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05/12/23 Briefing


The S&P 500 futures are down 15 points and are trading 0.3% below fair value, the Nasdaq 100 futures are down 78 points and are trading 0.5% below fair value, and the Dow Jones Industrial Average futures are down 94 points and are trading 0.3% below fair value.

Stock futures indicate a lower open after yesterday's modest declines. Ongoing weakness in mega cap stocks has partially contributed to the negative bias.

Moody's downgraded China's outlook to negative. On a China-related note, the November Caixin Services PMI reflected slightly stronger than expected growth in the services sector. Japan also reported growth in the services sector, but its November PMI was slightly weaker than expected. Australia's Services PMI came in below 50.0 for the second month in a row (i.e. in contraction).

US economic data today includes: final November S&P Global US Services PMI at 9:45 ET; November ISM Non-Manufacturing PMI at 10:00 ET; and JOLTS - Job Openings at 10:00 ET.

The 2-yr note yield is down four basis points to 4.61% and the 10-yr note yield is down seven basis points to 4.22%.

In other news, Israel entered southern Gaza, which is an operation that could decide its war with Hamas, according to The New York Times.

In corporate news:

  • J.M. Smucker (SJM 116.18, +3.75, +3.3%): beats by $0.12, reports revs in-line; lowers FY24 EPS guidance

  • KeyCorp (KEY 13.29, -0.15, -1.1%): issues Q4 and FY23 guidance in shareholder slides; sees Q4 deposits relatively stable yr/yr, loans down 1-3%; lowers Q4 noninterest income forecast

  • GitLab (GTLB 59.85, +6.92, +13.1%): beats by $0.10, beats on revs; guides Q4 EPS above consensus, revs above consensus

  • Robinhood Markets (HOOD 9.75, +0.20, +2.1%): provides November 2023 operating data; customers contributed approximately $1.4 bln of net deposits

  • CVS Health (CVS 70.16, +1.68, +2.5%): reaffirms FY23 guidance; provides FY24 outlook; raises dividend by 10%; highlights path to accelerating long-term growth

  • Tesla (TSLA 233.21, -2.37, -1.0%): likely to face class action lawsuit related to alleged overcharging relating to its insurance, according to Elektrek

  • Johnson & Johnson (JNJ 160.20, +1.32, +0.8%): announces key drivers for long-term competitive growth at Enterprise Business Review; provides FY24 guidance

  • Nokia (NOK 2.91, -0.25, -7.9%) and Ericsson (ERIC 5.36, +0.10, +1.9%): AT&T to accelerate open and Interoperable Radio Access Networks in the United States through new collaboration with Ericsson (ERIC); AT&T's spend could approach roughly $14 billion over the 5-year term of the contract with Ericsson

  • Designer Brands (DBI 8.37, -4.44, -34.7%): misses by $0.22, misses on revs; lowers FY24 EPS below consensus

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Tuesday on a mostly lower note. Japan's Nikkei: -1.4%, Hong Kong's Hang Seng: -1.9%, China's Shanghai Composite: -1.7%, India's Sensex: +0.6%, South Korea's Kospi: -0.8%, Australia's ASX All Ordinaries: -0.9%.

    • In economic data:

      • China's November Caixin Services PMI 51.5 (expected 50.7; last 50.4)

      • Japan's November Tokyo CPI 2.6% yr/yr (last 3.3%) and Core CPI 2.3% yr/yr (expected 2.4%; last 2.7%). November Services PMI 50.8 (expected 51.7; last 51.6)

      • South Korea's November CPI -0.6% m/m (expected -0.2%; last 0.3%); 3.3% yr/yr (expected 3.7%; last 3.8%). Q3 GDP 0.6% qtr/qtr, as expected (last 0.6%); 1.4% yr/yr (last 0.9%)

      • India's November Services PMI 56.9 (expected 58.0; last 58.4)

      • Singapore's October Retail Sales -0.8% m/m (last -1.6%); -0.1% yr/yr (last 0.8%)

      • Hong Kong's November Manufacturing PMI 50.1 (last 48.9)

      • Australia's November Services PMI 46.0 (expected 46.3; last 47.9). Q3 Current Account deficit AUD200 mln (expected surplus of AUD3.1 bln; last surplus of AUD7.8 bln)


  • In news:

    • China and Japan saw slight November growth in the services sector, according to latest PMI figures, while Australia's services sector contracted for the second month in a row.

