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The S&P 500 Index is down 0.97% today, reaching a 1.5-week low, while the Dow Jones and Nasdaq 100 fell 0.69% and 1.29%, respectively. Key stocks contributing to the decline include Palantir Technologies, which dropped over 7% despite exceeding Q3 sales expectations; its price-to-sales ratio has risen to 85, the highest in the S&P 500. In a broader context, the U.S. government shutdown, now in its sixth week, continues to negatively impact economic sentiment.
During a financial summit in Hong Kong, Morgan Stanley and Goldman Sachs warned that U.S. equity markets could face a pullback of over 10% in the next 12 to 24 months, following a more than 35% surge in the S&P 500 since April. Additionally, U.S. total vehicle sales for October slowed to 15.32 million, below the anticipated 15.50 million, marking the lowest sales figure in 14 months. The markets are currently pricing a 70% chance of a 25 bp rate cut by the Federal Reserve at its upcoming meeting on December 9-10.
As the earnings season progresses, with 136 S&P 500 companies reporting this week, 80% have surpassed forecasts, signaling potential growth despite expectations for Q3 profits and sales growth being the smallest in two years, at 7.2% and 5.9% year-over-year, respectively.
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