Early Look

Monday, December 16, 2024

U.S. futures are edging slightly higher after mixed results last week, ahead of several central bank meetings including the FOMC next week, as stock markets remain strong into year end. As for last week, the S&P 500 fell 0.64%, the Nasdaq climbed 0.34%, and the Dow fell 1.82% in what was a lackluster week dominated by inflation data that showed slow signs of acceleration with both CPI and PPI for November coming in above the prior month readings, leading to a surge in Treasury yields as the 10-yr ended around 4.4% on Friday. The Dow declined for the 7^th straight day, led by weakness in managed care giant United Health (UNH). There were several central bank actions last week including interest rate cuts by the ECB and Canada, but this week we await rate decisions in the U.S., Japan, and the UK, Norway. The busy U.S. data schedule also has Empire state manufacturing, manufacturing and services PMIs, retail sales, industrial production, building permits, weekly jobs, final GDP, Philly Fed Manufacturing Index, existing home sales, core PCE price index and Michigan consumer sentiment and inflation expectations.

The Federal Reserve is widely expected to cut rates 25 basis points to 4.25%-4.50% on Wednesday and markets have almost fully priced it in but have taken out around 25 bps of expected easing in 2025 in the wake of the recent rises in yields. The economic projections, statement, and press conference will drive expectations. The Bank of Japan rate decision is due Thursday December 19th, along with its Monetary Policy Statement, followed by a press conference. While conditions for another hike to 0.5% are falling into place, policymakers appear to be in no rush. Japanese data includes core machinery orders, manufacturing PMI, trade figures and CPI. The Bank of England rate decision is also due Thursday, but a rate hold is expected.

In Asian markets, The Nikkei Index dipped -12 points to 39,457, the Shanghai Index slipped -5 points to 3,386, and the Hang Seng Index dropped -175 points to 19,795. In Europe, the German DAX is down -70 points to 20,335, while the FTSE 100 slides -35 points to 8,264 and France’s Cac-40 Index drops -61 points to 7,348 after Moody’s cut the French credit rating on Friday. Oil prices are edging lower, gold higher and Bitcoin +2.8% back above $104,000.

• The Dow Jones Industrial Average fell -86.06 points, or 0.20%, to 43,828.06.
• The Nasdaq Composite gained 23.88 points, or 0.12%, to 19,926.72.
• The Russell 2000 Index declined -14.19 points, or 0.60% to 2,346.90.

• 9:45 AM ET S&P Global Manufacturing PMI, Dec-flash…est. 49.8
• 9:45 AM ET S&P Global Services PMI, Dec-flash…est. 55.7
• 9:45 AM ET S&P Global Composite, Dec-flash

• Earnings After the Close: CMP MAMA MITK OPTT RCAT STRM

• November industrial production rose by 5.4% from a year ago, above the expectations of 5.3% growth among economists polled by Reuters, which also compares with a climb of 5.3% in the prior month.

• Macy’s (M) upgraded to Buy from Hold at Gordon Haskett with $20 tgt.
• Procter & Gamble (PG) has promised a group of shareholders it will disclose more details about how it audits wood-pulp suppliers, the investors told Reuters, after shareholders pushed the maker of Charmin toilet paper for years to source forest products more sustainably.

• Honeywell International (HON) said it continues to review its business, including a potential separation of its aerospace business. To streamline business operations, co said last month it would sell its personal protective equipment business for about $1.33 billion in cash.

• Discover Financial Services (DFS) credit card charge-off rate 2.41% at November end and the credit card delinquency rate was 1.77% at November end.
• JPMorgan (JPM) reported charge-offs for November of 1.64% and delinquencies 0.87%.
• Western Union (WU) announced a $1 billion share repurchase plan.

• Checkpoint Therapeutics (CKPT) said the FDA approved the company’s drug Unloxcyt for treatment of a type of cancer of the outer layer of the skin.
• Edgewise Therapeutics (EWTX) announces positive topline results from the CANYON Phase 2 Trial of Sevasemten in individuals with Becker muscular dystrophy; the trial met primary endpoint of reduction in circulating levels of creatine kinase (CK), a biomarker associated with skeletal muscle damage, in the largest Becker interventional trial to date.
• Illumina (ILMN) will be removed from the Nasdaq-100 Index effect before the market opens on Dec. 23.
• Moderna Inc. (MRNA) will be removed from the Nasdaq-100 Index effect before the market opens on Dec. 23.
• Goldman Sachs’ (GS) investment arm agrees $2.10 billion deal for drugmaker Synthon- Financial Times reported.

• NetApp (NTAP) upgraded to Overweight from Neutral at JPMorgan with a $160 price target.
• Okta (OKTA) upgraded to Overweight from Neutral at JPMorgan with a $100 price target.
• Palantir Technologies (PLTR) will be added to the Nasdaq-100 Index effect before the market opens on Dec. 23.
• Super Micro Computer (SMCI) will be removed from the Nasdaq-100 Index effect before the market opens on Dec. 23.