The S&P 500 futures are up three points and are trading 0.1% above fair value, the Nasdaq 100 futures are up 34 points and are trading 0.2% above fair value, and the Dow Jones Industrial Average futures are up 35 points and are trading 0.1% above fair value.
Equity futures indicate a higher open ahead of today's FOMC meeting, which will include a new policy directive and updated Summary of Economic Projections at 2:00 p.m. ET, followed by Fed Chair Powell's press conference at 2:30 p.m. ET. The Fed is expected to hold rates steady today, so market participants will be focused on how the the dot plot and Fed Chair Powell's tone in his press conference fit with rate cut narrative that has driven recent gains.
The BOE and ECB will both have policy announcements on Thursday.
The 2-yr note yield is down three basis points at 4.71% and the 10-yr note yield is down two basis points at 4.18%.
The weekly MBA Mortgage Applications Index climbed 7.4%. Other data today include:
08:30 ET: November PPI (Briefing.com consensus 0.1%; prior -0.5%) and Core PPI (Briefing.com consensus 0.2%; prior 0.0%)
In corporate news:
Pfizer (PFE 26.65, -1.93, -6.8%): announces changes to its commercial operations following previously announced Seagen (SGEN) acquisition; reaffirms FY23 guidance, sees FY24 EPS and revenue below consensus including expected contribution from Seagen acquisition
Tesla (TSLA 234.39, -2.62, -1.1%): recalled 2 mln cars over Autopilot issue, according to Bloomberg; likely to lose government tax credits on some Model 3 models, according to Reuters
Southwest Air (LUV 29.47, -0.84, -2.8%): provides Q4 guidance update; expects Q4 unit revenues to improve to the better end of its previous guidance range
Amgen (AMGN 274.01, +0.01, +0.01%): increases quarterly cash dividend to $2.25/share from $2.13/share
General Electric (GE 122.70, +0.38, +0.3%): named a top pick at Bank of America
Capital One (COF 120.99, +0.70, +0.6%) and Ally Financial (ALLY 30.41, +0.41, +1.4%): upgraded to Equal Weight from Underweight at Morgan Stanley
Reviewing overnight developments:
Equity indices in the Asia-Pacific region were mixed on Wednesday ahead of the FOMC policy decision and release of the Summary of Economic Projections. Japan's Nikkei: +0.3%, Hong Kong's Hang Seng: -0.9%, China's Shanghai Composite: -1.2%, India's Sensex: +0.1%, South Korea's Kospi: -1.0%, Australia's All Ordinaries: +0.3%.
In economic data:
China's November Outstanding Loan Growth 10.8% yr/yr (expected 11.0%; last 10.9%)
Japan's Tankan Q4 Large Manufacturers Index 12 (expected 10; last 9) and Large Non-Manufacturers Index 30 (expected 27; last 27)
South Korea's November Unemployment Rate 2.8% (last 2.5%); November Export Price Index -7.2% yr/yr (last -9.3%) and Import Price Index -8.5% yr/yr (last -9.9%)
In news:
China was a laggard as investors were reportedly underwhelmed by the fiscal and monetary stimulus panning coming out of the Central Economic Work Conference.
Japan saw some good news with better-than-expected readings for the Q4 Tankan Large Manufacturers and Large Non-Manufacturers Indexes. That came against a backdrop of reports indicating Prime Minister Kashida will soon replace several Cabinet minsters in response to Japan's political fundraising scandal.
In a mid-year outlook, Australia reduced its FY24 budget deficit expectation to AUD$1.1 billion from AUD$13.9 billion.
Major European indices are sporting modest gains, supported in part by a drop in interest rates amid budding rate-cut expectations. STOXX Europe 600: +0.3%, Germany's DAX: +0.2%, UK's FTSE 100: +0.3%, France's CAC 40: +0.4%, Italy's FTSE MIB: +0.3%, Spain's IBEX 35: +0.2%.
