S&P futures up 0.3% in Wednesday morning trading, following a mixed Tuesday session where the S&P rose for the 10th time in 11 sessions and the Nasdaq hit a new ATH, driven by tech outperformance. Asian markets were mixed, with South Korea down nearly 1.5% but supported by central bank liquidity pledges. European markets gained over 0.5% despite political instability in France. Treasuries were slightly weaker, the dollar index rose 0.1% with yen and Aussie dollar weakness in focus, gold edged down 0.1%, Bitcoin futures rose 0.5%, and WTI crude was up 0.2%.
Focus remains on tech strength, driven by AI tailwinds, and dovish Fed commentary, though officials remain cautious ahead of macro data influencing the 18-Dec decision. November NFP on Friday is expected to be the next significant market mover. Today’s US data includes ADP private payrolls (+158K expected), ISM services (55.5 expected), factory orders (+0.4% expected), and the Fed Beige Book. Chair Powell speaks at 13:45 ET.
Corporate Updates
- Technology: CRM-US rose on strong Q3 revenue and cRPO, MRVL-US beat and guided above on AI silicon strength, PSTG-US rallied on a major hyperscaler design win, OKTA-US rose on robust new product sales, but BASE-US fell on slowing growth.
- Consumer: DLTR-US gained on strong comps, margins, and EPS, while CPB-US declined after sales missed estimates across divisions.
- Healthcare: UNH-US guided 2025 revenue above expectations, with EPS at the high end of Street forecasts.
- Industrials: ODFL-US mid-Q update aligned with guidance for sub-seasonal trends.
- Energy: CRGY-US dropped after announcing an acquisition and secondary offering.
US equities posted a mixed performance on Tuesday in rangebound trading. The Nasdaq hit a fresh record high, while the S&P 500 notched a small gain following Monday’s record close. Outperformers included healthcare distributors, semicap equipment, telecom, networking, grocery, and oil majors, while laggards included regional banks, autos, airlines, entertainment, casinos, and department stores. Treasuries were mostly weaker with curve steepening. The dollar index fell 0.1%, gold rose 0.4%, Bitcoin futures fell 0.2%, and WTI crude climbed 2.7%.
Investors remained focused on upcoming economic data, particularly Friday’s NFP report. October JOLTS job openings beat expectations, showing labor market resilience. Fed officials continued dovish signals, with Daly, Kugler, and Goolsbee noting that further rate cuts are likely as the Fed monitors evolving economic conditions. International developments included South Korea’s parliament blocking martial law declarations and the Bank of Korea convening an emergency meeting. European political risks also garnered attention but had limited market spillover.
Information Technology
- CRDO-US (Credo Technology): +47.9% after FQ2 earnings and revenue beat, driven by strong demand from top customers. Management noted this could be an inflection point, with next-quarter revenue guidance exceeding expectations.
- MCHP-US (Microchip Technology): -7% after guiding December quarter revenue to the low end of prior expectations, citing weaker-than-expected turns orders, elevated inventories, and plans to close Fab 2 for ~$90M in annual savings.
Consumer Discretionary
- OLLI-US (Ollie’s Bargain Outlet Holdings): -2.6% following a downgrade to equal weight by Wells Fargo, which flagged near-term uncertainty due to holiday calendar shifts, tighter inventories, and a less favorable closeout buying environment heading into 2025.
- TSLA-US (Tesla): -1.6% as China-made sales dropped 4.3% y/y in November, marking the second straight monthly decline. CEO Musk also lost a bid to reinstate a $56B pay package.
Industrials
- DCI-US (Donaldson Co.): -6.9% as FQ1 earnings and revenue slightly beat, but margins and FCF fell short. Results in Industrial Solutions and Life Sciences segments lagged expectations.
Health Care
- JANX-US (Janux Therapeutics): +49% on positive interim clinical data for JANX007 in metastatic prostate cancer, showing durable PSA responses and encouraging anti-tumor activity.
- TMDX-US (TransMedics Group): -16.1% after cutting FY revenue guidance below consensus and announcing CFO changes ahead of its 10-Dec investor day.
Real Estate
- SHO-US (Sunstone Hotel Investors): +10.1% after Bloomberg reported Trinity Investments expressed interest in acquiring the company for ~$13/share, representing a 20%+ premium to Monday’s close.
Telecommunication Services
- T-US (AT&T): +4.6% on updated guidance ahead of an analyst day, highlighting plans to return $40B+ to shareholders over three years through dividends and buybacks.
Materials
- MP-US (MP Materials): +11.1% after China announced a ban on exports of rare-earth minerals like gallium and germanium to the US. MP is the largest producer of rare-earth materials in the Western Hemisphere.
- X-US (United States Steel): -8% after President-elect Trump reiterated his pledge to block foreign acquisitions of US Steel.
Financials
- BLK-US (BlackRock): Confirmed a $12B all-stock acquisition of HPS Investment Partners, a deal expected to diversify its alternatives business.
Eco Data Releases | Wednesday December 4th, 2024
S&P 500 Constituent Earnings Announcements | Wednesday December 4th, 2024
Data sourced from FactSet Research Systems Inc.
