Today’s Big Picture

Asia-Pacific equity markets finished the day higher except for Hong Kong’s Hang Seng, which fell 0.98% on selling in Transportation and Consumer Services names, and Japan’s Nikkei, which declined 0.12%. China’s Shanghai Composite rose 0.23%, India’s SENSEX advanced 0.31%, Australia’s ASX All Ordinaries gained 0.42%, South Korea’s KOSPI added 1.05%, and Taiwan’s TAIEX closed 1.19% higher in a broad rally led by Transportation names. Major European markets are down modestly in midday trading, and U.S. equity futures point to a slightly lower open later this morning. 

We start this morning’s trading off in a bit of a lull as we wait for the latest parade of Fed speakers, four in all today. Their comments come ahead of the Fed’s latest Beige Book tomorrow afternoon, the October PCE Price Index on Thursday, and November Manufacturing PMI on Friday. More than likely their comments today will reinforce that while progress on inflation is being made, more work needs to be done – pretty much the party line that’s been trotted out these last few weeks. Data out later this week is expected to confirm the inflation step-down found in the October CPI and PPI data, but, in our view, comments in the upcoming November Manufacturing and Services PMI data will set the tone for the November CPI and PPI data. 

Coming off the pronounced move in the stock market since October 27, this lull may induce some rethinking and potential profit taking, especially with S&P 500 back in overbought territory. 

Data Download

International Economy

The GfK Consumer Climate Indicator for Germany edged up to -27.8 heading into December 2023 from a downwardly revised -28.3 in November.

Lending to companies in the Euro Area fell by 0.3% YoY in October, marking the first decline since July 2015, as the European Central Bank’s recent policy tightening impacted credit demand. Bank lending to households in the Eurozone rose by 0.6% YoY in October, the slowest pace since June 2015.

Oil prices are trading slightly higher this morning ahead of this week’s OPEC+ meeting, which is widely expected to deepen and extend cuts to oil production amid fears of supply being consistently higher than demand.

Domestic Economy

At 9 AM ET, investors will have back-to-back looks at home prices in September courtesy of the FHFA Housing Price Index and the S&P Case-Shiller Home Price Index. 

At 10 AM ET, the Conference Board’s November Consumer Confidence reading will be published and the market consensus sees it falling to 101 for the month from 102.6 in October. 

Markets

Equities seemed to take a breather Monday as major broad market indexes were modestly lower. The Nasdaq Composite came close to flat, down 0.07%, the Dow declined 0.16%, the S&P 500 fell 0.20% and the Russell 2000 gave back 0.35%. There were no surprises across sectors as Healthcare and Communication Services both dipped just over 0.60%. Technology (-0.01%) ended the day flat and leadership, as it was, came from Real Estate, up 0.36%.

Shares of Domino’s Pizza (DPZ) gained 4.52% after analysts at TD Cowan increased their price target by $20 to $430 per share ahead of the company’s December 7th Investor Day.

Here’s how the major market indicators stack up year-to-date:

Dow Jones Industrial Average: 6.60%
S&P 500: 18.52%
Nasdaq Composite: 36.06%
Russell 2000: 2.27%
Bitcoin (BTC-USD): 124.28%
Ether (ETH-USD): 69.18%
Stocks to Watch

Once again, there are no market-moving earnings reports expected before U.S. equity markets begin trading today.

Pre-market breadth is a little lighter as 205 names in the S&P 500 have traded hands so far this morning, with 108 gainers and 97 decliners. Equity Residential (EQR) and Gen Digital (GEN) are seeing a healthy bid while Edward Lifesciences Corporation (EW) and EQT Corporation (EQT) are under some pressure.

Shares of Zscaler (ZS) slumped in after-market trading last night after the company reported better-than-expected October results and lifted its January quarter guidance. While some pressure on the shares can be attributed to profit-taking following the 20% move in ZS shares so far this month, management’s reiterating its fiscal 2024 billings guidance despite lifting its current quarter outlook is raising some concerns. 

