Zinger Key Points
- Probability of a further 25 basis point rate cut in December rose to 98.6%.
- Market breadth has been skewed in the favor of bears over the last seven days.
- Discover Fast-Growing Stocks Every Month
U.S. stock futures declined on Thursday in premarket hours after hitting fresh highs on Wednesday. The futures of all the four major indices were trading lower.
November inflation data was in line with analyst expectations, shooting up the probability of a further 25 basis point rate cut in December rose to 98.6% versus 58.75% probability a month ago, according to CME Group’s FedWatch tool. Federal Reserve officials are currently in a quiet period ahead of their December meeting.
Traders now await the producer price index data, which will be released later today. The 10-year and two-year Treasury notes yielded 4.30% and 4.18%, respectively
| Futures | Change (+/-) |
| Nasdaq 100 | -0.24% |
| S&P 500 | -0.16% |
| Dow Jones | -0.19% |
| Russell 2000 | -0.18% |
In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust SPY was down 0.12% to $606.71 and the Invesco QQQ Trust ETF QQQ declined 0.20% to $528.87, according to Benzinga Pro data.
Cues From The Last Session
The Consumer Price Index (CPI) for November climbed 2.7% year-over-year, aligning with expectations. 1 Core inflation, excluding volatile food and energy costs, held steady at 3.3%.
The Magnificent Seven's combined market cap hits $18.2 trillion, with five giants reaching all-time highs on Wednesday. The Roundhill Magnificent Seven ETF MAGS, a closely watched benchmark for the group’s market performance, surged 3.03% on Wednesday, setting a new all-time high.
The Roundhill Magnificent Seven ETF MAGS surged 3.03%, its best performance since early November.
The broader market also participated in the rally. The S&P 500 climbed 0.82%, nearing its all-time high. Small-cap stocks added 0.48%, while the Dow Jones Industrial Average ended 0.22% lower.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | 1.77% | 20,034.90 |
| S&P 500 | 0.82% | 6,084.19 |
| Dow Jones | -0.22% | 44,148.56 |
| Russell 2000 | 0.48% | 2,394.16 |
Insights From Analysts
Despite the S&P 500 Index nearing record highs on Wednesday, its breadth was skewed in the favour of the bears.
“117 stocks in the S&P 500 made a new monthly low yesterday, the most since 139 on Halloween. 211 made a 10-day low, most since Sept 6,” said Ryan Detrick, the chief market strategist at Carson Group.
The breadth has been skewed for the last seven days. “Since 2010, only happened two other times. Aug ’11 and Dec ’18. Small sample size yes, but not the worst times for bulls going forward,” added Detrick.
Talking about balancing growth amid policy shifts, Andrew Pease, the chief investment strategist at Russell Investments said, “Tax cuts and deregulation could provide a meaningful growth boost, particularly to domestic and cyclical sectors.”
“Given lower valuations and improving sentiment, we are more positive on U.S. small-cap equity than we have been in prior years. Large-cap dominance in both earnings and price appreciation will require a catalyst to shift returns in the small-cap direction,” he added.
Apart from small-caps, Pease in his note said that “growth managers targeting high-growth cyclical sectors like software, while value managers identify mergers and acquisitions potential in financials and healthcare. Core managers are balancing cyclical exposure and managing risks in rate-sensitive sectors.”
Citing rich valuations, Alex Chaloff, the chief investment officer at Bernstein Private Wealth Management said that they are still pro-equities.
“We’re optimistic on equities, think that valuations are a little bit rich in a pocket of the market, but there are some opportunities. In bonds, you can clip the coupon even if rates move higher from here, which we don’t think is our base case,” he said.
Upcoming Economic Data
This week’s remaining economic calendar with essential data releases that will help investors shape their future plans and strategies.
- On Thursday, initial jobless claims data till Dec. 7 and the core and headline producer price index for November will be released at 8:30 a.m. ET.
- On Friday, the import price index data will be released at 8:30 a.m. ET.
Stocks In Focus:
- Macy's, Inc. M was down 1.03% as its net sales decreased 2.4%. Sales growth at Macy's First 50 locations, Bloomingdale's, and Bluemercury was offset primarily by weakness in Macy's non-First 50 locations, digital channels, and cold weather categories.
- Nordson Corp NDSN fell by 5.43% as the company revenue guidance for the fiscal year 2025 was below analyst expectations.
- Adobe Inc ADBE declined by 9.99% after its earnings beat estimates but the revenue guidance for the first quarter missed the mark.
- Ciena Corporation CIEN was up 1.08% in the premarket as it is slated to report quarterly earnings before the bell. Wall Street expects it to report quarterly earnings of 66 cents per share on revenue of $1.10 billion.
- DBV Technologies SA – ADR DBVT rose by 32.83% after the company announced alignment with the FDA on an accelerated approval pathway for the Viaskin peanut patch in toddlers one to three years old.
- Amplitech Group Inc AMPG gained 39.90% after the company priced its $2.2 million registered direct offering of 1.35 million shares at $1.60 per share.
- Nuburu Inc BURU was up 22.62% after the company addressed NYSE compliance violations over 4.6 million share issuance.
- Trump Media & Technology Group Corp. DJT is in focus as President-elect Donald Trump is set to ring the New York Stock Exchange opening bell Thursday.
Commodities, Bonds And Global Equity Markets:
Crude oil futures were largely unchanged in the early New York session and rose 0.03% to hover around $70.31 per barrel.
The gold spot index fell by 0.37% to $2,746.59 per ounce. The Dollar Index was down 0.12% to 106.581 level.
Asian markets were mixed on Thursday as Australia’s ASX 200 and India’s S&P BSE Sensex declined. While, Hong Kong’s Hang Seng, China’s CSI 300, Japan’s Nikkei 225, and South Korea’s Kospi Index advanced. Most European markets advanced.
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