It is shaping up to be a fairly quiet start to the trading session after the market made some welcome noise Friday in the wake of the solid November employment report. That noise was synthesized into a sixth straight winning week for the S&P 500 and Nasdaq Composite.
Currently, the S&P 500 futures are down two points and are trading roughly in-line with fair value, the Nasdaq 100 futures are down 12 points and are trading roughly in-line with fair value, and the Dow Jones Industrial Average futures are down 10 points and are trading fractionally above fair value.
The quiet disposition comes in front of a big week of news that will feature the November Consumer Price Index on Tuesday, the FOMC meeting, updated Summary of Economic Projections, and press conference on Wednesday, the November Retail Sales Report on Thursday, and a gaggle of policy meetings from other central banks, including the ECB, Bank of England, Swiss National Bank, Hong Kong Monetary Authority, and Norges Bank, interspersed throughout the week.
Today won’t feature any U.S. economic data of note, but a smattering of corporate news items has drawn some extra attention:
- Occidental Petroleum (OXY) is acquiring CrownRock in a $12 billion cash-and-stock deal.
- Macy’s (M) received a $5.8 billion, or $21.00 per share, buyout offer from Arkhouse Management and Brigade Capital Management, according to The Wall Street Journal.
- The Cigna Group (CI) announced a $10 billion increase to its share buyback authorization, reaffirmed its FY23 outlook, and, according to The Wall Street Journal, ended talks to acquire Humana (HUM).
- Boeing (BA) named Stephanie Pope to be COO, effective January 1, 2024.
- Citigroup upgraded Nike (NKE) to Buy from Neutral.
- TD Cowen named NVIDIA (NVDA) its Best Idea for 2024.
The S&P 500 itself is drawing some attention for closing above 4,600 on Friday, something it hasn’t done since March 2022. It now stands roughly 500 points, or 12.2%, above its low on October 27.
Accordingly, it continues to battle the notion, along with the other indices, that it is due for a pullback. That notion, however, continues to clash with the good bones of momentum and seasonality that have yet to show any signs of real fracture.
The technical translation for many in that understanding is that the trend is their friend… until it isn’t.
With the some key market-moving events on the near horizon, market participants will be forgiven for taking a non-committal line at this juncture. Still, no one is jumping the line to force a downside break, so the price action itself continues to keep sellers at bay.
Separately, the 2-yr note yield is up two basis points to 4.76% and the 10-yr note yield is up two basis points to 4.27% in front of a $50 billion 3-yr note auction at 11:30 a.m. ET and a $37 billion 10-yr note auction at 1:00 p.m. ET.
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Originally Posted December 11, 2023 – Walking a quiet line
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