    • FT reported that more than eight million borrowers in China are in default, eclipsing a prior record of 5.7 million from early 2020.

    • Japan's Core Tokyo CPI was up 2.3% yr/yr in November, representing the slowest growth rate since July 2022.

    • The Reserve Bank of Australia left its cash rate at 4.35%, as expected, noting that potential additional tightening will hinge on incoming inflation figures.



  • Major European indices trade near their flat lines while the U.K.'s FTSE (-0.6%) lags with bank stocks and some consumer names contributing to the weakness. STOXX Europe 600: UNCH, Germany's DAX: +0.2%, U.K.'s FTSE 100: -0.6%, France's CAC 40: +0.3%, Italy's FTSE MIB: UNCH, Spain's IBEX 35: +0.3%.

    • In economic data:

      • Eurozone's October PPI 0.2% m/m, as expected (last 0.5%); -9.4% yr/yr (expected -9.5%; last -12.4%). November Services PMI 48.7 (expected 48.2; last 47.8)

      • Germany's November Services PMI 49.6 (expected 48.7; last 48.2)

      • U.K.'s November Services PMI 50.9 (expected 50.5; last 49.5)

      • France's October Industrial Production -0.3% m/m (expected 0.2%; last -0.6%) and November Services PMI 44.6 (expected 44.5; last 44.6)

      • Italy's November Services PMI 49.5 (expected 48.2; last 47.7)

      • Spain's October Industrial Production -1.5% yr/yr (expected -1.7%; last -1.2%). November Services PMI 51.0 (expected 51.5; last 51.1)


  • In news:

    • Hawkish European Central Bank policymaker Schnabel said that additional rate hikes are unlikely after the release of cooler than expected inflation figures for November and that policymakers should not aim to keep interest rates at their current level through 2024.

    • A YouGov poll showed that one-year inflation expectations in the U.K. remained at 4.2% in October while expectations for longer-term inflation increased to 3.5% from 3.3%.



U.S. equity futures:

  • S&P 500 Futures -17 @ 4,553

  • DJIA Futures: -94 @ 36,111

  • Nasdaq 100 Futures: -88 @ 15,751

Overseas:

  • Europe: DAX +0.2%, FTSE -0.6%, CAC +0.3%

  • Asia: Nikkei -1.4%, Hang Seng -1.9%, Shanghai Composite -1.7%

Commodities:

  • Crude Oil -0.02 @ 73.02

  • Nat Gas +0.024 @ 2.718

  • Gold +1.95 @ 2044.15

  • Silver -0.182 @ 24.725

  • Copper -0.0447 @ 3.8407

Earnings/Guidance:

  • ArcBest ( ARCB 8.64% ) provides Q4 update; sees November total shipments -5% versus +3.7% in October; sees November billed revenue -4% versus +3.9% in October

  • AutoZone ( AZO 0.47% ) beats by $0.98, reports revs in-line

  • Builders FirstSource ( BLDR 0.91% ) provides new 2024-2026 base business targets in Investor Day presentation slides; sees adjusted EPS growth of approximately 17% on CAGR basis

  • Comerica ( CMA 1.46% ) in slides: Q3 average deposits of $65.88 bln, down from $73.98 bln in year-ago period; Q4 through 11/30 deposits at $65.8 bln

  • Core & Main ( CNM 1.21% ) misses by $0.01, reports revs in-line; guides FY23 revs in-line

  • CVS Health ( CVS 2.94% ) reaffirms FY23 guidance; provides FY24 outlook; raises dividend by 10%; highlights path to accelerating long-term growth

  • Deluxe ( DLX 1.36% ) reaffirms FY23 guidance; provides FY24 outlook at Investor Day; also expects to realign its organization structure

  • Designer Brands ( DBI 32.94% ) misses by $0.22, misses on revs; lowers FY24 EPS below consensus

  • Ferguson plc ( FERG 2.84% ) beats by $0.04, beats on revs; reaffirms FY24 revs guidance