In economic data:
Eurozone's October Industrial Production -0.7% m/m (expected -0.3%; last -1.0%) and -6.6% yr/yr (expected -4.6%; last -6.8%)
UK's October Construction Output -0.5% m/m (expected -0.2%; last 0.4%) and up 1.1% yr/yr (expected 1.2%; last 2.8%); October GDP -0.3% m/m (expected 0.0%; last 0.2%) and up 0.3% yr/yr (expected 0.6%; last 1.3%); October Industrial Production -0.8% m/m (expected -0.1%; last 0.0%); October Trade Balance -GBP17.03 billion (expected -GBP14.30 billion; last -GBP14.29 billion)
Italy's Quarterly Unemployment Rate 7.6% (expected 7.6%; last 7.7%)
In news:
The UK's weaker than expected October GDP data featured a 0.3% month-over-month decline and is pulling forward the market's expected rate cut view, which in turn has weighed on the pound.
The BOE and ECB will both have policy announcements on Thursday.
In other economic news, eurozone industrial production hit a 3-year low in October.
Germany has reportedly agreed on a FY24 budget plan that will save approximately 17 billion euros through costs cuts and ending climate-damaging subsidies, according to CNBC.
U.S. equity futures:
S&P 500 Futures +5 @ 4,648
DJIA Futures: +33 @ 36,611
Nasdaq 100 Futures: +32 @ 16,386
Overseas:
Europe: DAX +0.2%, FTSE +0.3%, CAC +0.4%
Asia: Nikkei +0.3%, Hang Seng -0.9%, Shanghai Composite -1.2%
Commodities:
Crude Oil +0.33 @ 68.94
Nat Gas +0.015 @ 2.326
Gold +3.55 @ 1996.75
Silver -0.024 @ 22.992
Copper -0.0162 @ 3.7713
Earnings/Guidance:
ABM Industries (
Cognyte Software (
McEwen Mining (
Pfizer (
Photronics (
REV Group (
Scorpio Tankers Inc. (
Southwest Air (
U.S. Silica (
News:
United Nations votes to demand immediate ceasefire in Gaza, but vote is non-binding, according to CNN
China President Xi Jinping did not signal upcoming large stimulus, according to Bloomberg
New York Supreme Court orders redrawing of congressional map, giving Democrats opportunity to shift 2-6 House seats from Republican control after the 2024 election, according to the New York Times
PSR provisionally proposes to cap cross-border interchange fees on credit and debit cards to protect UK businesses
EU issues statement of President von der Leyen on the outcome of COP28
Airbnb (
Alibaba (
AllianceBernstein (
Alnylam (
Americold Realty Trust JV (
Amgen (
Applied Materials (
ATS Corp (
Autohome (
BAE Systems (
Black Diamond Therapeutics (
BridgeBio Pharma (
C4 Therapeutics (
Cal-Maine Foods (
Caribou Biosciences (
Cavco Industries (
Clean Energy Fuels (
Compass (
Copa Holdings (
Daqo New Energy (
Distribution Solutions Group (
Eldorado Gold (
Foxconn (
Fox Corporation's (
Franklin Resources (
Ginkgo Bioworks (
Google (
Heartland Financial (
Horizon Bancorp (
HUTCHMED (
HUTCHMED (
Lifecore Biomedical (
LifeMD (
Lifezone Metals (
Lockheed Martin's (
Medifast (
Mid-America Aptmt (
Oracle (
Pfizer (
RB Global (
Rekor Systems (
Rocket Lab (
Shell plc (
Tandem Diabetes Care (
Target Hospitality (
TE Connectivity (
Tesla (
Tesla (
UGI Corp (
Unilever PLC (
Verastem (
Vermilion Energy (
Vertex (
Western Copper (
Whitestone REIT (
Xylem (
Zai Lab (
M&A:
Arlington Asset (
Grainger (
Integra (
Orrstown Financial Services (
Vertex (
Xperi (
XPO, Inc. (
Syndicate:
Old Republic (
SOS Limited (
IPOs:
No IPOs expected to price.
