U.S. Markets Close Higher Amid Economic News and Sector Variability
The S&P 500 Index ($SPX) (SPY) closed Monday up +0.30%, the Dow Jones Industrials Index ($DOWI) (DIA) gained +0.99%, while the Nasdaq 100 Index ($IUXX) (QQQ) saw an increase of +0.14%.
Market Highlights
On Monday, stocks increased with the S&P 500 and Dow Jones Industrials reaching all-time highs, while the Nasdaq 100 hit a one-week peak. Investor sentiment surged as expectations grew that President-elect Trump’s selection of Scott Bessent, a former hedge fund manager, for U.S. Treasury Secretary would influence a more market-friendly agenda. Bessent has expressed support for Trump’s policies but is viewed as a fiscal hawk focused on stabilizing the economy and managing deficits.
Sector Struggles
Weakness in energy stocks curbed overall market gains. WTI crude prices dropped by over -3%, and Nvidia faced a -4% decline, negatively impacting technology stocks.
Economic Data Overview
Recent U.S. economic data fell short of expectations, affecting market moods. The October Chicago Fed national activity index fell -0.13 to a nine-month low of -0.40, which was below the anticipated -0.28. Additionally, the November Dallas Fed manufacturing outlook improved slightly by +0.3 to -2.7 but was still weaker than the -1.8 estimate.
Upcoming Economic Reports
This week’s economic reports are arriving early due to the Thanksgiving holiday on Thursday. Tuesday’s schedule includes October new home sales, expected to decrease by -1.8% month-over-month to 725,000, along with the Conference Board’s November consumer confidence index, forecasted to rise +3.1 to 111.8. The minutes from the FOMC meeting held earlier in November will also be released on Tuesday. On Wednesday, revised Q3 GDP figures are predicted to remain steady at 2.8% year-over-year, along with the October core PCE price index.
Interest Rate Expectations
Currently, markets estimate a 53% chance of a -25 basis point rate cut during the FOMC meeting on December 17-18.
Global Market Performance
International markets exhibited mixed results on Monday. The Euro Stoxx 50 increased, closing up +0.23%, while China’s Shanghai Composite fell to a five-week low, down by -0.11%. Japan’s Nikkei Stock 225 gained +1.30%, achieving a week-high close.
Bond Market Update
In the bond market, December 10-year T-notes (ZNZ24) closed higher, gaining +28.5 ticks. The 10-year T-note yield decreased by -13.1 basis points to 4.269%. Bonds rallied after Bessent’s nomination was announced, with investors viewing him as an advocate for fiscal responsibility. T-notes also benefited from dropping inflation expectations marked by a fall in the 10-year breakeven inflation rate to 2.295%, its lowest in two and a half weeks.
European bond yields decreased as well, with the 10-year German bund yield dropping to a five-week low of 2.210%. The 10-year UK gilt yield fell to 4.343%, down -4.2 basis points.
U.S. Stock Movers
Homebuilding stocks surged on Monday following a decline in the 10-year T-note yield, which implies lower mortgage rates. Toll Brothers (TOL), Lennar (LEN), and PulteGroup (PHM) all saw gains of over +6%, while Builders FirstSource (BLDR) and DR Horton (DHI) rose more than +5%.
Super Micro Computer (SMCI) led the day with an impressive gain of more than +15%, adding to a 25% jump over recent sessions. This increase followed news that they expect to file their delayed reports under Nasdaq’s rules. Meanwhile, Sally Beauty Holdings (SBH) saw over +8% growth as TD Cowen upgraded the stock with a target price of $16.
Moderna (MRNA) rose by more than +6% following commentary from Jeffries that the nomination of Robert F. Kennedy Jr. to a health position wouldn’t likely impact vaccine policies. The healthcare sector overall performed strongly, with stocks such as UnitedHealth Group (UNH), Humana (HUM), and Centene (CNC) displaying gains of over +1% after a favorable court ruling.
Bath & Body Works (BBWI) surged more than +16% after recording Q3 net sales of $1.61 billion, surpassing the $1.58 billion consensus forecast, and slightly raising its 2025 sales outlook.
Several companies faced downturns. Nvidia (NVDA) dropped over -4% after Amazon’s announcement regarding its own AI chip development. Defense stocks, including Lockheed Martin (LMT) and L3Harris Technologies (LHX), declined by more than -3% on news of a possible cease-fire between Israel and Hezbollah.
Energy stocks retreated significantly following a drop in WTI crude oil prices exceeding -3%, with ConocoPhillips (COP) closing down over -5% and several others, including Devon Energy (DVN) and Occidental Petroleum (OXY), losing more than -2%.
Macy’s (M) fell more than -2% after announcing a delay in Q3 earnings due to an investigation uncovering hidden expenses. Despegar.com (DESP) dropped more than -5% after a downgrade to ‘sell’ by TD Cowen, with a price target set at $14.
Earnings Reports on 11/26/2024
Companies reporting earnings include Analog Devices Inc (ADI), Autodesk Inc (ADSK), Best Buy Co Inc (BBY), Burlington Stores Inc (BURL), Crowdstrike Holdings Inc (CRWD), Dell Technologies Inc (DELL), Dick’s Sporting Goods Inc (DKS), HP Inc (HPQ), J M Smucker Co/The (SJM), Kohl’s Corp (KSS), Nordstrom Inc (JWN), Nutanix Inc (NTNX), Workday Inc (WDAY).
On the date of publication, Rich Asplund did not hold any 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
