S&P futures are down 0.8% Friday morning following Thursday’s mostly lower finish. The Dow managed a small gain, breaking a 10-day losing streak, while semis and homebuilders underperformed. Big tech was mostly higher. Treasuries firmed with a bull steepening curve, though rates remain higher for the week. The dollar is down 0.2%, gold up 0.3%, Bitcoin futures down 3.2%, and WTI crude off 1.2%.
Risk-off sentiment persists amid concerns about a government shutdown, Trump tariff threats, stretched valuations, and geopolitical uncertainty. Mixed reactions to earnings from NKE-US and FDX-US added to market caution. Personal spending and income data, including November PCE inflation, headlines today’s economic calendar, with consumer confidence out next week before the Christmas market closure.
- NVO-US: Announced CagriSema weight loss drug study results below expectations; LLY-US higher on update.
- NKE-US: Down after better-than-expected Q2 results overshadowed by weak Q3 guidance and strategic turnaround concerns.
- FDX-US: Higher following a slight Q2 beat and confirmation of plans to spin off FedEx Freight despite a FY25 guidance reduction.
- X-US: Lower after negative Q4 preannouncement, citing pricing challenges and Big River 2 costs.
- CCI-US: Reportedly in talks to sell its fiber business for $8B.
US equities mostly declined Thursday, unable to sustain a morning bounce following Wednesday’s sharp selloff. The S&P suffered its second-biggest decline of 2024, while the Dow edged out a small gain, snapping a 10-day losing streak. Big tech showed mixed performance, with TSLA-US unable to recover. Outperformers included utilities, airlines, credit cards, and software, while homebuilders, refiners, biotech, and managed care lagged. Treasuries were mixed with steepening as the 10-year yield stayed above 4.5%. The dollar index rose 0.3%, with yen weakness dominating FX. Gold dropped 1.7%, marking its lowest close since mid-November, Bitcoin fell 3.9%, and WTI crude declined 1%.
The market remains pressured by hawkish Fed guidance, government shutdown risks, stretched valuations, and geopolitical uncertainties. Weekly jobless claims came in at 220K, below expectations, while final Q3 GDP was revised higher to 3.1%. The December Philadelphia Fed manufacturing index printed at -16.4, well below consensus. Existing home sales slightly beat expectations, while central banks globally delivered mixed signals. The BoE and BoJ held rates steady, while Sweden’s Riksbank took a hawkish stance with a 25 bp rate cut.
Information Technology
- MU-US (Micron Technology): -16.2% – February quarter guidance missed significantly due to inventory digestion, NAND oversupply, and data center SSD demand slowdown. Positive outlook for HBM; TAM raised to $30B.
- HPE-US (Hewlett Packard Enterprise): +1.5% – Upgraded to buy at Deutsche Bank, citing valuation and core segment growth drivers.
- OKLO-US (Oklo, Inc.): +14% – Initiated at outperform by Wedbush on growing AI demand.
Consumer Discretionary
- DRI-US (Darden Restaurants): +14.7% – Beat FQ2 estimates with strong Olive Garden performance; raised FY25 guidance and increased restaurant openings outlook.
- LEN-US (Lennar): -5.2% – Missed Q4 estimates; management flagged higher rates and announced the spinoff of Millrose Properties.
Consumer Staples
- CAG-US (Conagra Brands): -2.1% – Beat FQ2 estimates but cut FY25 EPS guidance due to inflation and FX headwinds.
Health Care
- VRTX-US (Vertex Pharmaceuticals): -11.4% – Disappointing Phase 2 trial results for suzetrigine in painful radiculopathy.
- HIMS-US (Hims & Hers Health): -7.7% – Declined after FDA resolved tirzepatide injection shortage.
Industrials
- MLKN-US (MillerKnoll): -5.5% – Beat earnings, but slower-than-expected order trends and weak FY guidance weighed on shares.
- KBR-US (KBR): +3.9% – Irenic Capital reportedly pushing for a spinoff of the private sector business; company announced new COO appointment.
Financials
- SHCO-US (Soho House): +47.1% – Received acquisition offer at $9/share, representing an 83% premium.
Energy
- LW-US (Lamb Weston): -20.1% – Missed Q2 earnings and cut FY guidance; noted higher manufacturing costs and weaker volumes.
Communication Services
- TRIP-US (TripAdvisor): +7.3% – Announced a merger with LTRPA-US, valued at ~$435M.
Eco Data Releases | Friday December 20th, 2024
S&P 500 Constituent Earnings Announcements | Friday December 20th, 2024
Data sourced from FactSet Research Systems Inc.
