Closing Recap

Friday, December 13, 2024

U.S. stocks rebounded overnight thanks to a solid report and strong commentary from Broadcom after the close yesterday. Nasdaq futures were leading the way higher as MRVL, NVDA and AMD also gained pre-market. There were no market-moving economic releases this morning and no Fed speakers on the calendar, so we could easily see stocks trend sideways for the remainder of the day on a holiday-season Friday. We didn’t, but we could have. Instead, we saw early volatility with breadth favoring decliners by almost 2:1 as small caps underperformed with IWM (-0.43%) versus SPY (+0.20%) and QQQ (+0.97%). Technology (+0.90%), Consumer Discretionary (+0.09%) and Utilities (+0.01%) were early outperformers among S&P sector ETFs, while Energy (-0.52%), Communications (-0.78%) and Materials (-1.01%) paced the underperformers with only three sectors gaining versus eight declining despite broader indices in the green. Sentiment-wise, today’s Fear and Greed Index was 53/100, Neutral, versus 52 (Neutral) a week ago, 65 (Greed) a month ago and 67 (Greed) last year.

In data of interest today, in honor of Friday the 13^th, @bespokeinvest notes Friday the 13th has been positive for the markets 61.9% of the time (excluding one early COVID date) so there is always hope on what is otherwise expected to be an unlucky day. On breadth, @bespokeinvest notes today’s early negative breadth in the S&P 500 would be the weakest of the ten-day streak and weakest day since October. On jobs, @KobeissiLetter highlights new job postings on Indeed dropped 38% yr/yr last week and are at the lowest since August 2020. Postings have now dropped for almost three years straight (almost 50% below the early 2022 peak. Lastly, on growth and inflation, @RBAdvisors states that fighting automation and increased productivity is by definition inflationary and that investors should take the “over” on nominal growth.

Heading into the final hour of trading, stocks were mixed and off midday lows but also remained well off early highs. Breadth was holding at almost 5:2 in favor of decliners as small caps continued to underperform in a narrow market. Technology (XLK, +0.33%), Consumer Discretionary (XLY, +0.32%) and Health Care (XLV, +0.29%) were outperformers among S&P sector ETFs, while Real Estate (XLRE, -0.55%), Materials (XLB, -0.91%) and Communications (XLC, -1.15%) led the underperformers with four sectors gaining versus seven declining, just slightly better than the morning read. On a growth versus value basis, growth was the outperformer as the Russell 1000 Growth gained +0.17% (thank you chip stocks) versus its Value counterpart in the red at -0.33%. Next week we hear from the Fed, so expect that to steer the markets through year end.

• US Export prices mo/mo for November flat versus estimate of -0.3% and prior +0.8%.

• WTI crude futures for January gained overnight and continued to climb through the session to settle higher by $1.27/bbl, or +1.81%, to $71.29 and mark the largest weekly gain in three weeks. Traders attributed the move to a combination of supply and demand factors. On the supply side, the market sees concern over stronger EU potential sanctions against Russia. Demand-wise, incremental stimulus measures and rising imports in China lifted expectations. That said, many in the market continue to forecast a supply glut ahead, so stay tuned.

• POAHY Porsche expects impairment of Porsche AG investment up to EUR 2B and impairment of Volkswagen investment up to EUR 20B; withdraws earnings forecast due to expected impairment.

• UBER was named a top pick for 2025 by Goldman Sachs.
• PLAY Shares moved upward after interim CEO Kevin Sheehan reported buying ~$1M worth of stock.
• AMZN Amazon Teamsters at two New York City facilities (JFK8 and DBK4) have voted overwhelmingly to authorize strikes following Amazon’s "illegal refusal to recognize their union and negotiate a contract addressing the company’s low wages and dangerous working conditions." Demands Amazon negotiate by December 15.
• POST per Reuters, Post is working with bankers to explore a possible transaction with Lamb Weston; no comments from the companies.

• NNE Nano Nuclear Energy and Digihost Technology Inc. announce collaboration to establish microreactor technology at its 60mw power plant in upstate New York.
• XOM The House Judiciary Committee released an interim report titled, "Sustainability Shakedown: How a Climate Cartel of Money Managers Colluded to Take Over the Board of America’s Largest Energy Company." The interim report reveals how a cartel of the world’s largest financial institutions and climate activists colluded through climate alliances and initiatives to replace the ExxonMobil Corporation’s board members after they refused to make a series of climate pledges.
• HAL Diamondback, Halliburton, Voltagrid sign simul-frac fleets pact, will deploy fleets in Permian Basin.

• SCHW Shares fell after the retail broker reported monthly metrics including total client assets $10.31 trillion, up 26% YoY at Nov-end and now forecasting yr net rev. Growth 3.0%-3.5%, forecast 2.0%- 3.0%.
• IEP Investor Bill Ackman tweets that he has shorted the stock of Carl Icahn’s Icahn Enterprises.
• IBTX Fed approves Southstate’s merger with Independent Bank Group.

• PGR saw its shares rise after reporting November Net premiums written $5.56B. Morgan Stanley says the amount is a reason to be bullish on the insurer.

• NVO A study from Massachusetts Eye and Ear found that patients using Ozempic or Wegovy for weight loss or diabetes had a higher risk of developing NAION, a condition causing vision loss. The risk was significantly higher for both diabetic and obese patients on semaglutide, though the number of cases was small, with 37 instances observed.
• AMGN Amgen’s blincyto gets EU regulator nod for indication extension.
• TELO Shares were lower after a short report in the pre-market by White Diamond Research: “Telomir Pharmaceuticals is a biotech pump and dump scheme remaining in the preclinical stage.”
• CADL saw its shares fall precipitously after the company took advantage of a recent share gain to issue 10 million shares in a spot secondary at $6.00.
• LLY Lilly’s omvoh® (mirikizumab) recommended by CHMP for approval in the European union for adults with moderately to severely active Crohn’s disease; expects U.S. decision on omvoh for Crohn’s disease in H1 2025.
• ESPR Shares fell after announcing $210M convertible debt financing.
• ABBV AbbVie to acquire nimble therapeutics for $200M; to further strengthening immunology pipeline.
• WBA Boots bidder Sycamore lines up banks to finance $10B takeover deal per Sky News; has approached lenders including BOFA, JP Morgan.

• UNH UnitedHealth inked a $69M deal to end 401(k) fund lawsuit.

• RYCEY Rolls Royce -holds successful f130 engine critical design review for the U.S. Air Force B-52J; engine testing program on track to begin altitude testing in Feb 2025 at Tennessee.

• META Key House lawmakers warn Apple, Google they must be ready to remove TikTok from app stores on January 19 – Letters.

• TSM TSMC’s JASM forecasts first Kumamoto plant in Japan is close to mass production.
• GOOGL US empowers Google, Microsoft as AI gatekeepers globally, new rules aim to prevent Chinese access to AI chips, exemptions for 19 allied countries, nuclear embargoed nations remain blocked per Reuters