S&P futures are up 0.3% in Friday morning trading, following a mixed Thursday session where energy, exchanges, regional banks, and department stores outperformed, while apparel, materials, and hospitals lagged. NVDA-US was a standout among the Mag 7. Treasuries were slightly weaker, the dollar index down 0.1%, gold steady, Bitcoin futures up 1%, and WTI crude up 1.5%, bringing its weekly gain to over 9%.
Markets are in a holding pattern ahead of the September employment report, which is key to the 25 vs 50 bp Fed rate cut debate. Middle East tensions remain an overhang, but there was no notable market impact from the resolution of port strikes on the East and Gulf Coasts. China stimulus excitement continues with a rally in Hong Kong. Looking ahead, focus will shift to CPI data, FOMC minutes, Fedspeak, Q3 earnings season, and Tesla’s robotaxi event next week.
In corporate news, XOM-US guided to an in-line Q3 EPS, RIVN-US lowered FY delivery guidance due to component shortages, and ALB-US rose on reports that RIO-US could make a sizable lithium acquisition. B-US climbed after reports that APO-US is nearing a deal to acquire the company for more than $45 per share. SAVE-US fell sharply amid talks with bondholders regarding a potential bankruptcy filing.
US equities closed lower on Thursday, with the Dow down 0.44%, S&P 500 down 0.17%, and Nasdaq off 0.04%. The Russell 2000 fell by 0.68%. Both the S&P and Nasdaq are on track to end lower for the week after three straight weeks of gains. Laggards included apparel (LEVI-US), industrial metals, chemicals, media, biotech, and food sectors. Big tech was mixed, with NVDA-US standing out as a gainer. Outperformers included energy stocks, regional banks, department stores, and casinos. Treasuries were weaker, with the curve flattening, while the dollar index rose 0.3%, driven by sterling’s weakness on dovish Bank of England comments. Gold gained 0.4%, Bitcoin futures rose 1.3%, and WTI crude surged 5.1%, near its best levels, after President Biden said Israel targeting Iranian oil assets was under consideration.
Macroeconomic Overview:
A relatively quiet session was driven by soft-landing optimism, supported by the highest ISM Services print in 20 months, though inflation and employment trends raised caution. Weekly initial jobless claims were slightly above consensus, and factory orders contracted unexpectedly in August. Market participants are waiting for September’s Non-Farm Payrolls (NFP) report, with the 25 vs. 50 bp Fed rate cut debate ongoing. Geopolitical risks persist due to potential Israeli retaliation for Iran’s missile strike. Meanwhile, China’s stimulus excitement faded, with Hong Kong pulling back after a strong surge.
Notable Corporate News by GICS Sector:
Energy
- CEG-US (Constellation Energy): Up 4.5%. Google is reportedly exploring using nuclear power from Constellation Energy for its data centers, as stated by Google CEO Sundar Pichai.
Information Technology
- NVDA-US (NVIDIA): Up 3.3%. CEO Jensen Huang said demand for the Blackwell product is “insane,” with full production underway, as noted in a CNBC interview.
- WOLF-US (Wolfspeed): Down 5.9%. Downgraded to underperform by Mizuho Securities due to concerns about softer global electric vehicle (EV) sales and increased silicon carbide (SiC) supply from China.
- RZLV-US (Rezolve Ai): Up 5.3%. The company announced a strategic partnership with MSFT-US to integrate its AI-powered Brain Suite into Microsoft Azure.
Consumer Discretionary
- LEVI-US (Levi Strauss): Down 7.7%. Q3 EPS beat expectations, but revenue missed, leading the company to lower its Q4 and FY sales growth guidance. Positive takeaways included margin expansion and strength in direct-to-consumer business.
- LUV-US (Southwest Airlines): Up 3.2%. Director Rakesh Gangwal disclosed insider purchases totaling 3.6M shares, signaling confidence in the company’s future.
Health Care
- HUM-US (Humana): Down 1.9%. Downgraded to underperform by Bank of America, citing concerns over the potential revenue headwind from the company losing its top Star ratings position, which could significantly impact 2026 earnings.
- HIMS-US (Hims & Hers Health): Down 9.6%. The FDA removed LLY-US‘s weight-loss drug from its shortage list, further pressuring compounded GLP-1 products.
Industrials
- EVGO-US (EVgo): Up 60.8%. Upgraded to overweight by JPMorgan, citing higher utilization and charging rates, despite a muted EV backdrop. JPMorgan also highlighted expectations for the company to reach EBITDA break-even by the end of 2025.
Consumer Staples
- WWW-US (Wolverine World Wide): Up 4.9%. Upgraded to outperform by BNP Paribas Exane, which cited new retail partnerships for the Saucony brand, including with Footlocker and Finish Line, as well as strong momentum in China.
Utilities
- CEG-US (Constellation Energy): Google’s interest in using nuclear power for its data centers boosted the stock, as discussed by Google CEO Sundar Pichai.
Financials
- BAC-US (Bank of America): Berkshire Hathaway sold another 8.5M shares of Bank of America, signaling continued divestment from the stock.
Materials
- NGVT-US (Ingevity): Down 11.8%. CEO John Fortson resigned effective October 2, with the company appointing director Fernandez-Moreno as interim CEO during the search for a permanent replacement.
Eco Data Releases | Friday October 4h, 2024
S&P 500 Constituent Earnings Announcements | Friday October 4h, 2024
No S&P 500 Constituents report earnings today
Data sourced from FactSet Data Systems