Shares of SpringWorks Therapeutics (SWTX) surged after the FDA approved its drug Ogsiveo for treating adult patients with desmoid tumors requiring systemic treatment. The drug is the first and only approved treatment for adults with desmoid tumors.

22nd Century Group (XXII) announced it would sell all of its GVB Biopharma hemp/cannabis operations about a year and a half after acquiring the business. XXII shares moved higher on this news

Ahead of meeting investors and analysts today, Novartis (NVS) upgraded its mid-term sales guidance to a 5% compound annual growth rate (CAGR) over the 2022-2027 period, targeting a core operating income margin of ~40%+ by 2027.

Oshkosh (OSK) secured a five-year, $342 million contract to produce equipment trailers for the US. Army.

Accenture (ACN) agreed to acquire Italy-based firm Ammagamma, as part of its investment of $3 billion to accelerate clients’ transformation through the large-scale application of AI.

iRobot (IRBT) shares plummeted yesterday after the European Commission issued a warning that Amazon’s planned $1.7 billion acquisition of the Roomba maker raises competition concerns.

Amazon (AMZN) is looking to expand its palm-scanning technology to include an authentication tool that lets corporate employees swipe their hand to enter an office or access sensitive information like financial data or human resources records. Announced partners for the biometric technology include IHG Hotels and Resorts, turnstile manufacturer Boon Edam, and Kone, an escalator and elevator provider.

Shares of Carlyle Group (CG) and WP Carey (WPC) were up in pre-market trading shares after being named to join the S&P MidCap 400, effective prior to the start of trading on November 30. Carlyle Group will replace ICU Medical (ICUI), and WP Carey’s will replace Worthington Industries (WOR).

IPOs

Shein, the China-founded online fashion company confidentially filed to go public in the U.S. Social media company Reddit is evaluating an initial public offering for as soon as 1Q 2024, and Kim Kardashian’s underwear brand Skims, which was valued this summer at $4 billion, is weighing an IPO as well. Microsoft (MSFT) backed cloud and data security company Rubrik Inc. is also looking at an IPO as soon as the first quarter.

Readers who want to dig deeper into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.

After Today’s Market Close

CrowdStrike (CRWD), Hewlett Packard Enterprise (HPE), Intuit (INTU), NetApp (NTAP), Splunk (SPLK), and Workday (WDAY) are slated to report their quarterly results after equities stop trading. Those looking for more on upcoming quarterly earnings reports should head on over to Nasdaq’s Earnings Calendar. 

On the Horizon

Wednesday, November 29

UK: Bank of England Consumer Credit – October
Eurozone: Economic Sentiment, Consumer Confidence, Consumer Inflation Expectations – November
US: Weekly MBA Mortgage Applications 
US: GDP (Second Estimate) – 3Q 2023 
US: Weekly EIA Crude Oil Inventories 
US: Fed Beige Book

Thursday, November 30

China: NBS Manufacturing & Non-Manufacturing PMI – November
Germany: Retail Sales – October
Eurozone: Inflation Rate (Flash) – November
US: Weekly Initial & Continuing Jobless Claims
US: Chicago PMI – November 
US: Personal Income & Spending – October
US: PCE Price Index – October 
US: Pending Home Sales – October 
US: Weekly EIA Natural Gas Inventories 

Friday, December 1

Japan: Jibun Bank Manufacturing PMI (Final) – November
China: Caixin Manufacturing PMI – November
Eurozone: HCOB Manufacturing PMI (Final) – November
UK: S&P/CIPS Manufacturing PMI (Final) – November
US: S&P Global Manufacturing PMI (Final) – November
US: ISM Manufacturing Index – November 
US: Construction Spending – October
Thought for the Day

“Take chances, make mistakes. That’s how you grow. Pain nourishes your courage. You have to fail in order to practice being brave.” ~Mary Tyler Moore

Disclosures

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Original: Earnings Feed: Daily Markets: Parade of Fed Speakers Talk Ahead of Key Data Reports