December S&P 500 E-Mini Futures rose slightly by +0.02%, while December NASDAQ 100 E-Mini Futures dipped down by -0.01% this morning, taking a pause after recent gains. Investors are closely watching the U.S. unemployment claims data, which will shed light on the labor market ahead of the Federal Reserve meeting next week.
Meanwhile, rising bond yields are putting pressure on stock index futures. The yield on the 10-year T-note increased by 2 basis points to 4.08% due to negative carryover, as the 10-year Japanese government bond yield hit its highest point since July 2007. This follows reports from Reuters suggesting that the Bank of Japan might raise interest rates in December, and that the Japanese government is likely to support this move.
In yesterday’s trading, Wall Street’s main stock indices closed in positive territory. Microchip Technology (MCHP) skyrocketed more than +12%, becoming the top performer in both the S&P 500 and Nasdaq 100 after it raised its third-quarter outlook. Similarly, Marvell Technology (MRVL) gained over +7% after forecasting better-than-expected growth in its data center sector for the coming year. On the other hand, American Eagle Outfitters (AEO) surged more than +15% following strong third-quarter results and an increased operating profit outlook for the fourth quarter. Conversely, Pure Storage (PSTG) plummeted over -27% after posting lower-than-expected GAAP EPS for the third quarter.
According to the ADP National Employment Report released on Wednesday, U.S. private nonfarm payrolls unexpectedly dropped by -32,000 in November, contrasting sharply with expectations of +5,000. Additionally, industrial production in the U.S. showed a +0.1% month-on-month increase for September, which met forecasts, but manufacturing production was flat, falling short of the anticipated +0.1%. The U.S. import price index also remained unchanged month-on-month, below the expected modest increase. On a more positive note, the U.S. ISM Service Index unexpectedly rose to 52.6 in November, surpassing expectations of 52.0.
Jeff Roach from LPL Financial suggested, “The Fed will likely focus on the weak labor market at its December meeting. I’ve felt since early this year, as job market weakness became apparent, that labor demand is weak enough for the Fed to consider a cut, even as soon as this month.”
In terms of interest rates, futures data shows an 89.2% chance of a 25 basis points cut at next week’s monetary policy meeting, with only a 10.8% chance that rates will remain unchanged.
Attention today centers on U.S. new jobless claims data, expected to come out in the next few hours. Economists are predicting a total of 219,000, compared to 216,000 the previous week.
Investors are also looking forward to quarterly results from companies like Kroger (KR), Hewlett Packard Enterprise (HPE), Ulta Beauty (ultra), and Dollar General (DG) today.
Additionally, Fed Vice Chair for Supervision Michelle Bowman is slated to speak at the Florida Bankers Association Leadership Luncheon later today. Given the Fed’s blackout period preceding the Dec. 9-10 policy meeting, she’s likely to steer clear of comments related to economic outlook or monetary policy.
In the bond market, the benchmark 10-year U.S. Treasury yield climbed +0.54% to 4.080%.
The Euro Stoxx 50 index gained +0.39% this morning, reflecting a heightened risk appetite amidst expectations of Fed interest rate cuts next week. Auto stocks led the rally after President Trump proposed relaxing fuel efficiency standards. Bank of America upgraded its outlook for auto manufacturers like Mercedes-Benz Group AG and Porsche SE. Meanwhile, industrial stocks also saw gains, with Schneider Electric SE (SU.FP) and Siemens Energy AG (ENR.D.DX) both rising over +2% after JPMorgan upgraded their ratings. Semiconductor stocks also advanced, buoyed by news of Chinese chipmaker Cambricon’s plans to significantly increase chip production, a move that could boost demand for chip equipment and materials. However, utility and healthcare stocks lagged behind. In contrast, Eurostat data indicated that monthly retail sales in the eurozone remained flat in October, suggesting caution among households regarding spending. The situation in Ukraine remains in focus, as U.S. President Trump’s special envoy and son-in-law Jared Kushner are expected to meet with Ukraine’s chief negotiator, Rustem Umerov, in Florida later today. Additionally, Kon.Philips NV (Fianna) dropped over -8% after analysts at Citigroup pointed to tariffs and challenges in China for 2026.