Gapping Up/Down
Gapping up:
CCCC +7.5%, BBAI +6.6%, LFMD +6.4%, SLM +3.8%, TTWO +3.4%, CRBU +2.8%, COMP +2.6%, HCM +2.6%, TTC +2.4%, VERX +2.3%, VET +1.4%, HBNC +1.3%, PLAB +1.3%, ABNB +1.1%, VRTX +1.1%, CVLY +0.8%, UGI +0.7%
Gapping down:
SOS -3.3%, XPEV -2.8%, SHEL -0.6%, WBD -0.5%
Analyst Research (see Upgrades/Downgrades calendar for full list):
Upgrades
Ally Financial (ALLY) upgraded to Equal-Weight from Underweight at Morgan Stanley; tgt raised to $31
BASF AG (BASFY) upgraded to Buy from Sell at UBS
C4 Therapeutics (CCCC) upgraded to Buy from Hold at Stifel; tgt raised to $12
D.R. Horton (DHI) upgraded to Outperform from Mkt Perform at Keefe Bruyette; tgt raised to $164
Opendoor Technologies (OPEN) upgraded to Mkt Perform from Underperform at Keefe Bruyette; tgt $3.50
Q2 Holdings (QTWO) upgraded to Neutral from Underweight at Piper Sandler; tgt raised to $41
Volkswagen AG (VWAGY) upgraded to Neutral from Underperform at Exane BNP Paribas
Downgrades:
Aveanna (AVAH) downgraded to Underweight from Neutral at JP Morgan
Bread Financial (BFH) downgraded to Underweight from Equal-Weight at Morgan Stanley; tgt lowered to $25
Church & Dwight (CHD) downgraded to Sell from Neutral at Citigroup; tgt $90
Coherent (COHR) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt raised to $45
Ferrari (RACE) downgraded to Neutral from Outperform at Exane BNP Paribas
Ferrari (RACE) downgraded to Hold from Buy at HSBC Securities
Ford Motor (F) downgraded to Neutral from Outperform at Exane BNP Paribas; tgt $12
Johnson & Johnson (JNJ) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $163
LyondellBasell (LYB) downgraded to Neutral from Buy at Citigroup; tgt lowered to $98
Shell plc (SHEL) downgraded to Neutral from Outperform at Exane BNP Paribas
Others:
ACADIA Pharmaceuticals (ACAD) initiated with a Buy at Citigroup; tgt $38
Agilent (A) initiated with an Outperform at Wolfe Research; tgt $140
Aris Water Solutions (ARIS) initiated with a Buy at Seaport Research Partners; tgt $15
Axsome Therapeutics (AXSM) initiated with a Buy at Citigroup; tgt $125
Bruker (BRKR) initiated with an Outperform at Wolfe Research; tgt $80
Camping World (CWH) initiated with a Buy at ROTH MKM; tgt $30
CAVA Group (CAVA) initiated with an Outperform at TD Cowen; tgt $46
CCC Intelligent Solutions (CCCS) resumed with a Neutral at Citigroup; tgt $13
Cricut (CRCT) initiated with a Neutral at Goldman; tgt $7
Denali Therapeutics (DNLI) initiated with a Buy at Citigroup; tgt $32
DoubleVerify (DV) initiated with an Overweight at Morgan Stanley; tgt $40
Exact Sciences (EXAS) initiated with an Outperform at Wolfe Research; tgt $95
Guardant Health (GH) initiated with a Peer Perform at Wolfe Research
Illumina (ILMN) initiated with an Outperform at Wolfe Research; tgt $175
Kanzhun Limited (BZ) initiated with an Overweight at JP Morgan; tgt $20
Microsoft (MSFT) initiated with a Buy at Truist
Roblox (RBLX) initiated with an Overweight at Wells Fargo; tgt $49
Thermo Fisher (TMO) initiated with an Outperform at Wolfe Research; tgt $575
Econ Data:
07:00 ET: MBA Mortgage Applications Index for Dec 9 (Briefing.com Consensus NA; Prior 2.8%)
08:30 ET: PPI for Nov (Briefing.com Consensus 0.1%; Prior -0.5%)
08:30 ET: Core PPI for Nov (Briefing.com Consensus 0.2%; Prior 0.0%)
