Traders Market Weekly: Geopolitics and Stormy Weather

Viewing 15 posts - 16 through 30 (of 91 total)
  • Author
  • #69907

    Match Group (MTCH 43.34, +5.45, +14.4%): Elliott Investment Management aiming to build stake in Match Group, according to WSJ


    CrowdStrike (CRWD 266.90, +5.62, +2.2%): upgraded to Overweight from Equal-Weight at Morgan Stanley

    Netflix (NFLX 476.65, -8.38, -1.7%): downgraded to Neutral from Buy at Citigroup


    Extreme Networks (EXTR 16.41, -1.11, -6.3%): lowers Q2 revenue guidance below consensus, reflecting industry headwinds of channel digestion and elongated sales cycles


    JetBlue Airways (JBLU 5.52, -0.24, -4.2%): COO Joanna Geraghty named CEO, effective February 2024; succeeds Robin Hayes; reaffirms Q4 guidance

    Boeing (BA 227.41, -1.59, -0.7%): continued fallout from 737 MAX 9 plug issue


    The November trade balance was better than expected, showing a deficit of $63.2 billion (consensus -$64.7 billion) versus a downwardly revised $$64.5 billion (from -$64.3 billion) in October.

    The key takeaway from the report is that exports were $4.8 billion less than October exports while imports were $6.1 billion less than October imports. The drop in both exports and imports fits with a weakening global economic environment.


    Morning Market
    Dow 37408.45 -274.56 (-0.73%)
    Nasdaq 14753.00 -90.77 (-0.61%)
    SP 500 4737.77 -25.77 (-0.54%)
    10-yr Note +1/32 4.021
    NYSE Adv 466 Dec 2161 Vol 89 mln
    Nasdaq Adv 1027 Dec 2854 Vol 1.0 bln

    Industry Watch
    Strong: Health Care
    Weak: Materials, Real Estate, Energy, Industrials, Information Technology, Financials, Consumer Discretionary

    Moving the Market
    — Broad retreat after yesterday’s rally
    — Q4 revenue warning from Microchip Technology (MCHP) that was tied to a weakening economic environment, and Samsung Electronics indicating its Q4 operating profit will be lower than expected
    — 10-yr note yield moving higher after settling at 4.00% yesterday

    Ten of the 11 S&P 500 sectors are trading down and six of them are down by at least 0.8%. The materials (-1.1%), real estate (-1.0%), energy (-1.0%), and information technology (-0.9%) sectors show some of the steepest declines.

    The information technology sector has been weighed down by a big loss in Hewlett Packard Enterprise (HPE 16.20, -1.51, -8.5%), which is in discussions to acquire Juniper Networks (JNPR 36.97, +6.75, +22.3%) for $13 billion, according to The Wall Street Journal.

    Many semiconductor-related components are also weighing down the info tech sector after Microchip (MCHP 83.69, -1.26, -1.5%) issued a Q4 revenue warning, citing weakening economic environment.

    Health care sector is the lone outperformer with a gain, up 0.5%. Illumina (ILMN 141.45, +7.63, +5.7%) is providing a boost to the health care sector after issuing above-consensus Q4 revenue guidance.


    Treasury yields are moving lower from overnight levels,but are still elevated compared to yesterday’s settlement levels.

    The 10-yr note yield is up one basis point from yesterday at 4.01% after hitting 4.04% earlier.

    2-yr: UNCH at 4.35%
    3-yr: UNCH at 4.11%
    5-yr: +1 bp to 3.96%
    10-yr: UNCH at 4.00%
    30-yr: -1 bp to 4.17%


    Inflation surpassed labor quality in December as top business problem

    WASHINGTON, D.C. (Jan. 9, 2024) – The NFIB Small Business Optimism Index increased 1.3 points in December to 91.9, marking the 24th consecutive month below the 50-year average of 98. Twenty-three percent of small business owners reported that inflation was their single most important problem in operating their business, up one point from last month, and replacing labor quality as the top concern.

    “Small business owners remain very pessimistic about economic prospects this year,” said NFIB Chief Economist Bill Dunkelberg. “Inflation and labor quality have consistently been a tough complication for small business owners, and they are not convinced that it will get better in 2024.”

    Key findings include:

    Small business owners expecting better business conditions over the next six months improved six points from November to a net negative 36% (seasonally adjusted), and 25 percentage points better than last June’s reading of a net negative 61%.
    Seasonally adjusted, a net 29% of owners plan to raise compensation in the next three months, down one point from November.
    The net percent of owners raising average selling prices was unchanged from November at a net 25% (seasonally adjusted).
    The net percent of owners who expect real sales to be higher improved four points from November to a net negative 4% (seasonally adjusted), the highest reading since January 2022.
    As reported in NFIB’s monthly jobs report, 40% (seasonally adjusted) of all owners reported job openings they could not fill in the current period. Owners’ plans to fill open positions remain elevated, with a seasonally adjusted net 16% planning to create new jobs in the next three months. As long as consumer spending holds up, small businesses will have a need for more workers.

    Fifty-eight percent of owners reported capital outlays in the next six months, down three points from November. Of those making expenditures, 40% reported spending on new equipment, 22% acquired vehicles, and 19% improved or expanded facilities. Eleven percent spent money on new fixtures and furniture and 5% acquired new buildings or land for expansion. Twenty-four percent (seasonally adjusted) plan capital outlays in the next few months, up one point from November.

    A net negative 11% of all owners (seasonally adjusted) reported higher nominal sales in the past three months, a six-point improvement from November. The net percent of owners expecting higher real sales volumes improved four points to a net negative 4%.

