After Hours Report

Today's trade was somewhat mixed with investors lacking conviction in front of tomorrow's Thanksgiving closure. The S&P 500 dropped 0.4%, the Nasdaq Composite declined 0.6%, and the Dow Jones Industrial Average logged a 0.3% decline, yet market breadth was positive. 

Advancers led decliners by a 3-to-2 margin at the NYSE and by a 4-to-3 margin at the Nasdaq. Small cap stocks were favored, leading the Russell 2000 to close 0.1% higher, while money rotated away from mega caps, technology stocks, and chipmakers. This rotation has been a consistent theme throughout November, contributing to a 10.5% gain for the small-cap index since October. The market-cap weighted S&P 500 sits on a 5.1% gain this month. 

The outperformance of the small cap index was attributed in part to economic data this morning that was largely favorable for the U.S. growth outlook. Meanwhile, the weakness in technology names followed disappointing earnings reports and/or guidance from companies such as Dell (DELL 124.38, -17.36, -12.3%), Autodesk (ADSK 290.64, -27.32, -8.6%), CrowdStrike (CRWD 347.56, -16.71, -4.6%), and Workday (WDAY 253.40, -16.79, -6.2%). Additionally, some of the weakness in tech stocks reflects profit taking, as many companies in the sector have posted substantial gains since the beginning of the year.

This morning's data featured a PCE price inflation that was a bit sticky in October above the Fed's 2.0% target, but real disposable personal income increased 0.4%, weekly initial jobless claims were encouraging with a low reading of just 213,000, and pending home sales jumped 2.0% in October.

Treasuries settled with gains in response to the data, and in reaction to today's strong $44 billion 7-yr note auction. The 10-yr yield dropped six basis points to 4.24% and the 2-yr yield dropped four basis points to 4.21%.

The aforementioned weakness in technology names led the S&P 500 information technology sector to close 1.2% lower. On the flip side, the drop in rates contributed to the move in the real estate sector, which logged a 0.7% gain.

• Nasdaq Composite: +27.0%
• S&P 500: +25.8%
• S&P Midcap 400: +20.9%
• Russell 2000: +19.7%
• Dow Jones Industrial Average: +18.7%

Reviewing today's economic data:

• Weekly MBA Mortgage Applications Index 6.3%; Prior 1.7%
• October Personal Income 0.6% (Briefing.com consensus 0.3%); Prior 0.3%, October Personal Spending 0.4% (Briefing.com consensus 0.2%); Prior was revised to 0.6% from 0.5%, October PCE Prices 0.2% (Briefing.com consensus 0.2%); Prior 0.2%, October PCE Price - Core 0.3% (Briefing.com consensus 0.3%); Prior 0.3%
  • The key takeaway from the report is the absence of disinflation in the PCE price indexes on a year-over-year basis. That wasn't necessarily a surprise given that the monthly readings were in-line with estimates, yet it will keep the Fed inclined to take a more gradual approach to cutting the target range for the fed funds rate.
• Weekly Initial Claims 213K (Briefing.com consensus 217K); Prior was revised to 215K from 213K, Weekly Continuing Claims 1.907 mln; Prior was revised to 1.898 mln from 1.908 mln
  • The key takeaway from the report is the much the same: employers are reluctant to let employees go, but for employees let go it is becoming more challenging to find a new job.
• October Durable Orders 0.2% (Briefing.com consensus 0.4%); Prior was revised to -0.4% from -0.8%, October Durable Goods - ex transportation 0.1% (Briefing.com consensus 0.3%); Prior 0.4%
  • The key takeaway from the report is that it showed some softness in business spending in October, evidenced by a 0.2% decline in new orders for nondefense capital goods excluding aircraft -- a proxy for business spending.
• October Adv. Intl. Trade in Goods -$99.1 bln; Prior was revised to -$108.7 bln from -$108.2 bln
• October Adv. Retail Inventories 0.1%; Prior was revised to 0.6% from 0.8%
• October Adv. Wholesale Inventories 0.2%; Prior was revised to -0.2% from -0.1%
• Q3 GDP - Second Estimate 2.8% (Briefing.com consensus 2.8%); Prior 2.8%, Q3 GDP Deflator - Second Estimate 1.9% (Briefing.com consensus 1.8%); Prior 1.8%
  • The key takeaway from the report is that there was a modest downward revision to personal consumption expenditures, yet that did not alter the fact that personal spending was quite healthy in the third quarter.
• November Chicago PMI 40.2 (Briefing.com consensus 45.0); Prior 41.6
• October Pending Home Sales 2.0% (Briefing.com consensus -1.5%); Prior was revised to 7.5% from 7.4%