10:30 ET: EIA Crude Oil Inventories for Dec 9 (Briefing.com Consensus NA; Prior NA)
14:00 ET: FOMC Rate Decision (Briefing.com Consensus 5.25-5.50%; Prior 5.25-5.50%)
Earnings:
Monday (Dec 11)
Afternoon: CASY ORCL
Wednesday (Dec 13)
Morning: ABM CGNT PLAB REVG
Afternoon: ADBE NDSN
Thursday (Dec 14)
Morning: JBL
Afternoon: COST LEN
Friday (Dec 15)
Morning: DRI
Asia & Europe detail:
Asia: Nikkei +0.3%, Hang Seng -0.9%, Shanghai Composite -1.2%
Equity indices in the Asia-Pacific region were mixed on Wednesday ahead of the FOMC policy decision and release of the Summary of Economic Projections. China was a laggard as investors were reportedly underwhelmed by the fiscal and monetary stimulus panning coming out of the Central Economic Work Conference. Japan saw some good news with better-than-expected readings for the Q4 Tankan Large Manufacturers and Large Non-Manufacturers Indexes. That came against a backdrop of reports indicating Prime Minister Kashida will soon replace several Cabinet minsters in response to Japan's political fundraising scandal. In a mid-year outlook, Australia reduced its FY24 budget deficit expectation to AUD$1.1 billion from AUD$13.9 billion.
In economic data:
Japan's Tankan Q4 Large Manufacturers Index 12 (expected 10; last 9) and Large Non-Manufacturers Index 30 (expected 27; last 27)
South Korea's November Unemployment Rate 2.8% (last 2.5%); November Export Price Index -7.2% yr/yr (last -9.3%) and Import Price Index -8.5% yr/yr (last -9.9%)
---Equity Markets---
Japan's Nikkei: +0.3%
Hong Kong's Hang Seng: -0.9%
China's Shanghai Composite: -1.2%
India's Sensex: +0.1%
South Korea's Kospi: -1.0%
Australia's All Ordinaries: +0.3%
---FX---
USD/JPY: +0.2% to 145.62
USD/CNH: flat at 7.1938
USD/INR: flat at 83.408
Europe: DAX +0.2%, FTSE +0.3%, CAC +0.4%
Major European indices are sporting modest gains, supported in part by a drop in interest rates amid budding rate-cut expectations. The latter has underpinned the FTSE 100 in the wake of the UK's weaker than expected October GDP data. The 0.3% month-over-month decline in GDP is pulling forward the market's expected rate cut view, which in turn has weighed on the pound. The BOE and ECB will both have policy announcements on Thursday. In other economic news, eurozone industrial production hit a 3-year low in October. Germany has reportedly agreed on a FY24 budget plan that will save approximately 17 billion euros through costs cuts and ending climate-damaging subsidies, according to CNBC.
In economic data:
Eurozone's October Industrial Production -0.7% m/m (expected -0.3%; last -1.0%) and -6.6% yr/yr (expected -4.6%; last -6.8%)
UK's October Construction Output -0.5% m/m (expected -0.2%; last 0.4%) and up 1.1% yr/yr (expected 1.2%; last 2.8%); October GDP -0.3% m/m (expected 0.0%; last 0.2%) and up 0.3% yr/yr (expected 0.6%; last 1.3%); October Industrial Production -0.8% m/m (expected -0.1%; last 0.0%); October Trade Balance -GBP17.03 billion (expected -GBP14.30 billion; last -GBP14.29 billion)
Italy's Quarterly Unemployment Rate 7.6% (expected 7.6%; last 7.7%)
---Equity Markets---
STOXX Europe 600: +0.3%
Germany's DAX: +0.2%
UK's FTSE 100: +0.3%
France's CAC 40: +0.4%
Italy's FTSE MIB: +0.3%
Spain's IBEX 35: +0.2%
---FX---
EUR/USD: -0.1% to 1.0781
GBP/USD: -0.3% to 1.2523
USD/CHF: +0.1% to 0.8758