Stock Market Update

The S&P 500 futures are down four points and are trading fractionally below fair value, the Nasdaq 100 futures are up two points and are trading fractionally above fair value, and the Dow Jones Industrial Average futures are down 33 points and are trading fractionally below fair value.

There is a wait-and-see tone in front of the release of the November Employment Situation Report at 8:30 a.m. ET. Market participants are eager to see if there was a strong rebound in nonfarm payrolls following the effects of the hurricanes and the Boeing machinists strike that adversely impacted payroll numbers in October.

The employment data will also be a catalyst for the fed funds futures market. Currently, there is a 70.2% probability of a 25-basis points rate cut to 4.25-4.50% at the December FOMC meeting and only an 18.0% probability of another 25-basis points rate cut to 4.00-4.25% at the January FOMC meeting, according to the CME FedWatch Tool.

Separately, participants will also be watching the price action to see how the stock market responds to yesterday's losses, which occurred despite Bitcoin's momentous run above $100,000 before it, too, relented to selling pressure.

Ahead of the employment report, the 2-yr note yield is up one basis point to 4.16% and the 10-yr note yield is unchanged at 4.18%. The U.S. Dollar Index is up 0.1% to 105.79.

In corporate news:

• Asana (ASAN 19.37, +3.91, +25.3%) beats by $0.05, beats on revs; guides Q4 EPS in-line, revs in-line
• Boeing (BA 157.32, +0.65, +0.4%): FAA notes that Boeing's (BA) plan is to slowly restart production later in December, according to Reuters
• Chevron (CVX 159.05, -0.28, -0.2%) announces FY25 capex guidance range of $14.5 to $15.5 bln; Also expects to recognize restructuring charge of $700-$900 mln after-tax in Q4
• DocuSign (DOCU 93.80, +10.12, +12.1%) beats by $0.03, beats on revs; guides Q4 revs above consensus
• GitLab (GTLB 72.96, +6.92, +10.5%) beats by $0.08, beats on revs; guides Q4 EPS above consensus, revs above consensus; appoints new CEO
• Guidewire Software (GWRE 206.47, -0.65, -0.3%) beats by $0.13, beats on revs; guides Q2 revs above consensus; guides FY25 revs above consensus
• Hewlett Packard Enterprise (HPE 22.60, +0.84, +3.9%) beats by $0.02, beats on revs; guides Q1 EPS in-line; Juniper transaction expected to close early part of 2025
• lululemon athletica (LULU 345.87, +3.60, +1.1%) beats by $0.16, beats on revs, comparable sales +3% on constant currency basis; guides Q4 EPS in-line, revs in-line; Authorizes $1.0 bln increase in stock repurchase program
• Microsoft (MSFT 438.08, +0.66, +0.2%): OpenAI aiming to end “artificial general intelligence” with MSFT, according to FT
• Rubrik (RBRK 52.42, -0.20, -0.4%) beats by $0.19, beats on revs; guides Q4 EPS in-line, revs above consensus; guides FY25 EPS above consensus, revs above consensus
• Ulta Beauty (ULTA 403.42, +3.61, +0.9%) beats by $0.61, beats on revs; guides FY25 EPS above consensus, revs in-line
• Veeva Systems (VEEV 236.45, -1.29, -0.5%) beats by $0.17, beats on revs; guides Q4 EPS above consensus, revs in-line; guides FY25 EPS above consensus, revs above consensus

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the week on a mixed note. Japan's Nikkei: -0.8%, Hong Kong's Hang Seng: +1.6%, China's Shanghai Composite: +1.1%, India's Sensex: -0.1%, South Korea's Kospi: -0.6%, Australia's ASX All Ordinaries: -0.6%.
  • In economic data:
    • Japan's October Household Spending 2.9% m/m (expected 0.4%; last -1.3%); -1.3% yr/yr (expected -2.6%; last -1.1%). October Wage Income 2.6% yr/yr, as expected (last 2.5%). October Leading Index 108.6 (expected 108.9; last 109.1) and Coincident Indicator 2.5% m/m (last 0.7%)
    • South Korea's October Current Account surplus $9.78 bln (last surplus of $10.94 bln)
  • In news:
    • The U.S. exempted some Chinese chipmakers from export restrictions as a goodwill gesture to Japan.
    • China Securities Times noted that domestic investment is expected to improve next year.
    • Press reports from Japan suggested that the Bank of Japan wants to hike rates by March, though a final decision has not been made yet.
    • There was continued political uncertainty in South Korea, as speculation mounted that martial law could be imposed again ahead of tomorrow's impeachment vote against President Yoon.
    • The Reserve Bank of India left its policy rate at 6.50%, as expected, but it also lowered its cash reserve ratio by 50 basis points to 4.00%, which was not expected.
• Major European indices are seeking a mostly higher finish to the week with France's CAC (+1.3%) showing relative strength after President Macron indicated that a caretaker prime minister will be named in the coming days. STOXX Europe 600: +0.2%, Germany's DAX: +0.3%, U.K.'s FTSE 100: -0.2%, France's CAC 40: +1.3%, Italy's FTSE MIB: +0.6%, Spain's IBEX 35: +0.1%.
  • In economic data:
    • Eurozone's Q3 GDP 0.4% qtr/qtr, as expected (last 0.4%); 0.9% yr/yr, as expected (last 0.6%). Q3 Employment Change 0.2% qtr/qtr, as expected (last 0.2%); 1.0% yr/yr, as expected (last 1.0%)
    • Germany's October Industrial Production -1.0% m/m (expected 1.0%; last -2.0%); -4.8% yr/yr (last -4.2%)
    • U.K.'s November Halifax House Price Index 1.3% m/m (expected 0.3%; last 0.4%); 4.8% yr/yr (expected 3.6%; last 4.0%)
    • France's October trade deficit EUR7.7 bln (expected deficit of EUR8.0 bln; last deficit of EUR8.4 bln). October Current Account deficit EUR2.6 bln (last deficit of EUR2.4 bln)
    • Italy's October Retail Sales -0.5% m/m (expected 0.9%; last 1.3%); 2.6% yr/yr (last 0.7%)
  • In news:
    • Bank of England policymaker Greene expressed concern about sluggish consumer spending. Meanwhile, the Confederation of British Industry lowered its domestic growth forecast for 2024 to 0.9% from 1.0% and trimmed the outlook for 2025 to 1.6% from 1.9%.
    • Volkswagen's unionized metal workers are planning a four-hour strike for Monday.
    • Eurozone's GDP was left unrevised in the final estimate for Q3.