  • G-III Apparel ( GIII 3.09% ) beats by $0.72, misses on revs; guides FY24 EPS above consensus, revs below consensus

  • GitLab ( GTLB 10.52% ) beats by $0.10, beats on revs; guides Q4 EPS above consensus, revs above consensus

  • IDT Corp ( IDT 4.47% ) reports Oct Q results, revs decline 6.4%

  • Johnson & Johnson ( JNJ 0.03% ) announces key drivers for long-term competitive growth at Enterprise Business Review; also provides FY24 guidance

  • KeyCorp ( KEY 3.68% ) issues Q4 and FY23 guidance in shareholder slides; sees Q4 deposits relatively stable yr/yr, loans down 1-3%; lowers Q4 noninterest income forecast

  • Kinder Morgan ( KMI 0.50% ) guides FY24 net income per share above consensus, expects to raise dividend in 2024

  • NIO ( NIO 7.72% ) beats on top and bottom lines; sees Q4 revs below consensus

  • Signet Jewelers ( SIG 0.52% ) beats by $0.06, reports revs in-line; guides Q4 revs in-line; guides FY24 EPS in-line

  • Sphere Entertainment Co. ( SPHR 13.74% ) provided updated financial and operating information on its Sphere segment

  • Stantec ( STN 0.17% ) announces 2024 - 2026 strategic plan to deliver purpose driven growth

  • Vale S.A. ( VALE 0.51% ) sees FY23 iron ore production of 315 MT; 2024 production of 310-320 MT

  • Zegna Group ( ZGN 1.27% ) unveils updated group strategy following tom ford fashion acquisition, and strong medium term financial outlook

News:

  • Israel enters southern Gaza, which is an operation that could decide its war with Hamas, according to the New York Times

  • The Biden administration warns lawmakers US will run out of money for Ukraine by end of the year, according to the New York Times

  • Supreme Court justices appear divided on if Purdue Pharma execs should be shielded from lawsuits from the opioid crisis. Decision expected in June, according to the New York Times

  • Moody's affirms China's A1 rating, changes outlook to negative from stable

  • November Class 8 truck orders increased by 9000 to 41,700 units, Act Research

  • Amicus Therapeutics ( FOLD 1.40% ) announces Michael Raab, Current Lead Independent Director, to Become Chairman of Amicus Board of Directors

  • Apple ( AAPL 1.79% ) believes India charger rules might impact production target, according to Reuters

  • Applied Materials ( AMAT 1.20% ) and CEA-Leti announced an expansion of their longstanding collaboration to focus on developing differentiated materials engineering solutions for several specialty semiconductor applications

  • Annovis Bio ( ANVS 5.89% ) Announces Last Patient Last Visit in the Phase III Study of Buntanetap in Parkinson's Disease

  • Ares Management ( ARES 0.16% ) raises approximately $3.3 billion of real estate secondaries capital

  • Arrow Financial ( AROW 0.00% ) announces two-part balance sheet repositioning strategy; expects transactions to be accretive to earnings, net interest margin, and return on assets in future periods

  • Ashford Hospitality Trust ( AHT 2.09% ) provides update on status of loan pools

  • AT&T ( T 3.51% ) to accelerate open and Interoperable Radio Access Networks in the United States through new collaboration with Ericsson (ERIC); AT&T's spend could approach roughly $14 billion over the 5-year term of the contract with Ericsson

  • Beacon Roofing Supply ( BECN 0.41% ) CFO Frank Lonegro departing; effective February 1, 2024; reiterates FY23 guidance

  • Bristol-Myers ( BMY 0.74% ): FDA accepts for priority review bristol myers squibb's application for opdivo (nivolumab) in combination with cisplatin-based chemotherapy for the first-line treatment of adult patients

  • Buckle ( BKE 0.43% ) announces a $2.50 per share special cash dividend

  • CRISPR Therapeutics ( CRSP 1.77% ) Announces Updates to Immuno-Oncology Pipeline and Expansion into Autoimmune Disease

  • Dell ( DELL 0.58% ) discloses unregistered sales of equity securities

  • eGain Comm. ( EGAN 0.00% ) announced that a global investment management company has selected eGain Knowledge Hub to transform experiences for thousands of contact center agents, financial advisors, and knowledge authors

