Morning Preview: November 29, 2019

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Early Look

Friday, November 29, 2019

Futures

Up/Down

%

Last

DJ Industrials

-54.00

0.19%

28,094

S&P 500

-7.00

0.22%

3,146

Nasdaq

-22.00

0.26%

8,432

 

 

U.S. stock futures point to a lower open, on track to snap the 4-day win streak for major U.S. averages and slide from record highs as investors and traders return from the Thanksgiving Day holiday to a few developments between China and the U.S. Over the last 24-hours, China reacted angrily to President Donald Trump’s signing of two bills on Hong Kong human rights, calling for the U.S. ambassador to strongly protest and warning the move would undermine cooperation with Washington. Trump’s approval of the bill was not unexpected. Also, over the holiday period, North Korea fired two unidentified projectiles into the sea, South Korea’s military said, three days after the North said its troops conducted artillery drills near its disputed sea boundary with South Korea. However, the WSJ reported China has held off from retaliating against the U.S. after President Donald Trump signed a bill supporting Hong Kong’s anti-Beijing protesters as Chinese officials said that trade negotiations are still on track and as long as the U.S. president doesn’t implement any of the law’s measures. In Asian markets, The Nikkei Index fell -115 points to 23,293, the Shanghai Index fell -17 points to 2,871 and the Hang Seng Index plunged over 2% or -547 points to settle the week at 26,346. In Europe, the German DAX is down about -10 points to 13,230, while the FTSE 100 is down about –20 points to move back under the 7,400 level. Crude oil prices are down slightly as the benchmark’s monthly contract ends today, as attention will turn to Vienna, where OPEC+ will decide on production. U.S. markets will operate on a shortened schedule on Friday. Both the New York Stock Exchange and the Nasdaq will close at 1:00 PM today, though bond markets close at 2:00 PM.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 13.11 points, or 0.42%, to 3,153.63

·     The Dow Jones Industrial Average rose 42.32 points, or 0.15%, to 28,164.00

·     The Nasdaq Composite surged 57.24 points, or 0.66%, to 8,705.17

·     The Russell 2000 Index advanced 9.87 points, or 0.61% to 1,634.10

 

Events Calendar for Today

·     None today – markets closed early at 1:00 PM EST

 

 

Macro

Up/Down

Last

WTI Crude

-0.11

58.00

Brent

-0.46

63.41

Gold

1.90

1,462.70

EUR/USD

-0.0008

1.1001

JPY/USD

0.04

109.55

10-Year Note

-0.005

1.760%

 

 

World News

·     The U.S. House of Representatives Judiciary Committee on Tuesday invited President Donald Trump to its first impeachment hearing, scheduled for Dec. 4, starting a new phase of the inquiry that could lead to formal charges against the president within weeks

·     North Korea fired two short range projectiles into the sea off its east coast on Thursday in what appeared to be the latest try out of its new multiple rocket launchers, South Korea’s military said.

·     Japan’s industrial output slipped at the fastest pace since early last year in October, as factory output fell 4.2% in October from the previous month, below the median market forecast for a 2.1% fall and swinging from a 1.7% rise the previous month

·     The eurozone’s annual rate of inflation rebounded in November after two straight months of decline, but remained well below the European Central Bank’s target. The European Union’s statistics agency said prices were 1% higher than a year earlier, a faster increase than the 0.9% expected by economists. That marked a pickup in the rate of inflation from 0.7% in October.

 

Sector News Breakdown

Consumer

·     A total of $2.1 billion was spent as of 5:00 PM EST on Thursday, which is a 20.2% gain over the same time a year ago, according to the latest holiday shopping figures from Adobe’s online marketing and web analytics group Adobe Analytics. By the end of Thanksgiving Day, shoppers are expected to have spent $4.4 billion. most of the spending is stemming from mobile devices, with 46.4% of sales made on smartphones vs. 33.5% last year.

·     Daimler AG (DDAIF) said that it plans to cut thousands of jobs world-wide over the coming years to save costs amid heavy investments into emissions compliance and future technologies. Daimler agreed on key points with labor representative to reduce the number of jobs

·     Ocado has struck a deal with Japan’s Aeon grocery chain to develop its online business in the UK company’s first partnership in Asia, Financial Times reported

 

Energy, Industrials & Materials

·     A federal bankruptcy court judge rejected Pacific Gas & Electric’s (PCG) latest attempt to change a California law requiring utilities to pay for the devastation from wildfires ignited by their electrical equipment. The decision issued by U.S. Bankruptcy Judge Dennis Montali preserves a long-standing principle known as “inverse condemnation.”

·     Russia’s gas giant Gazprom suffered a 45% year-on-year drop in its net profit in the third quarter of 2019 due to lower gas prices and a drop in sales volumes to Europe

·     OPEC said it sees balances oil market in 2020 at current production level as Bloomberg reported that according to delegates data presented this week to the groups Economic Commission Board suggest that the surplus of supply in the first half of 2020 will mostly be offset by a deficit in the last six months of the year.

·     German energy company E.ON SE reported a fall in nine-month adjusted net income and raised its full-year view following the completion of the acquisition of Innogy; said adjusted net income fell 3% to 1.18 billion euros ($1.29 billion) in the first nine months of the year from EUR1.21 billion a year earlier

 

Financials

·     W.R. Berkley (WRB) will replace Viacom (VIA, VIAB) in the S&P 500, RLI Corp. (RLI) will replace W.R. Berkley in the S&P MidCap 400, and The St. Joe Co. (JOE) will replace RLI in the S&P SmallCap 600 prior to the open of trading on Thursday, December 5. S&P 500 constituent CBS (CBS) is acquiring Viacom in a deal expected to be completed soon pending final conditions.

 

Technology, Media & Telecom

·     Tech Data (TECD) has announced that it has agreed to be bought by Apollo Global (APO) for $145 a share or $5.14B ex-debt, but that deal price was sweetened from Apollo’s prior bid of $130 a share or $4.77B after Berkshire Hathaway (BRK.A) previously made a bid as well, CNBC reported https://cnb.cx/2XYGW8R

·     Panasonic Corp. has agreed to sell its semiconductor unit to Taiwan-based Nuvoton Technology Corp., marking a symbolic departure from the business. The $250 million deal is expected to close by June next year, subject to approvals by authorities, Panasonic said

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Content is provided by Hammerstone Inc., which has no affiliation with Regal Securities, Inc. (“Regal”) This commentary is provided for information purposes only, and is not a recommendation, offer or solicitation by Regal to buy or sell securities or to adopt any investment strategy. Regal has not participated in the creation of the Hammerstone content and does not directly or indirectly endorse the content. Any reliance on this material is at the sole discretion of the reader.

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