The S&P 500 Index ($SPX) (SPY) today is up +0.45%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.38%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.70%.
Stocks today are moderately higher, with the S&P 500 posting a new all-time high. Today’s decline in bond yields is supporting stock. The 10-year T-note yield dropped to a 1-month low on carryover support from to a decline in European government bond yields and a drop in US inflation expectations. Also, chip stocks are climbing today, as Bloomberg reported that additional US curbs on sales of chip technology to China may stop short of some of the stricter measures previously considered. The NYSE will close early today at 1300 EST in a shortened holiday session.
Heavy stock buying has supported this month’s rally to record highs in the S&P 500, Dow Jones Industrials, and Nasdaq 100. Investors plowed $141 billion into US equities so far this month, the heaviest inflows for a four-week period on record, according to EPFR Global data.
The markets are discounting the chances at 66% for a -25 bp rate cut at the December 17-18 FOMC meeting.
Overseas stock markets today are mixed. The Euro Stoxx 50 is up +0.49%. China’s Shanghai Composite Index closed up by +0.93%. Japan’s Nikkei Stock 225 closed down -0.37%.
Interest Rates
December 10-year T-notes (ZNZ24) today are up +8 ticks. The 10-year T-note yield is down -5.2 bp to 4.211%. Dec T-notes today climbed to a 1-month high, and the 10-year T-note yield fell to a 1-month low of 4.194%. Today, t-notes are moving higher on carryover support from a rally in European government bonds. Also, a decline in inflation expectations supports T-notes as the 10-year breakeven inflation rate fell to a 1-3/4 month low today at 2.247%.
European government bond yields today are moving lower. The 10-year German bund yield fell to a 1-3/4 month low of 2.090% and is down -2.1 bp to 2.106%. The 10-year UK gilt yield fell to a 1-month low of 4.219% and is down -1.6 bp to 4.259%.
Eurozone Nov CPI rose +2.3% y/y, right on expectations. Nov core CPI rose +2.7% y/y, weaker than expectations of +2.8% y/y.
The ECB’s Oct 1-year inflation expectations unexpectedly increased to +2.5% from +2.4% in Sep, stronger than expectations of a decline to +2.3% y/y. Oct 3-year inflation expectations were unchanged from Sep at +2.1%, right on expectations.
German Oct retail sales fell -1.5% m/m, weaker than expectations of -0.5% m/m and the biggest decline in 2 years.
German Nov unemployment rose by +7,000, showing a stronger labor market than expectations of +20,000. The Nov unemployment rate was unchanged at 6.1%, right on expectations.
ECB Vice President Guindos said, “Inflation in Europe is going quite well. The data are positive, although news on the Eurozone economy is less good.”
ECB Governing Council member Stournaras said it’s very likely that “the ECB will have a more aggressive interest-rate reduction policy” if there’s evidence US tariffs will lead Europe into recession.
Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 14% for a -50 bp rate cut at the same meeting.
US Stock Movers
Chip stocks are climbing today after Bloomberg reported that additional US curbs on sales of chip technology to China may stop short of some of the stricter measures previously considered. As a result, Lam Research (LRCX) is up more than +5% to lead gainers in the S&P 500 and Nasdaq 100. Also, KLA Corp (KLAC) is up more than +4%, and Applied Materials (AMAT), ASML Holding NV (ASML), and Marvell Technology (MRVL) are up more than +3%. In addition, Nvidia (NVDA) is up more than +2% to lead gainers in the Dow Jones Industrials. Finally, ARM Holdings Plc (ARM), Microchip Technology (MCHP), and Qualcomm (QCOM) are up more than +2%.
Boeing (BA) is up more than +2% after BOA Aviation agreed to buy 14 Boeing 737-8 aircraft.
Voyager Therapeutics (VYGR) is up more than +19% after Wedbush initiated coverage on the stock with a recommendation of outperform and a price target of $11.
SentinelOne (S) is up more than +1% after JPMorgan Chase raised its price target on the stock to $33 from $30.
Zscaler (ZS) is up +0.62% after JPMorgan Chase raised its price target on the stock to $240 from $220.
MercadoLibre (MELI), which gets a majority of its revenue from Brazil, is down more than -3% after Brazil’s Finance Minister unveiled a plan to cut 70 billion reals ($11.8 billion) from public spending through 2026.
Workday (WDAY) is down more than -1%, adding to Wednesday’s -6% fall, after cutting its 2025 subscription revenue forecast to $7.70 billion from a previous forecast of $7.70 billion-$7.73 billion, weaker than the consensus of $7.72 billion.
Fifth Third Bancorp (FITB) is down more than -1% after a federal judge ruled that customers who claimed they were charged improper deposit account fees will be able to continue pursuing a proposed class action lawsuit against the bank.
Corteva (CTVA) is down nearly -1% on signs of insider selling after an SEC filing showed General Counsel and Secretary Fuerer sold $2.39 million shares on Tuesday.
Microsoft (MSFT) is down -0.17% after the US Federal Trade Commission opened an antitrust investigation into the company.
Earnings Reports (11/29/2024)
Cleanspark Inc (CLSK), iLearningEngines Holdings Inc (AILE), Ingles Markets Inc (IMKTA), Nordic American Tankers Ltd (NAT), Patterson Cos Inc (PDCO), Renovaro Inc (RENB), Zuora Inc (ZUO).