  • El Pollo Loco ( LOCO 0.12% ) announces $12.6 million repurchase agreement

  • Endeavour Silver ( EXK 0.24% ) announces the appointment of Elizabeth Senez as the Company's CFO effective January 1, 2024

  • Enovis Corporation ( ENOV 1.78% ) announces Brady R. Shirley, current President and COO, to retire effective April 1, 2025

  • Fluor ( FLR 0.86% ) was awarded two contracts from Dow (DOW) for construction of the world's first net-zero scope 1 and 2 emissions integrated ethylene cracker and derivatives complex

  • Hanover Insurance ( THG 0.28% ) increases quarterly cash dividend 5% to $0.85/share from $0.81/share

  • Hudbay Minerals ( HBM 3.63% ) releases copper mountain technical report and advances mine stabilization plans

  • IBM ( IBM 0.10% ): AI Alliance launches as an international community of leading technology developers, researchers, and adopters collaborating together to advance open, safe, responsible ai

  • ImmunoGen ( IMGN 0.10% ): FDA grants priority review of ImmunoGen's Supplemental Biologics License Application for ELAHERE in platinum-resistant ovarian cancer - PDUFA action date is April 5, 2024

  • Johnson & Johnson's ( JNJ 0.03% ) TAR-200 granted FDA breakthrough therapy designation

  • Johnson and Johnson ( JNJ 0.03% ) wants to settle baby powder cases, according to Bloomberg

  • Landstar System ( LSTR 1.45% ) names Frank Lonegro as president and CEO, effective Feb 2

  • Linde plc ( LIN 0.18% ) increases hydrogen production in Southeast United States

  • MarketAxess ( MKTX 1.09% ) reports monthly metrics; adoption of MarketAxess X-Pro continues to expand

  • Maxeon Solar ( MAXN 0.31% ) COO will immediately step down from his role and will remain with the Company in a transitional capacity through April 30, 2024

  • Meta Platforms ( META 0.36% ): Threads downloads return to growth amid Wal Mart (WMT) addition as advertiser, according to Tech Crunch

  • Miniso Group ( MNSO 1.83% ) responds to unusual price and trading volume movements and increase plan in shareholding by managements

  • NASDAQ ( NDAQ 0.46% ) reports November volumes; U.S. equity options volume down to 254 mln contracts compared to 269 mln from October

  • Nokia ( NOK 5.70% ) comments on AT&T (T) vendor plans

  • Novo Nordisk ( NVO 1.52% ) aiming to use drug data to prevent weight gain, according to Financial Times

  • Pfizer ( PFE 0.43% ) and Valneva SE (VALN) announce that they have completed recruitment for the Phase 3 trial Vaccine Against Lyme for Outdoor Recreationists (VALOR) (NCT05477524) for Lyme disease vaccine candidate VLA15

  • Replimune ( REPL 50.08% ) shares initial primary analysis results from CERPASS clinical trial in advanced cutaneous squamous cell carcinoma and presents new data from ignyte clinical trial of rp1 in anti-pd1 failed melanoma and non-melanoma skin cancers; study did not meet either of the two primary endpoints of complete response rate

  • Rio Tinto ( RIO 0.72% ) approves $77 mln (A$110 mln) pre-feasibility study to progress development of the Rhodes Ridge project

  • Robinhood Markets ( HOOD 3.77% ) provides November 2023 operating data; customers contributed approximately $1.4 bln of net deposits

  • Roche Hldg ( RHHBY ) unit Genentech Announces Positive Phase III Results for Inavolisib Combination in People With Advanced Hormone Receptor-Positive, HER2-Negative Breast Cancer With a PIK3CA Mutation

  • Sequans Communications ( SQNS 0.00% ) and Renesas Electronics (RNECF) amended MOU to extend the deadline for Renesas to receive confirmation from Japanese tax authorities as to the tax treatment of certain transactions

  • Take-Two ( TTWO 0.74% ) releases trailer for Grand Theft Auto VI

  • TeraWulf ( WULF 3.25% ) announces November 2023 production and operations updates; 323 self-mined BTC

  • Tesla ( TSLA 1.08% ) likely to face class action lawsuit related to alleged overcharging relating to its insurance, according to Elektrek

