Wall Street Today | Slow Monday Market As Investors Await CPI and FOMC Meeting
RECAP
U.S. stock indexes traded higher on a slow Monday in the lead-up to the release of key inflation data and the Federal Reserve’s interest-rate decision later this week. A stronger-than-expected jobs report pushed indexes into an upward trend last week that continued into the new week.
The $Dow Jones Industrial Average (.DJI.US)$ added 0.34%, to 36,404, the $S&P 500 Index (.SPX.US)$ rose 18 points to 4,622, and the $Nasdaq Composite Index (.IXIC.US)$ went up 28 points, or to 14,432.
On Friday, the Dow industrials hit its highest close since Jan. 12, 2022. The S&P 500 finished at its best close since March 29, 2022, and the Nasdaq Composite hit its highest since April 4, 2022.
Investors now turn their attention to the final Fed meeting of the year on Wednesday and important inflation data ahead of that.
MACRO
US 10-Year Auction High Yield Falls From Previous Month, Demand Rises
Two- and 10-year Treasury yields continued to inch higher Monday afternoon following a pair of government-debt auctions that produced lackluster demand. Treasury's $37 billion sale of 10-year debt came in weak, while a $50 billion sale of 3-year notes was met with poor demand.
The $U.S. 2-Year Treasury Notes Yield (US2Y.BD)$ rose 1.2 basis points to 4.740% from 4.725% on Friday. Yields move in the opposite direction to prices. The $U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ advanced 3.3 basis points to 4.263% from 4.244% Friday afternoon. The $U.S. 30-Year Treasury Bonds Yield (US30Y.BD)$ rose 4.4 basis points to 4.350% from 4.325% late Friday.
On Wednesday, Federal Reserve policymakers will meet to decide on monetary policy. Traders put a 98% probability the central bank will leave interest rates unchanged at 5.25%-5.5% at its meeting this week and a 94% chance of no action by January. However, the chance of at least a 25-basis-point cut by March was seen at 38.4%, down from 57.4% a week ago, according to the CME FedWatch Tool.
Last Friday's strong jobs data has prompted traders to push back on expectations for the first Federal Reserve interest-rate cut next year. Fed-funds futures traders now see a 39.9% chance of at least a 25-basis-point cut by March, down from 57.4% a week ago, according to the CME FedWatch Tool.
SECTORS
Bitcoin-Related Stocks Shrink on Crypto Price Drop
Several $Bitcoin (BTC.CC)$ mining stocks, including $MARA Holdings (MARA.US)$, $Riot Platforms (RIOT.US)$ and $CleanSpark (CLSK.US)$ are trading lower following Bitcoin's steepest drop in almost four months. The cryptocurrency climbed 13% last week and 150% year-to-date. $Coinbase (COIN.US)$ was also lower by about 3%.
Broadcom Shares Soar Past $1,000 as Citi Sees VMWare Acquisition Boosting Earnings
$Broadcom (AVGO.US)$ shares surged past $1,000 for the first time after the semiconductor company completed its purchase of VMware. Seeking Alpha quoted Citi analysts saying the acquisition could boost Broadcom’s earnings by 34% in fiscal year 2025.
Citi analysts resumed coverage of Broadcom with a buy rating and a price target of $1,100, citing strength in its core business and the positive impact from the VMware deal, according to Seeking Alpha. The analysts also forecast sales from the company’s artificial intelligence (AI) infrastructure to double to $8 billion in fiscal year 2024, from $4 billion in 2023.
Optimism over the outlook on AI-driven demand for chips helped push up shares across the industry. The $PHLX Semiconductor Index (.SOX.US)$ rose 3.7%. $Advanced Micro Devices (AMD.US)$ shares advanced 4.2%, extending last week’s gain that was driven by investor enthusiasm over the company’s new AI chips that could rival market leader $NVIDIA (NVDA.US)$.
$Applied Materials (AMAT.US)$, which provides manufacturing equipment, services and software to the semiconductor, display and related industries, saw its shares advanced 5.1%. Shares of $Intel (INTC.US)$, which plans to introduce its chip to compete with Nvidia in 2025, gained 4.4%. Meanwhile, $NVIDIA (NVDA.US)$ shares slipped 1.4% to $468.28.
Oil Prices Extend Declines After Longest Weekly Losing Streak Since 2018
Natural-gas futures fall by more than 10% on forecasts for milder weather, following Oil futures lower on Monday, extending declines after marking their longest streak of weekly declines since 2018, on concerns about a slowing global economy and booming U.S. supply.
West Texas Intermediate crude for January $Crude Oil Futures(JAN5) (CLmain.US)$ delivery was down 16 cents, or 0.2%, at $71.07 a barrel on the New York Mercantile Exchange. Based on the front-month contract, prices ended 3.8% lower last week, according to Dow Jones Market Data. That marked the seventh consecutive week of losses, the longest streak of declines since 2018.
Oil traders couldn't help but take notice over the weekend when China's official consumer-price index showed prices fell in November at the fastest clip in three years, declining 0.5% on a year-over-year and month-over-month basis, according to National Bureau of Statistics.
COMPANIES
Oracle Drops on Earnings Miss
$Oracle (ORCL.US)$ reported adjusted revenue for the second quarter that missed the average analyst estimate. Adjusted revenue $12.9 billion, +5.1% y/y, vs estimates of $13.05 billion. Adjusted EPS came in at $1.34 vs. the expected $1.32.
Eli Lilly Stock Falls on Data Showing Patients Regained Weight After Stopping Zepbound
$Eli Lilly and Co (LLY.US)$ stock was falling Monday after the drugmaker announced results from a study that showed patients regained weight within the year after they stopped taking Zepbound.
Xponential Fitness Plunges 10%+ on SEC Request for Documents
$Xponential Fitness (XPOF.US)$ sank more than 10% Monday to an all-time intraday low after the health-club franchisor disclosed in a filing that it’s received a U.S. Securities and Exchange Commission request to produce “certain documents.”
Department Store Stocks Rally After Macy's Attracts a Buyout Offer
$Macy's (M.US)$ has become a takeover target after a group of investors offered $5.8 billion to buy the retailer and take it private, The Wall Street Journal reported Sunday. $Macy's (M.US)$ rallied 20.0%. $Warby Parker (WRBY.US)$ gained 6%, $Nordstrom (JWN.US)$ and $Kohl's Corp (KSS.US)$ rose 7%.
Cigna Stock Grows After $10B Boost to Stock Buyback, Humana Talks Ending
$Cigna Group (CI.US)$ shares advanced as much as 17.3% after the company announced a $10 billion additional stock buyback. The announcement came after the Wall Street Journal reported that Cigna was abandoning its merger talks with $Humana (HUM.US)$.
Source: Bloomberg, Dow Jones, CNBC, Reuters
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Reza khan : CPI will bring volatility to the market, sit tight!