    The net percent of owners reporting inventory gains increased one point to a net negative 2%. Not seasonally adjusted, 12% reported increases in stocks and 15% reported reductions. A net negative 5% of owners viewed current inventory stocks as “too low” in December, down five points from November. By industry, shortages are reported most frequently in the finance (16%), retail (12%), and manufacturing (11%) sectors. A net negative 5% of owners plan inventory investment in the coming months, weakening sales will be satisfied out of current inventories.

    The net percent of owners raising average selling prices was unchanged from November at a net 25% seasonally adjusted. Seasonally adjusted, a net 32% plan price hikes in the next three months.

    Price hikes were the most frequent in finance (52% higher, 12% lower), retail (49% higher, 8% lower), construction (41% higher, 12% lower), services (36% higher, 5% lower), and professional services (33% higher, 4% lower).

    Twenty-three percent of owners reported that inflation was their single most important problem in operating their business, up one point from last month and surpassing labor quality as the top problem.

    Seasonally adjusted, a net 36% reported raising compensation, unchanged from November. A seasonally adjusted net 29% plan to raise compensation in the next three months. Nine percent of owners cited labor costs as their top business problem, up one point from November. Twenty percent said that labor quality was their top business problem.

    The frequency of reports of positive profit trends was a net negative 25%, seven points better than November. Among the owners reporting lower profits, 31% blamed weaker sales, 17% blamed the rise in the cost of materials, 16% cited lower prices, and 9% cited labor costs. For owners reporting higher profits, 48% credited sales volumes, 19% cited usual seasonal change, and 14% cited higher selling prices.

    Three percent of owners reported that all their borrowing needs were not satisfied. Twenty-five percent reported all credit needs met and 61% said they were not interested in a loan. A net 8% reported their last loan was harder to get than in previous attempts.

    The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the fourth quarter of 1973 and monthly surveys since 1986. Survey respondents are randomly drawn from NFIB’s membership. The report is released on the second Tuesday of each month. This survey was conducted in December 2023.


    Dow -157.85 at 37525.16, Nasdaq +13.94 at 14857.71, S&P -7.04 at 4756.50

    The A-D line favored decliners by a 7-to-3 margin at the NYSE and by a nearly 2-to-1 margin at the Nasdaq. The major indices were able to close off their lows of the day, though, thanks to support from mega cap stocks that recovered from early weakness.

    NVIDIA (NVDA 531.40, +8.87, +1.7%) was a standout winner in that respect after being down as much as 1.1% at its low this morning.

    Alphabet (GOOG 142.56, +2.03, +1.4%), (AMZN 151.37, +2.27, +1.5%), and Microsoft (MSFT 375.79, +1.10, +0.3%) had all been trading down earlier, too.

    Losses in Meta Platforms (META 357.43, -1.23, -0.3%), which had been trading up at its best level of the day, Apple (AAPL 185.14, -0.42, -0.2%), and Tesla (TSLA 234.96, -5.49, -2.3%) countered some of the strength from the aforementioned names. The Vanguard Mega Cap Growth ETF (MGK) logged a 0.3% gain.

    The overall negative vibe was partially a reaction to a Q4 revenue warning from Microchip Technology (MCHP 85.34, -0.30, -0.4%) that was tied to a weakening economic environment. In a related action, Samsung Electronics said it expects its Q4 operating profit to be down 35% year-over-year and below analysts’ expectations.

    Four of the S&P 500 sectors logged a gain while seven of them saw a decline. The information technology sector (+0.3%) was the top performer while the energy (-1.6%) and materials (-1.1%) sectors registered the largest declines.

    The 2-yr note yield settled three basis points higher at 4.38% and the 10-yr note yield rose two basis points to 4.02%. On a related note, today’s $52 billion 3-yr note auction met strong demand.

    Dow Jones Industrial Average: -0.4%
    S&P 500: -0.3%
    S&P Midcap 400: -1.2%
    Nasdaq Composite: -1.1%
    Russell 2000: -1.9%


    Equity indices in the Asia-Pacific region ended Wednesday on a mostly lower note while Japan’s Nikkei (+2.0%) outperformed, reaching a level not seen since 1990.

    Japan’s Nikkei: +2.0%
    Hong Kong’s Hang Seng: -0.6%
    China’s Shanghai Composite: -0.5%
    India’s Sensex: +0.4%
    South Korea’s Kospi: -0.8%
    Australia’s ASX All Ordinaries: -0.6%




    November Overtime Pay 0.9% yr/yr (last -0.1%) and November Average Cash Earnings 0.2% yr/yr (expected 1.5%; last 1.5%)

    There was renewed speculation that the Bank of Japan may refrain from exiting negative rate policy in the near term after the deceleration in Tokyo CPI, which could slip below the BoJ’s target. In addition, average cash earnings growth missed November expectations.


    Passenger vehicle sales in China were up 8.5% yr/yr in December, below the 9.0% growth rate in the preliminary reading.


    South Korea
    December Unemployment Rate 3.3% (last 2.8%)


    November CPI Indicator 4.3% yr/yr (expected 4.4%; last 4.9%)


    Major European indices trade near their flat lines.

    —Equity Markets—

    STOXX Europe 600: UNCH
    Germany’s DAX: -0.1%
    U.K.’s FTSE 100: -0.3%
    France’s CAC 40: -0.1%
    Italy’s FTSE MIB: UNCH
    Spain’s IBEX 35: -0.1%

Viewing 15 posts - 16 through 30 (of 91 total)
  • You must be logged in to reply to this topic.