  • Tesla ( TSLA 1.08% ) strike spreads to Denmark, according to Bloomberg

  • Tradeweb Markets ( TW 0.42% ) reports November 2023 total trading volume of $38.2 trillion and record average daily volume of $1.80 trillion

  • Travere Therapeutics ( TVTX 18.44% ) completes successful pre-NDA Meeting for FILSPARI in IgAN; provides regulatory updates for both IgAN and FSGS

  • trivago ( TRVG 0.00% ) Supervisory Board designated Robin Harries, with an effective date of April 1, 2024, as a temporary member of the management board and chief financial officer, pending his appointment at our general meeting of shareholders in 2024

  • TuSimple Holdings ( TSP 9.39% ) authorizes an additional restructuring plan; to reduce its U.S. workforce by approximately 150 employees or 75% and 19% of its U.S. and global workforces, respectively

  • Vanda Pharma ( VNDA 2.34% ) receives FDA acceptance of NDA for Tradipitant

  • Vaxcyte ( PCVX 0.06% ) reports VAX-24 Phase 1/2 Adult Proof-of-Concept Data Published in The Lancet Infectious Diseases Highlight Best-in-Class Potential of Vaxcyte's 24-Valent Pneumococcal Conjugate Vaccine (PCV) Candidate

  • Xometry ( XMTR 1.70% ) appoints Fabio Rosati as Chair of the Board; succeeds current Chair George Hornig who is retiring

  • XPO, Inc. ( XPO 3.42% ) provides North American LTL operating data for November 2023

M&A:

  • Abcam ( ABCM 0.02% ) acquisition by Danaher (DHR) approved by the High Court of Justice of England and Wales; closing of transaction is expected to occur on December 6

  • Arco Platform ( ARCE 0.00% ) receives shareholder approval of merger agreement to go private

  • Centrais Electricas Brasileiras ( EBR 0.55% ) signs agreement with with Infraestrutura Brasil Holding XX S.A. for the sale of 49% of the capital stock of the Special Purpose Companies (SPEs) Chapada do Piau I Holding S.A. and Chapada do Piau II Holding S.A.

  • Franklin Electric ( FELE 0.31% ) acquires the assets of Action Manufacturing & Supply, Inc; terms of deal not disclosed

  • IAMGOLD ( IAG 1.98% ) annouonces agreement to acquire Vanstar Resources

  • NewMarket ( NEU 0.68% ) announces the acquisition of AMPAC Intermediate Holdings for ~$700 mln; expected to close during the first quarter of 2024

  • OPENLANE ( KAR 0.40% ) to acquire Manheim Canada

  • RLX Technology ( RLX 1.64% ) announces business acquisitions to facilitate its international expansion

  • Ryerson ( RYI 0.68% ) acquires Hudson Tool Steel, a supplier of tool steels and high-speed, carbon, and alloy steels

  • Softbank ( SFTBY ) aiming to spend $513 mln on Cubic Telecom acquisition, according to Nikkei

Syndicate:

  • Atour Lifestyle Hldgs. Ltd. ( ATAT 4.03% ) files Class A ordinary share offering, including ADSs

  • Evergy ( EVRG 0.52% ) prices $1.2 bln of of its convertible notes due 2027

  • Evolent Health ( EVH 10.40% ) announces proposed offering of $350.0 million of convertible senior notes due 2029 to pay down senior term loan

  • EyePoint Pharmaceuticals ( EYPT 6.73% ) commences $175 mln public offering of its common stock; subsequent repurchase of $26.25 mln

  • Integral Ad Science ( IAS 7.01% ) prices offering of 11 mln shares by investment funds affiliated with Vista Equity Partners at $14.00 per share

  • Merit Medical ( MMSI 7.06% ) announces proposed private placement of $550 million of convertible senior notes due 2029

  • Sphere Entertainment Co. ( SPHR 13.74% ) announces private offering of $225 million of convertible senior notes

  • SpringWorks Therapeutics ( SWTX 9.41% ) prices offering of 9,482,758 shares of its common stock at $29.00 per share

IPOs:

  • No IPOs expected to price.

