% after an impressive Q3 earnings report. Similarly, Credo Technology Group Holding also rose more than +15% following a positive Q2 earnings surprise. Moreover, Boeing’s shares surged over 8% after the CFO indicated anticipated positive free cash flow for the upcoming year.
However, rising bond yields may temper stock market gains, with the yield on the 10-year T-note hitting a 1.5-week high of 4.11%.
The OECD has maintained its global GDP forecast for 2025 at +3.2. However, it has revised upward the U.S. forecast from +1.8% to +2.0%, and for the euro area from +1.2% to +1.3%. The organization attributes this resilience in the global economy, particularly in dealing with trade tariffs, to robust investments in artificial intelligence along with supportive fiscal and monetary policies.
This week, market participants are keenly focused on U.S. economic data. On Wednesday, ADP is expected to report an increase of +10,000 jobs in November. In addition, a +0.1% rise in manufacturing production for September is anticipated, while the ISM service index may dip to 52.0. New weekly jobless claims are projected to rise by +6,000 to 222,000. By Friday, personal spending and income for September are both expected to grow modestly by +0.3%. Moreover, the September core PCE price index, a key inflation measure for the Fed, is predicted to increase +0.2% month-over-month and +2.8% year-over-year. Lastly, the University of Michigan Consumer Confidence Index for December is projected to rise +1.0 to 52.0.
The market is currently pricing in a 92% probability that the next FOMC meeting on December 9-10 will result in a further 25 basis point cut.
As the third-quarter corporate earnings season wraps up, results from 475 S&P 500 companies show that 83% exceeded expectations, marking their best performance since 2021. Profit growth for the third quarter was +14.6%, significantly surpassing the +7.2% year-over-year forecast.
International stock markets displayed a mixed performance today. The Euro Stoxx 50 climbed to a two-week high, gaining +0.51%, while China’s Shanghai Composite fell -0.42%. Japan’s Nikkei ended the day flat.
In the bond markets, the March 10th T Note fell -2 ticks, while the yield on the 10-year T-note increased by 1.2 basis points to 4.098%. The March T-note saw declines as it hit a 1.5-week low. European government bond yields are on the rise as well; German 10-year bonds reached a two-month high.
Inflation continues to be a concern, with Eurozone November CPI rising +2.2% year-over-year, slightly above expectations. The core CPI remains steady at +2.4% YoY.
In the U.S., strong semiconductor stocks are driving market momentum. Intel led Nasdaq 100 gainers with a +7% increase, while other major players like NXP Semiconductors and KLA Corp also posted gains. Conversely, energy sector weaknesses are pulling the market down, with Baker Hughes leading declines among major stocks.
MongoDB reported third-quarter revenue of $628.3 million, significantly surpassing expectations, and raised its revenue outlook. Similarly, Credo Technology Group had a robust performance exceeding earnings estimates.
Boeing also saw a substantial rise, attributing confidence to anticipated positive cash flow. Other stock movements included Teradyne’s rise following an upgrade, as well as Cloudflare and OneStream benefiting from positive coverage.
On the flip side, Six Flags and Dexcom saw gains after receiving upgrades, whereas Procter & Gamble led declines in the Dow after warnings about consumer weakness.
Upcoming earnings reports to watch include those from companies like Crowdstrike and Gitlab.
