Today’s Big Picture

Asia-Pacific equity markets finished the day up across the board except for Hong Kong’s Hang Seng which fell 0.81% in mixed trading that saw declines in Retail Trade names push the index into the red. Australia’s ASX All Ordinaries ended the day flat, up a mere 0.06%, India’s SENSEX rose 0.15%, Taiwan’s TAIEX gained 0.20%, South Korea’s KOSPI added 0.30%, China’s Shanghai Composite closed 0.74% higher, and Japan’s Nikkei doubled that result, up 1.50% taking its cue from U.S. markets and on a softer yen boosting the export economy. European markets are mixed in midday trading, and U.S. equity futures point to a lower open.

This week the stock market’s Goldilocks narrative could collide with the Federal Reserve as the central bank concludes its next monetary policy meeting and issues its latest set of economic projections. Declines in Treasury yields, oil prices, and the dollar have all contributed to the stock market’s surge and has Fed Funds futures traders seeing the Fed Funds cutting four to five times in 2024. If the Fed’s policy statement, Fed Chair Powell’s presser comments, those economic projections, or the Tuesday’s November Consumer Price Index throw cold water on the Goldilocks narrative it would be a reason for an overbought stock market to give back some of its recent gains.

Data Download

International Economy

Data released over the weekend showed China’s consumer prices fell 0.5% YoY in November, accelerating from a 0.2% drop in October and worse than the 0.1% forecast. The November figure marked the fastest decline in the Consumer Price Index (CPI) since November 2020, as the cost of food decreased at the strongest pace in over two years (-4.2% versus -4.0% in October) amid a further fall in pork prices. Core consumer prices, which exclude prices of food and energy, increased by 0.6% YoY in November, the same as in October. On a month-over-month basis, headline CPI dropped by 0.5% compared to October’s 0.1% decrease.

China’s vehicle sales surged 27.4% YoY in November 2023 to 2.97 million units, marking the fourth consecutive month of growth after rising 13.8% in October. Sales of energy vehicles soared by 30% and YTD is up 36.7% compared to the overall figure of +10.8% for new vehicle sales.

Japan’s machine tool orders declined 13.6% YoY to JPY 115,884 million in November 2023, easing from October’s 20.6% contraction.

Domestic Economy

A new poll from Monmouth University finds consumer spending may not be as strong as initially thought. Survey findings indicate inflationary pressures are negatively impacting consumer spending for the holidays. According to poll findings, 55% of Americans will cut back on holiday shopping due to higher prices.

Meanwhile, a new poll from Gallup found Americans plan to spend an average of $975 on holiday gifts, a $108 increase from last year. The pollster noted this is the highest figure seen since 1999.

The overall average salary raise for 2024 is expected to be 4.0%, according to the latest Salary Budget Planning Survey by Willis Towers Watson (WTW). Though decelerating from the 4.4% actual average increase in 2023, the projection remains well above the 3.1% increase in 2021 and years prior.

New York State is joining chip companies to invest $10 billion in a semiconductor research facility at the University at Albany. Collaborating partners include IBM (IBM), Micron Technology (MU), Applied Materials (AMAT), and Tokyo Electron (TOELY). The expansion could help New York’s bid to be designated a research hub under last year’s $53 billion Chips Act.

According to the American Automobile Association’s (AAA) forecast, 7.5 million travelers are expected to take to the skies this holiday season, exceeding 2019’s record of 7.3 million. As many as 115.2 million people are expected to travel 50 miles or more from home from December 23 to January 1, 2024. This 2% YoY increase would mark the second-highest year-end travel forecast since the AAA began collecting data in 2000. Peak road traffic is expected on December 23 and December 28.