Gapping Up/Down

  • Gapping up:

    • GTLB +14.4%, TVTX +12.7%, VNDA +7%, OPAL +6.5%, NIO +3.3%, IDT +2.8%, CVS +2.4%, ERIC +2.1%, LOCO +2%, HI +1.9%, BKE +1.8%, HOOD +1.6%, WULF +1.3%, EPRT +1.1%, CD +0.9%, FLR +0.9%, CRSP +0.7%, PFE +0.7%


  • Gapping down:

    • DBI -21.9%, ATHE -21%, SWTX -7.7%, NOK -7.3%, IAS -5.8%, MMSI -3.8%, ATAT -2.8%, MNSO -2.5%, LSTR -2%, RLX -1.4%, VALE -1.4%, KEY -1.4%, TSLA -1.1%, FENC -1.1%, RIO -0.7%


Analyst Research (see Upgrades/Downgrades calendar for full list):

  • Upgrades

    • Crown Castle (CCI) upgraded to Equal Weight from Underweight at Wells Fargo; tgt raised to $115

    • First Industrial Realty (FR) upgraded to Buy from Neutral at Mizuho; tgt $55

    • Integra (IART) upgraded to Overweight from Equal Weight at Wells Fargo; tgt raised to $49


  • Downgrades:

    • Albemarle (ALB) downgraded to Underweight from Neutral at Piper Sandler; tgt lowered to $128

    • EastGroup (EGP) downgraded to Neutral from Buy at Mizuho; tgt $185

    • Equitable Holdings (EQH) downgraded to Mkt Perform from Outperform at Keefe Bruyette; tgt $34

    • Livent (LTHM) downgraded to Underweight from Neutral at Piper Sandler; tgt lowered to $15

    • lululemon athletica (LULU) downgraded to Outperform from Strong Buy at Raymond James; tgt raised to $495


  • Others:

    • AbCellera Biologics (ABCL) initiated with an Overweight at KeyBanc Capital Markets; tgt $6

    • CARGO Therapeutics (CRGX) initiated with an Outperform at TD Cowen

    • CARGO Therapeutics (CRGX) initiated with a Buy at Jefferies; tgt $28

    • CARGO Therapeutics (CRGX) initiated with an Overweight at JP Morgan; tgt $23

    • Certara (CERT) initiated with a Sector Weight at KeyBanc Capital Markets

    • Crescent Energy Company (CRGY) initiated with a Strong Buy at Raymond James; tgt $16

    • Datadog (DDOG) initiated with a Sector Outperform at Scotiabank; tgt $138

    • Dynatrace (DT) initiated with a Sector Outperform at Scotiabank; tgt $62

    • Hamilton Insurance Group, Ltd. (HG) initiated with a Buy at Citigroup; tgt $19

    • Hamilton Insurance Group, Ltd. (HG) initiated with a Mkt Outperform at JMP Securities; tgt $21

    • Hilton (H) resumed with an Equal Weight at Wells Fargo; tgt $168

    • Hudson Technologies (HDSN) initiated with a Buy at B. Riley Securities; tgt $17

    • Hyatt Hotels (H) resumed with an Overweight at Wells Fargo; tgt $138


Econ Data:

  • 09:45 ET: S&P Global U.S. Services PMI - Final for Nov (Briefing.com Consensus NA; Prior 50.6)

  • 10:00 ET: ISM Non-Manufacturing PMI for Nov (Briefing.com Consensus 52.4%; Prior 51.8%)

  • 10:00 ET: JOLTS - Job Openings for Oct (Briefing.com Consensus NA; Prior 9.553M)

Earnings:

  • Monday (Dec 4)

    • Morning: SAIC

    • Afternoon: GTLB


  • Tuesday (Nov 5)

    • Morning: AZO CNM CRMT DBI FERG GII SIG SJM

    • Afternoon: ASAN AVAV BOX MDB PLAY PHR S SFIX TOL YEXT


  • Wednesday (Dec 6)

    • Morning: BF.B CPB KFY LOVE OLLI THO UNFI

    • Afternoon: AGX AI BASE BRZE CXM CHPT CHWY GEF GME OXM SPWH SMTC VEEV VRNT


  • Thursday (Dec 7)

    • Morning: CIEN DG GMS

    • Afternoon: AVGO COO CURV DOCU GWRE HPC LULU SMAR SWBI MTN


  • Friday (Dec 8)