Overseas:

• Europe: DAX -0.2%, FTSE +0.2%, CAC -0.7%
• Asia: Nikkei -0.8%, Hang Seng +2.3% Shanghai +1.5%

Commodities:

• Crude Oil -0.10 @ 68.78
• Nat Gas -0.25 @ 3.21
• Gold +18.50 @ 2639.90
• Silver -0.25 @ 30.13
• Copper +0.03 @ 4.15

After-Hours Spotlight:

• Applied Therapeutics (APLT): FDA says its unable to approve the NDA for govorestat in its current form... APLT -71.5%
• Four Corners Property Trust (FCPT) announces acquisition of five Outback Steakhouse properties for $19.7 million from a repeat seller... FCPT flat
• Mach Natural Resources (MNR) files for $300 mln mixed securities shelf offering... MNR +0.5%
• Microsoft (MSFT) facing broad FTC investigation, according to Bloomberg... MSFT -0.3%
• Qiagen (QGEN) announces launch of two new tools for designing and ordering custom solutions to support microbial analysis of bacterial, fungal and viral targets... QGEN -5.2%
• Velocity Financial (VEL) files for $100 mln common stock offering... VEL -0.7%

For a full rundown of today's market and after hours developments, see Live In Play

• Earnings/Guidance (Full Earnings Calendar):
  • Arrowhead (ARWR) misses by $4.03, misses on revs
  • Autodesk (ADSK) beats by $0.05, reports revs in-line; guides Q4 EPS in-line, revs above consensus
  • CrowdStrike (CRWD) beats by $0.12, beats on revs; guides Q4 EPS in-line, revs in-line
  • Dell (DELL) beats by $0.09, misses on revs; projects Q4 earnings and revs below consensus; provides FY26 commentary
  • Frontline (FRO) misses by $0.04
  • Guess? (GES) misses by $0.03, misses on revs; guides Q4 EPS below consensus, revs below consensus
  • HP Inc. (HPQ) reports EPS in-line, revs in-line; guides JanQ EPS below consensus; guides FY25 EPS in-line; increases dividend by 5%
  • JOYY (YY) beats on top and bottom lines; sees Q4 revs below consensus
  • Nordstrom (JWN) beats by $0.11, reports revs in-line; guides FY25 EPS in-line
  • Nutanix (NTNX) beats by $0.10, beats on revs; guides Q2 revs above consensus; reaffirms FY25 revs guidance
  • PagerDuty (PD) beats by $0.08, beats on revs; guides Q4 EPS in-line, revs below consensus
  • Symbotic (SYM) to delay Form 10-K Filing for FY24 as company identified certain material weaknesses in internal control over financial reporting; Also issues downside Q1 revenue guidance
  • Urban Outfitters (URBN) beats by $0.24, beats on revs, comparable Retail sales up +1.5%; expects holiday comps to resemble Q3
  • Volkswagen AG (VWAGY) updates its forecast for the 2024 financial year; now expects deliveries to customers to be around 9 million vehicles (2023: 9.24 million vehicles; previous forecast: increase of up to 3 percent)
  • Workday (WDAY) beats by $0.13, beats on revs
• General News
  • China warned President-elect Trump against starting trade war, according to Reuters
  • White House National Security Advisor Jake Sullivan in interview on MSNBC says that President Biden will begin work on Gaza ceasefire today
  • President-elect Trump will roll back President Biden's student loan relief program, according to Politico
  • IDC says worldwide smartphone market forecast to grow 6.2% in 2024, fueled by robust growth for android in emerging markets and China
  • UK will talk with manufacturers regarding changes to electric vehicle mandate as EV sales do not meet expectations, according to Bloomberg
  • Australia getting closer to banning social media for children under 16, according to Reuters
  • President-elect Trump nominates Dr. Jay Bhattacharya for Director of NIH
  • President-elect Trump confirms he will hire Kevin Hassett to lead the National Economic Council
  • CFPB aiming to put in new rules on medical debt and data brokers before President-elect Trump takes office, according to Reuters
  • JPMorgan flips bullish on US Stocks, eyes S&P 500 at 6,500 by 2025 amid AI boom and rate cuts, according to Bloomberg
  • ACADIA Pharmaceuticals (ACAD) enters into an exclusive worldwide license agreement with Saniona for the development and commercialization of SAN711
  • Akamai Tech (AKAM) announces that the U.S. Bankruptcy Court for the District of Delaware has approved its bid to acquire select assets from Edgio, including certain customer contracts from Edgio's businesses in content delivery and security, and non-exclusive license rights to patents in Edgio's portfolio
  • Autodesk (ADSK) appoints Janesh Moorjani as its CFO, effective December 16; replaces Elizabeth Rafael who had been serving as interim CFO since May 31