Today’s Eurozone retail sales data showed an increase, with October sales rising +1.5% month-on-month and remaining unchanged month-on-month, compared to a forecast of +1.4% year-on-year and no change month-on-month.
Asian markets were a mixed bag today. China’s Shanghai Composite Index (SHCOMP) finished slightly down at -0.06%, while Japan’s Nikkei 225 (NIK) saw a jump of +2.33%.
The Shanghai Composite succumbed to a slight decline, registering its lowest level in a week amid a lack of market catalysts. Alcohol and consumer stocks showed weakness on Thursday, though semiconductor and AI-related stocks gained ground. Investors are awaiting further clarity from the upcoming Politburo meeting and Central Economic Work Conference later this month where Chinese leaders are likely to detail key policy priorities for 2026, which might hint at additional stimulus. Some analysts believe that China will keep its annual economic growth target around 5% for next year, prompting continued fiscal and monetary support to counter deflationary pressures. Nomura analysts anticipate an emphasis on fiscal expansion over conventional monetary policy to tackle the ongoing economic challenges, projecting tightened fiscal measures by spring 2026. In a positive note, Fitch Ratings raised its 2025 growth forecast for China to 4.8%, while maintaining a 4.1% expectation for 2026. In corporate news, Innoscience (Suzhou) Technology saw shares increase by approximately +5% in Hong Kong after forming a strategic partnership with ON Semiconductor.
Japan’s Nikkei 225 index climbed significantly today, achieving a three-week high. Industrial robot sectors drove much of this uptick as optimism grows around the potential of physical AI. The renewed interest in this area followed Fanuc’s announcement that it would team up with Nvidia to enhance industrial robots through AI technology, leading to some market analysts suggesting a shift in investor focus towards robotics. Additionally, buoyed by positive earnings in the prior session on Wall Street, Japanese stocks enjoyed further support. Concurrently, a government bond auction saw strong demand, the best since 2019, hinting at renewed investor interest as yields rise, lending a bit of comfort as markets brace for potential interest rate hikes from the Bank of Japan. Governor Kazuo Ueda mentioned that it’s uncertain how much further rates can go because estimating Japan’s neutral interest rate is challenging. Recent Treasury data shows foreign investors purchased ¥655.6 billion ($4.22 billion) in Japanese stocks over the week ending November 29, primarily favoring tech stocks on expectations of Federal rate cuts. The Nikkei Volatility Index, reflecting the implied volatility of its options, increased by +1.52% to close at 28.12.
Premarket U.S. Stock Movements
In premarket trading, UiPath (PATH) jumped more than +8% after reporting solid third-quarter results and giving optimistic fourth-quarter guidance. Salesforce (CRM) climbed over +1% following a better-than-expected third-quarter adjusted EPS and raised full-year outlook. Metaplatform (META) saw a gain of around +0.8% after Arete upgraded its stock to “Buy from Neutral,” setting a price target of $718. On the downside, Snowflake (SNOW) fell over -8% in premarket trading after disappointing product revenue guidance for the fourth quarter. PayPal Holdings (PYPL) slipped by more than 1% after a downgrade from overweight to neutral by JPMorgan.
Today’s U.S. Earnings Spotlight: Thursday through December 4th
Key earnings reports today include those from Toronto-Dominion Bank (TD), Bank of Montreal (BMO), Canadian Imperial Bank (CM), Kroger (KR), Hewlett-Packard (HPE), Dollar General (DG), Samsara (IOT), Cooper (COO), Brown-Forman A (BFa), DocuSign (DOCU), Rubrik (RBRK), Hormel Foods (HRL), Donaldson (DCI), Service Titan (TTAN), BETA Technologies (BETA), SentinelOne (S), BRP Inc (DOOO), Argan (AGX), Science Applications (SAIC), John Wiley & Sons (WLY), Up Fintech (TIGR), IDT (IDT), REX American Resources (REX), Hovnanian Enterprises (HOV), Build-A-Bear Workshop (BBW), Stitch Fix (SFIX), Domo (DOMO), Zumiez (ZUMZ), Smith & Wesson (SWBI), Genesco (GCO), and America’s Car Mart (CRMT).