Markets

Oil prices started to firm up, boosting Energy 1.08% which led sectors on Friday, followed by Technology (0.85%) and Financials (0.53%). Consumer Staples fell 0.69% and Utilties and Real Estate both declined about 0.20%, rounding out the group of down sectors. Broad market indexes ended the day higher with the Dow rising 0.36%, the S&P 500 gaining 0.41%, the Nasdaq Composite added 0.45% and the Russell 2000 closed 0.67% higher. While the markets had a tepid end to last week, shares of Paramount Global jumped 12.11% on speculation that Skydance Media and RedBird Capital are contemplating a possible takeover of the media giant’s controlling shares.

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

Dow Jones Industrial Average: 9.35%
S&P 500: 19.92%
Nasdaq Composite: 37.62%
Russell 2000: 6.79%
Bitcoin (BTC-USD): 165.97%
Ether (ETH-USD): 96.61%
Stocks to Watch

Before U.S. equity markets begin trading today, no market-moving earnings reports are expected.

Pre-market breadth is strong as 268 names in the S&P 500 have traded hands so far this morning with 153 gainers and 115 decliners. Shares of Cigna Group (CI) are flying high this morning (more below) while Albemarle Corporation (ALB), Enphase Energy (ENPH), and Franklin Resources (BEN) are coming under pressure.

Shares of Macy’s (M) shares jumped by ~20% following a $5.8 billion buyout offer from Arkhouse Management and Brigade Capital Management. The proposal values the established department store chain at $21 per share, representing approximately a 21% premium over Macy’s shares’ closing price of $17.39 on Friday.

Paramount Global’s (PARA) controlling shareholder Shari Redstone has held talks about the sale of the company’s movie studio and other assets to Skydance, whose holders include RedBird Capital and billionaire Larry Ellison’s family.

Flight attendants at Southwest Airlines (LUV) voted down a contract offer reached by negotiators for the airline and the union. The Transport Workers Union Local 556 said the proposal was voted down by a margin of 64% to 36%.

Cigna and Humana (HUM) have reportedly scrapped plans to merge after being unable to agree on financial terms, including price.

DoorDash (DASH) was named to be a part of the Nasdaq-100 Index as part of the index’s annual reconstitution of the index and will officially become part of the index before the market open on December 18. Shares of Lucid Group (LCID) and JD.com (JD) were under pressure this morning following the announcement that both companies would be removed from the Nasdaq-100 Index, effective December 18th, 2023.

IPOs

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

After Today’s Market Close

Casey’s General Store (CASY) and Oracle (ORCL) 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

Tuesday, December 12

Japan: Producer Price Index – November
UK: Unemployment Rate – October
Eurozone: ZEW Economic Sentiment Index – December
US: NFIB Small Business Optimism Index – November
US: Consumer Price Index – November
US: Treasury Budget – November

Wednesday, December 13

UK: GDP, Industrial Production, Manufacturing Production – October
Eurozone: Industrial Production – October
US: Weekly MBA Mortgage Applications
US: Producer Price Index – November
US: Weekly EIA Crude Oil Inventories
US: FOMC Rate Decision, Economic Projections

Thursday, December 14

UK: Bank of England Interest Rate Decision
Eurozone: European Central Bank Interest Rate Decision
US: Weekly Initial & Continuing Jobless Claims
US: Import/Export Prices – November
US: Retail Sales – November
US: Business Inventories – October
US: Weekly EIA Natural Gas Inventories

Friday, December 15

Japan: Jibun Bank Flash Manufacturing and Services PMI – December
China: Industrial Production, Retail Sales, Vehicle Sales, Foreign Direct Investment – November
Eurozone: HCOB Flash Manufacturing and Services PMI – December
UK: S&P Global/CIPS Flash Manufacturing and Services PMI – December
US: Empire Manufacturing Index – December
US: Industrial Production & Capacity Utilization – November
US: S&P Global Flash Manufacturing and Services PMI – December

Thought for the Day

“If you feel pain, you’re alive. If you feel other people’s pain, you’re a human being.” ~ Leo Tolstoy

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: Equities Brace for Fed’s Meeting This Week