  • BeiGene (BGNE) receives EC approval for TEVIMBRA
  • Boeing (BA): FAA will not investigate Boeing 737 Max engine following bird strikes, according to Reuters
  • BrightSpring Health Services (BTSG) Announces Onco360® Has Been Selected as a Partner for Several New Drugs
  • B. Riley Financial (RILY) expects to return to a normal filing cadence in 2025
  • Camtek (CAMT) received over $50 million in initial orders from several customers for its new Hawk product, with additional orders in the pipeline
  • Compugen (CGEN) Expands its IP portfolio with new patent covering triple combination use of COM902 with anti-PD-1 and anti-PVRIG Antibodies
  • Evolv (EVLV) Announces Resolution of FTC Inquiry
  • Exelixis (EXEL) provides regulatory update related to supplemental new drug application for Cabozantinib (CABOMETYX) for the treatment of patients with previously treated advanced neuroendocrine tumors
  • Exxon Mobil (XOM): FBI probes Exxon consultant over alleged role in hack-and-leak operation targeting environmental critics, according to Reuters
  • Jack In The Box (JACK) COO to depart from role
  • FOX News Channel (FOX) Commands Largest Cable News Share in Its History as MSNBC and CNN Ratings Collapse Continues
  • General Dynamics (GD) and American Ordnance LLC to compete for each order of a $499 mln U.S. Army contract for mortar propelling charges
  • GlaxoSmithKline (GSK) receives EC approval of fully liquid Menveo
  • Global Payments (GPN) explores sale of payroll and Active Network units amid strategic shift, according to Bloomberg
  • Google (GOOG, GOOGL) aiming to make changes to EU search results, according to Reuters
  • Grifols, S.A. (GRFS) confirms that Brookfield Capital Partners Ltd. is not in a position to proceed with a potential offer for Grifols
  • Hesai (HSAI) aiming to lower lidar prices next year by 50%, according to Reuters
  • Lockheed Martin (LMT): President Biden aiming to approve $680 mln weapons sale to Israel, according to FT
  • MAXIMUS (MMS) announces that the U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services notify Maximus of Cancellation of the Contact Center Operations Contract Re-Procurement
  • Middlesex Water (MSEX) names Gregory Sorensen as its COO, effective December 16
  • Nokia (NOK) awarded more than 3,000 sites supporting Deutsche Telekom’s (DTEGY) Open RAN network ambitions
  • Novartis' (NVS) Kisqali receives EC approval in a broad population of patients with HR+/HER2- early breast cancer at high risk of recurrence
  • Novo Nordisk A/S (NVO): Health Canada approves Wegovy to reduce the risk of non-fatal myocardial infarction
  • OrthoPediatrics (KIDS) announces updates to the DF2 Brace, a cornerstone product within the OrthoPediatrics Specialty Bracing business
  • Outlook Therapeutics (OTLK) announces preliminary topline results of NORSE EIGHT clinical trial
  • PTC Therapeutics (PTCT) announces that the global Phase 2 placebo-controlled CardinALS study did not meet its primary endpoint of slowing disease progression on the composite ALSFRS-R and mortality analysis
  • PTC Therapeutics (PTCT) Enters into Agreement to Sell Priority Review Voucher for $150 Million
  • Rolls Royce PLC (RYCEY) awarded $695 mln U.S. Navy contract
  • RTX (RTX) awarded $591 mln U.S. Navy contract
  • Samsung (SSNLF) announces new leadership
  • SK Hynix (HXSCL) raises dividend by 25%; issues new shareholder return program
  • SolarEdge Technologies (SEDG) discloses the discontinuation of its energy storage division
  • StoneCo (STNE) received several offers for Linx unit, but they are below the company's expectations, according to Reuters
  • Super Micro Computer (SMCI) prepaid in full and terminated obligations under loan agreements with Bank of America
  • Tango Therapeutics (TNGX) receives FDA orphan designation for treatment of pancreatic cancer
  • Uber (UBER) being investigated by FTC over subscription fees, according to Bloomberg
  • Volkswagen AG (VWAGY) and SAIC strengthen long-standing partnership with new joint venture agreement
  • WW (WW) announces appointment of Felicia DellaFortuna as Chief Financial Officer, effective January 1, 2025
  • YXT.com (YXT) announces that Teng Zu has resigned from his position as the CEO due to personal reasons, effective today; he will remain with the Company as a director and the vice chairman of the Board

