Market Moves: Slight Declines Amid Geopolitical Uncertainty
The S&P 500 Index ($SPX) (SPY) today is down -0.13%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.02%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.12%.
Stocks Shift Lower as Inflation Data Approaches
Today, stock markets are experiencing small declines as investors await key US inflation data this week for guidance. Higher Treasury note yields are influencing market behavior, compounded by increased geopolitical tensions in the Middle East following recent governmental changes in Syria. These developments could create instability as various factions attempt to fill the power void.
Mergers & Acquisitions Bring Some Positivity
On a more positive note, the market is buoyed by heightened M&A activity. Omnicom Group has agreed to purchase Interpublic Group in a deal valued at $13.3 billion, excluding debt. Additionally, Super Micro Computer shares rose over +5% following an extension granted by Nasdaq allowing the company until February 25 to submit its financial reports for the fiscal year ending June 30 and quarterly results for the period ended September 30.
Looking Ahead: Consumer Price Index Report
Attention turns to Wednesday’s consumer price report for November. Analysts expect an uptick in consumer prices to +2.7% year-over-year from +2.6% in October. The core consumer price index, excluding food and energy, is anticipated to remain steady at +3.3% year-over-year.
Chinese Easing Fuels Global Market Optimism
Globally, equity markets benefited from a shift in monetary policy in China. The Chinese Politburo, led by President Xi Jinping, announced intentions for a “moderately loose” monetary policy in the coming year, alongside proactive fiscal measures aimed at stabilizing the property and stock markets. Such measures signal potential further easing to support the economy.
Market Predictions for Interest Rate Changes
Currently, markets are pricing in an 87% likelihood of a -25 basis point rate cut during the Federal Open Market Committee meeting on December 17-18.
Overseas Market Performance Mixed
International stock markets present a mixed picture today. The Euro Stoxx 50 climbed to its highest point in over a month, up +0.33%. Conversely, China’s Shanghai Composite Index slightly retreated, closing down -0.05%, while Japan’s Nikkei Stock 225 ended the day up +0.18%.
Interest Rates Overview
March 10-year T-note futures (ZNH25) fell by -5 ticks today, increasing the yield on 10-year T-notes by +1.5 basis points to 4.168%. Rising WTI crude oil prices by +1% have raised inflation expectations, negatively impacting T-note prices. Furthermore, the Treasury is set to auction $119 billion in reopened T-notes and T-bonds this week, starting with a $58 billion auction of 3-year notes on Tuesday. However, European government bond prices are currently providing some support to T-note prices.
In Europe, government bond yields have decreased, with the 10-year German bund yield falling by -1.3 basis points to 2.094%, and the 10-year UK gilt yield dropping -3.4 basis points to 4.241%. Additionally, the Eurozone’s December Sentix investor confidence index declined unexpectedly to -17.5, a 13-month low, contrasting with expectations for an increase to -12.3.
US Stock Movers
Nvidia (NVDA) leads the Dow’s decline, dropping over -2% following news that China’s State Administration for Market Regulation has opened a probe into the company for suspected monopolistic practices.
Omnicom Group (OMC) shares are down more than -5% following the announcement of its acquisition of Interpublic Group. Advanced Micro Devices (AMD) fell over -3% after Bank of America downgraded its rating due to potential risks to 2025 forecasts. Similarly, Sofi Technologies (SOFI) declined more than -4%, with a downgrade from Bank of America impacting its outlook.
BioAge Labs (BIOA) saw a shocking drop of over -75% after halting a Phase-2 trial for its obesity drug. Arthur J Gallagher (AJG) fell over -1%, announcing an $8.65 billion public stock offering, while Houlihan Lokey (HLI) also dropped more than -1% following a downgrade by Morgan Stanley.
On the contrary, Interpublic Group (IPG) rose over +14% as it was acquired by Omnicom, while Super Micro Computer (SMCI) gained more than +5% due to Nasdaq’s deadline extension. Workday (WDAY) jumped over +7% after being named to replace Amentum Holdings in the S&P 500, and Apollo Global Management (APO) was also up more than +3% due to an S&P 500 inclusion announcement.
US-listed Chinese stocks surged following the announcement of further stimulus measures from Chinese leaders, with PDD Holdings (PDD) leading the Nasdaq 100 with an increase of over +11%. Other notable gainers include Alibaba Group Holdings (BABA), Baidu (BIDU), and NetEase (NTES), each up over +7%. Additionally, Arcellx (ACLX) increased by more than +3% following positive mid-stage trial results for its blood cancer treatment. Macy’s (M) rose more than +3% amid news of an activist investor’s intentions to push for change within the company.
Earnings Reports (12/9/2024)
Upcoming earnings reports include Casey’s General Stores Inc (CASY), MongoDB Inc (MDB), Oracle Corp (ORCL), Toll Brothers Inc (TOL), and Vail Resorts Inc (MTN).
On the date of publication, Rich Asplund did not have (either directly or indirectly) 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.
