S&P futures down 0.1% Monday morning after mixed performance last week, with tech strength driving the S&P 500 and Nasdaq. S&P is up nearly 28% YTD. Asian markets were mixed; Hong Kong rose on China policy support while South Korea fell amid political turmoil. European markets were also mixed. Treasuries slightly weaker, dollar index down 0.2%, gold up 0.7%, Bitcoin futures down 2.5%, and WTI crude up 1.2%.
Markets await Wednesday’s CPI for guidance on the December FOMC decision. November CPI is expected to rise 0.3% m/m, with y/y headline inflation increasing to 2.7% and core inflation holding at 3.3%. Friday’s mixed employment data raised the probability of a 25 bp Fed rate cut to 85%. Additional focus on China’s dovish monetary policy signals and South Korea’s escalating political crisis. Weekend developments included the Assad regime’s collapse in Syria, with limited market impact despite implications for Russia and Iran.
Corporate updates:
- IPG-US up on reports of $13-14B acquisition talks with OMC-US.
- M-US up after Barington Capital took a stake, pushing for changes.
- AJG-US confirmed a $12.45B acquisition of AssuredPartners.
- SMCI-US higher after receiving a Nasdaq filing extension.
- APO-US and WDAY-US up on inclusion in the S&P 500, replacing QRVO-US and AMTM-US.
- FIVN-US reportedly nearing a settlement with activist investors.
- ACHC-US under scrutiny for its methadone clinics.
US equities ended mostly higher on Friday, driven by strength in technology and consumer sectors. Major indices logged mixed performances for the week, with tech continuing to lead gains. The S&P and Nasdaq both hit record highs during the week, while equal-weighted S&P lagged the cap-weighted index by over 200 basis points. Outperformers included retail, apparel, software, semicap equipment, biotech, and med-tech, while underperformers included energy, industrial and precious metals, utilities, airlines, and managed care. Treasuries firmed with curve steepening, while the dollar index rose 0.3%. Gold gained 0.4%, Bitcoin futures rose ~2.5%, and WTI crude declined 1.6%.
The November nonfarm payrolls report came in stronger than expected at 227K, while October and September figures were revised higher. However, an uptick in the unemployment rate to 4.2% supported expectations for a December rate cut, with market probability at ~85%. Consumer sentiment data from Michigan showed robust current conditions but weakening future expectations, with inflation expectations rising. Other macro drivers included upbeat holiday shopping commentary, renewed focus on China stimulus, and stretched equity valuations. Concerns about uncertainty surrounding Trump administration policies and geopolitical developments like Syria also remained in focus.
GICS Sector News
Consumer Discretionary
- LULU-US (Lululemon Athletica): +15.9%
Q3 results beat expectations, and the company raised FY24 guidance. International sales and gross margins were standout factors. Analysts noted US market stabilization, growth in Women’s apparel, and a solid holiday season start. - ULTA-US (Ulta Beauty): +9%
Q3 earnings, revenue, and margins beat estimates. Comparable sales exceeded forecasts, driven by strong performance in fragrance and skincare. The company raised FY guidance and noted positive holiday momentum. - VSCO-US (Victoria’s Secret): +11.6%
Beat on Q3 results and raised FY24 guidance, citing strength across channels and categories. Analysts highlighted cost control, share gains, and positive holiday season commentary. - WOOF-US (Petco): +8%
Q3 results were ahead of expectations, with strength in consumables and services. However, Q4 guidance fell slightly short of Street estimates.
Technology
- DOCU-US (DocuSign): +27.9%
Q3 earnings and FCF beat expectations, driven by better retention and early renewals. Billings exceeded consensus, and the company raised FY guidance while highlighting IAM momentum. - ASAN-US (Asana): +43.6%
Q3 results beat estimates, with strong performance in AI Studio and multiyear deals. The company raised FY guidance, leading to analyst upgrades. - GWRE-US (Guidewire Software): -14%
Fiscal Q1 results beat expectations, and FY25 revenue guidance was raised. However, elevated expectations (YTD stock +90%) and the maintenance of FY25 ARR guidance weighed on sentiment. - IOT-US (Samsara): -5.2%
Q3 results beat expectations, and FY25 guidance was raised. Concerns included elevated valuation, slowing ARR growth, and lack of a Q4 revenue raise.
Healthcare
- VEEV-US (Veeva Systems): +8.1%
Q3 results exceeded forecasts, with positive takeaways on Vault CRM, margin expansion, and customer engagement. - COO-US (The Cooper Cos.): -4.4%
Fiscal Q4 revenue and organic growth were light, and FY25 guidance came in below estimates. Commentary flagged FX pressure and mixed Q4 results.
Industrials
- RBRK-US (Rubrik): +20.3% Strong Q3 ARR and margins drove outperformance, with momentum in data security, large-deal activity, and vendor consolidation.
- OSK-US (Oshkosh): -4.6% Reports suggested Trump’s transition team may cancel USPS EV supply contracts with Oshkosh and Ford, causing pressure on the stock.
Consumer Staples
- SWBI-US (Smith & Wesson): -20.3%
Missed FQ2 expectations on all key metrics. Management cited softening demand trends and inflation’s impact on consumer spending, cutting guidance for 2H25.
Eco Data Releases | Monday December 9th, 2024
S&P 500 Constituent Earnings Announcements | Monday December 9th, 2024
Data sourced from FactSet Research Systems Inc.
