Stocks Fluctuate as Economic News, Bond Yields Strengthen


Today’s U.S. stock market is mixed, with the Dow Jones Industrials posting a 3-1/2 month high. The S&P 500 Index ($SPX) (SPY) is down -0.02%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.31%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.30%. Markets will close early today at 1300 EST for the Thanksgiving holiday.

The news today was mixed for stocks after S&P reported that U.S. manufacturing activity in November contracted more than expected, but services activity in November expanded more than expected. U.S. stock index futures are carrying over support from today’s rally in the Euro Stoxx 50 to a 3-1/2 month high after ECB President Lagarde said ECB policymakers are in a position to pause their tightening campaign.

Bank of America said EPFR Global data showed global stock funds had inflows of about $49 billion in the two weeks through Nov 21, the most in 1-3/4 years. Investment Company Institute data showed about $29.1 billion flowed into U.S. money-market funds in the week through Nov 21, pushing total assets to a record $5.763 trillion.

The markets are discounting a 5% chance for a +25 bp rate hike at the next FOMC meeting on Dec 12-13, a 13% chance for that +25 bp rate hike at the following FOMC meeting on Jan 30-31, 2024, a 14% chance for a -25 bp rate cut at the March 19-20, 2024, FOMC meeting, and a 55% chance for that same -25 bp rate cut at the Apr 30-May 1, 2024, FOMC meeting.

U.S. and European government bond yields rose today. The 10-year T-note yield rose to a 1-week high of 4.490% and is up +7.4 bp at 4.478%. The 10-year German bund yield rose to a 1-1/2 week high of 2.663% and is up +2.9 bp at 2.647%. The 10-year UK gilt yield rose to a 1-1/2 week high of 4.323% and is up +4.5 bp at 4.301%.

Overseas stock markets were mixed, with the Euro Stoxx 50 up +0.24%, China’s Shanghai Composite Index down -0.68%, and Japan’s Nikkei Stock Index up +0.52%.

Stock movers included Eli Lilly (LLY) up more than +2% after data showed U.S. retail sales of its psoriasis and psoriatic arthritis drug Taltz up +4.6%; iRobot (IRBT) up more than +30% after news is set to win EU antitrust approval for its acquisition; Visa Outdoor (VSTO) up more than +4% after receiving an unsolicited proposal; crypto currency-related stocks climbing with CleanSpark (CLSK) and Marathon Digital (MARA) up more than +3%, Coinbase Global (COIN), MicroStrategy (MSTR), and Riot Platforms (RIOT) up more than +1%; Nvidia (NVDA) down more than -1% on news of a delayed launch of a new AI chip; Apple (AAPL) down nearly 1% after Counterpoint Research data showed iPhone sales in China fell 4% y/y; Palantir (PLTR) down more than -2% on signs of insider selling; and Gilead Sciences (GILD) down -0.79% after data showed sales of its Genvoya drug falling -5.5%.

Across the markets, December 10-year T-notes (ZNZ23) are down -12 ticks, and the 10-year T-note yield is up +6.4 bp at 4.469%. The dollar index (DXY00) is down by -0.52%, while EUR/USD (^EURUSD) is up by +0.28%. USD/JPY (^USDJPY) is down by -0.02%. December gold (GCZ3) is up +8.0 (+0.40%), and Dec silver (SIZ23) is up +0.587 (+2.48%).

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