Market Update: Dow Hits Record High Amid Mixed Economic Signals
The S&P 500 Index ($SPX) (SPY) has decreased by -0.15% today, while the Dow Jones Industrials Index ($DOWI) (DIA) has increased by +0.16%. In contrast, the Nasdaq 100 Index ($IUXX) (QQQ) is down by -0.61%.
Today’s stock market shows mixed results as the Dow Jones Industrials reaches a new all-time high. Negative news from certain companies is impacting the overall market. Notably, Symbotic has seen a dramatic decline of over -33% after announcing a delay in filing its annual Form 10-K for the fiscal year ending September 28, 2024. The company needs more time to assess how a revenue recognition error will affect its finances. Additionally, Dell Technologies is down by over -12% due to disappointing Q3 revenue figures.
Despite these challenges, stocks received some support from mixed economic data, which caused Treasury note yields to drop. The 10-year Treasury yield fell to its lowest level in three weeks. Specifically, orders for capital goods, excluding defense and aircraft, unexpectedly fell in October, indicating weaker capital spending. Additionally, Q3 GDP’s personal consumption figure was revised down. On the job front, initial claims for unemployment benefits decreased unexpectedly to a seven-month low, while continuing claims rose, suggesting mixed employment signals.
In the week ending November 22, applications for U.S. mortgages increased by +6.3%, with purchase applications rising by +12.4% and refinancing down by -2.6%. The average rate for a 30-year fixed mortgage decreased to 6.86% from 6.90% the previous week.
The final Q3 GDP growth rate remained steady at 2.8% annually, matching expectations. However, the personal consumption growth rate for Q3 was revised down by -0.2 percentage points to 3.5%.
Capital goods orders for October also disappointed, dropping -0.2% month-over-month instead of the expected increase of +0.1%.
The chances of a -25 basis point interest rate cut at the upcoming Federal Open Market Committee (FOMC) meeting on December 17-18 are currently estimated at 67%.
International markets are mixed today. The Euro Stoxx 50 is down by -0.72%, while China’s Shanghai Composite Index rebounded from a five-week low, closing up +1.53%. Japan’s Nikkei 225 ended the day down -0.80%.
Interest Rates
December 10-year Treasury notes (ZNZ24) are up by +11 ticks today, with the yield falling by -5.8 basis points to 4.248%. T-notes are rising due to support from stronger European government bonds as well as a downward adjustment in the U.S. Q3 core PCE price index.
European bond yields are decreasing as well, with the 10-year German bund yield falling to a 1.75-month low of 2.135%, down -2.2 basis points to 2.164%. Similarly, the 10-year UK gilt yield dropped to a four-week low of 4.291%, down -5.9 basis points.
The German GfK consumer confidence index for December fell to a seven-month low of -23.3, significantly worse than the expected -18.8.
According to ECB Executive Board member Schnabel, the European Central Bank (ECB) must be cautious about lowering interest rates too much, as borrowing costs are close to the neutral level. Rate cut expectations for the ECB’s December 12 meeting are currently at 100% for a -25 basis point reduction and 29% for a -50 basis point cut.
US Stock Movers
Dell Technologies (DELL) is one of the biggest decliners today, down over -12% after reporting a total net revenue of $24.37 billion for Q3, trailing behind the expected $24.59 billion.
In the Nasdaq 100, Workday (WDAY) fell more than -10% after lowering its 2025 subscription revenue guidance to $7.70 billion. The initial estimate ranged from $7.70 billion to $7.73 billion, which was less than the consensus expectation of $7.72 billion.
HP Inc (HPQ) dropped by more than -8% after its Q1 adjusted EPS forecast of 70 to 76 cents fell short of the 86-cent consensus.
Autodesk (ADSK) saw a loss of over -6% after reporting a Q3 adjusted operating margin of 36.0%, slightly below the consensus expectation of 36.1%.
On the upside, Ambarella (AMBA) increased over +13% following a Q3 adjusted EPS of 11 cents, surpassing the expected 4 cents.
Urban Outfitters (URBN) also rose more than +13%, reporting Q3 net sales of $1.36 billion, above the anticipated $1.33 billion. Dick’s Sporting Goods (DKS) gained more than +3% due to an upgrade from UNS with a price target of $260.
UnitedHealth Group (UNH) increased by over +1%, leading the Dow’s gainers after RBC Capital Markets raised its price target to $655 from $595. Paramount Global (PARA) saw a similar uptick of over +1% after CFRA upgraded it to buy from hold, setting a price target of $13.
Earnings Reports (11/27/2024)
Forthcoming earnings will be reported by Anavex Life Sciences Corp (AVXL), Dakota Gold Corp (DC), Golden Ocean Group Ltd (GOGL), and Immersion Corp (IMMR).
On the date of publication, Rich Asplund did not hold any positions (directly or indirectly) in the securities mentioned in this article. All data and information here are provided solely for informational purposes. For more details, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed in this article belong solely to the author and do not necessarily represent those of Nasdaq, Inc.