Ratings Changes (see Upgrades/Downgrades calendar for full list):

• Upgrades:
  • Coca-Cola Hellenic (CCHGY) upgraded to Overweight from Neutral at JP Morgan
  • Dick's Sporting Goods (DKS) upgraded to Buy from Neutral at UBS; tgt raised to $260
  • Embecta Corp. (EMBC) upgraded to Buy from Neutral at BTIG Research; tgt $26
  • Henkel AG (HENKY) upgraded to Overweight from Neutral at JP Morgan
  • Martin Marietta (MLM) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $640
  • Nestle (NSRGY) upgraded to Equal-Weight from Underweight at Morgan Stanley
  • Urban Outfitters (URBN) upgraded to Buy from Neutral at Citigroup; tgt raised to $59
  • Volvo (VLVLY) upgraded to Overweight from Neutral at JP Morgan
• Downgrades:
  • Alexandria RE (ARE) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $121
  • Coca-Cola European Partners (CCEP) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $82
  • CrowdStrike (CRWD) downgraded to Hold from Buy at HSBC Securities; tgt $347
  • Eli Lilly (LLY) downgraded to Hold from Buy at Erste Group
  • Kohl's (KSS) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $18
  • PennantPark Investment (PNNT) downgraded to Neutral from Buy at Ladenburg Thalmann
  • Workday (WDAY) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $270
• Others:
  • Bank of Hawaii (BOH) initiated with an Overweight at Stephens; tgt $90
  • Barclays PLC (BCS) initiated with a Buy at Erste Group
  • Booking Holdings (BKNG) initiated with an Outperform at Robert W. Baird; tgt $5850
  • Compass Diversified (CODI) initiated with a Buy at TD Cowen; tgt $34
  • Dynatrace (DT) initiated with a Neutral at UBS; tgt $58
  • enGene Holdings (ENGN) initiated with an Outperform at Raymond James; tgt $23
  • Expedia Group (EXPE) initiated with an Outperform at Robert W. Baird; tgt $225
  • First Hawaiian (FHB) initiated with an Equal-Weight at Stephens; tgt $30
  • GRAIL (GRAL) initiated with an Equal-Weight at Morgan Stanley; tgt $16
  • Plumas Bancorp (PLBC) initiated with an Overweight at Stephens; tgt $60

• Econ Data (Friday):
  • The market will be closed Thursday for Thanksgiving Day
  • There is no U.S. economic data of note on Friday
• Earnings:
  • Monday (Nov 25)
    • Pre-Market: BBWI DSX
    • After-Hours: A CENT ENTA FLNC LESL NJR SMTC WWD ZM
  • Tuesday (Nov 26)
    • Pre-Market: ANF AMWD ADI BBY BURL DKS EMBC SJM KSS M TITN
    • After-Hours: AMBA ARWR ADSK CRWD DELL GES HPQ NTXN URBN WDAY
  • Wednesday (Nov 27)
    • Pre-Market: FRO
    • After-Hours: None
  • Thursday (Nov 28)
    • Pre-Market: None
    • After-Hours: None
  • Friday (Nov 29)
    • Pre-Market:
    • After-Hours: None
General Motors: 5,000 members at GM's Arlington, TX assembly plant join UAW strike