Markets React to Corporate News and Upcoming Economic Indicators
The S&P 500 Index ($SPX) (SPY) is up +0.18%, while the Dow Jones Industrials Index ($DOWI) (DIA) has increased by +0.07%. The Nasdaq 100 Index ($IUXX) (QQQ) shows an uptick of +0.33%.
Stocks Gain Ahead of Key Inflation Report
Today, markets are trending slightly higher as the Dow Jones Industrials recovers from a two-week low. Investors are holding back as they await Wednesday’s consumer price report for November. Positive corporate developments are helping stocks; Alphabet has risen more than +4% following its announcement of advancements in quantum computing via its new Willow quantum chip. Additionally, Alaska Air Group shares are up over +16% after forecasting 2025 adjusted EPS significantly above the consensus.
Mixed Results for Specific Companies
On the downside, Oracle is down more than -7% after its second-quarter adjusted revenue fell short of expectations. Toll Brothers reported weaker than anticipated first-quarter adjusted home sales gross margin, leading to a decrease of more than -4% in its stock price. Higher Treasury yields are also putting pressure on stocks.
Productivity and Labor Costs Show New Numbers
Recent U.S. economic data revealed that Q3 nonfarm productivity remained at +2.2% as previously reported. However, Q3 unit labor costs were revised down to +0.8% from +1.9%, which is lower than the expected increase of +1.3%.
China’s Trade Data Raises Concerns
Trade figures from China have disappointed, presenting a negative outlook for global growth. November exports increased by +6.7% year-on-year, which was below the expected +8.7%. Imports unexpectedly fell by -3.9% year-on-year, marking the largest decline in nine months.
Market Focus Shifts to Consumer Price Index
Investors are focused on the upcoming U.S. consumer price report, looking to see if inflation remains manageable enough for the Federal Reserve to ease monetary policy further. The November Consumer Price Index (CPI) is expected to rise slightly to +2.7% year-on-year from +2.6% in October, while the CPI excluding food and energy is forecasted to stay steady at +3.3% year-on-year.
The market is currently discounting an 88% chance of a -25 basis point rate cut at the Federal Open Market Committee (FOMC) meeting scheduled for December 17-18.
Global Market Performance Mixed
International stock markets have shown mixed results today. The Euro Stoxx 50 has dropped -0.43%. In contrast, China’s Shanghai Composite Index rose to a one-month high, closing up +0.59%, while Japan’s Nikkei Stock 225 gained +0.53%.
Interest Rates Overview
March 10-year T-notes (ZNH25) have decreased by -10 ticks, with the 10-year T-note yield rising +3.7 basis points to 4.238%. T-note prices are facing pressure due to weakening in European government bonds and upcoming Treasury auctions totaling $119 billion.
European bond yields have increased today. The 10-year German bund yield reached a one-and-a-half-week high of 2.143%, while the 10-year UK gilt yield climbed to a similar high of 4.329%.
Swaps markets are currently pricing in a 100% chance of a -25 basis point rate cut by the European Central Bank (ECB) at its upcoming policy meeting on December 12.
Highlighting U.S. Stock Movers
Among the notable gainers today, Alphabet (GOOGL) is up over +4% following its quantum computing announcement. Boeing (BA) rose by more than +5% after reports of its resumed production of the 737 Max Jet.
Cruise line operators are also seeing upward movement, with Norwegian Cruise Line Holdings Ltd (NCLH) gaining +4% after Goldman Sachs upgraded it to “buy” with a price target of $35. Carnival Corporation (CCL) and Royal Caribbean Cruises Ltd (RCL) have also reported gains.
Alaska Air Group (ALK) continues to climb, up more than +16% after projecting an adjusted EPS of at least $5.75 for 2025. In addition, American Airlines Group (AAL) is up over +4% following an upgrade by Bernstein.
Meanwhile, Oracle (ORCL) led the S&P 500 in losses, down more than -7% after its revenue report. MongoDB (MDB) has also seen a significant decline, down more than -12% after key executive departures.
Ferguson Enterprises (FERG) reported weaker Q1 revenues and fell over -8%, while homebuilders are under pressure following Toll Brothers’ grim forecast.
Earnings Reports (12/10/2024)
Upcoming earnings include AutoZone Inc (AZO), Ferguson Enterprises Inc (FERG), GameStop Corp (GME), and Ollie’s Bargain Outlet Holdings (OLLI).
On the date of publication, Rich Asplund did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed herein reflect those of the author and do not necessarily represent those of Nasdaq, Inc.