    • Morning: MOMO


Asia & Europe detail:

Asia: Nikkei -1.4%, Hang Seng -1.9%, Shanghai Composite -1.7%

Equity indices in the Asia-Pacific region ended Tuesday on a mostly lower note. China and Japan saw slight November growth in the services sector, according to latest PMI figures, while Australia's services sector contracted for the second month in a row. FT reported that more than eight million borrowers in China are in default, eclipsing a prior record of 5.7 million from early 2020. Japan's Core Tokyo CPI was up 2.3% yr/yr in November, representing the slowest growth rate since July 2022. The Reserve Bank of Australia left its cash rate at 4.35%, as expected, noting that potential additional tightening will hinge on incoming inflation figures.

  • In economic data:

    • China's November Caixin Services PMI 51.5 (expected 50.7; last 50.4)

    • Japan's November Tokyo CPI 2.6% yr/yr (last 3.3%) and Core CPI 2.3% yr/yr (expected 2.4%; last 2.7%). November Services PMI 50.8 (expected 51.7; last 51.6)

    • South Korea's November CPI -0.6% m/m (expected -0.2%; last 0.3%); 3.3% yr/yr (expected 3.7%; last 3.8%). Q3 GDP 0.6% qtr/qtr, as expected (last 0.6%); 1.4% yr/yr (last 0.9%)

    • India's November Services PMI 56.9 (expected 58.0; last 58.4)

    • Singapore's October Retail Sales -0.8% m/m (last -1.6%); -0.1% yr/yr (last 0.8%)

    • Hong Kong's November Manufacturing PMI 50.1 (last 48.9)

    • Australia's November Services PMI 46.0 (expected 46.3; last 47.9). Q3 Current Account deficit AUD200 mln (expected surplus of AUD3.1 bln; last surplus of AUD7.8 bln)


---Equity Markets---

  • Japan's Nikkei: -1.4%

  • Hong Kong's Hang Seng: -1.9%

  • China's Shanghai Composite: -1.7%

  • India's Sensex: +0.6%

  • South Korea's Kospi: -0.8%

  • Australia's ASX All Ordinaries: -0.9%

---FX---

  • USD/JPY: -0.1% to 147.05

  • USD/CNH: +0.1% to 7.1539

  • USD/INR: -0.1% to 83.32

Europe: DAX +0.2%, FTSE -0.6%, CAC +0.3%

Major European indices trade near their flat lines while the U.K.'s FTSE (-0.6%) lags with bank stocks and some consumer names contributing to the weakness. Hawkish European Central Bank policymaker Schnabel said that additional rate hikes are unlikely after the release of cooler than expected inflation figures for November and that policymakers should not aim to keep interest rates at their current level through 2024. A YouGov poll showed that one-year inflation expectations in the U.K. remained at 4.2% in October while expectations for longer-term inflation increased to 3.5% from 3.3%.

  • In economic data:

    • Eurozone's October PPI 0.2% m/m, as expected (last 0.5%); -9.4% yr/yr (expected -9.5%; last -12.4%). November Services PMI 48.7 (expected 48.2; last 47.8)

    • Germany's November Services PMI 49.6 (expected 48.7; last 48.2)

    • U.K.'s November Services PMI 50.9 (expected 50.5; last 49.5)

    • France's October Industrial Production -0.3% m/m (expected 0.2%; last -0.6%) and November Services PMI 44.6 (expected 44.5; last 44.6)

    • Italy's November Services PMI 49.5 (expected 48.2; last 47.7)

    • Spain's October Industrial Production -1.5% yr/yr (expected -1.7%; last -1.2%). November Services PMI 51.0 (expected 51.5; last 51.1)


---Equity Markets---

  • STOXX Europe 600: UNCH

  • Germany's DAX: +0.2%

  • U.K.'s FTSE 100: -0.6%

  • France's CAC 40: +0.3%

  • Italy's FTSE MIB: UNCH

  • Spain's IBEX 35: +0.3%

---FX---

  • EUR/USD: -0.2% to 1.0820

  • GBP/USD: -0.1% to 1.2623

  • USD/CHF: +0.2% to 0.8739

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