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The week got started on a lackluster note. The major indices succumbed to some profit-taking interest that led to modest losses across the board.
Buying interest was constrained throughout the session, partly because of a lack of leadership and partly because of a wait-and-see mindset in front of key events this week, one of which was Oracle's (ORCL) earnings report after yesterday's close.
That report didn't go so well -- at least not relative to expectations. Oracle came up a penny shy of the FactSet consensus EPS estimate for its fiscal second quarter and issued fiscal third quarter guidance that fell short of expectations due in part to the significant strengthening of the U.S. dollar.
The latter acknowledgment could be an early warning sign for other multinational companies, yet the fallout today has hit harder for Oracle (ORCL), which is down 6.3% in pre-market trading.
There are other laggards, though. AutoZone (AZO) is down 2.6% after missing its consensus EPS estimate; Toll Brothers (TOL) is down 4.8% on some reported concerns about its gross margin guidance; and MongoDB (MDB) is down 8.2%, having reported better-than-expected results but also announcing that Michael Gordon, the company's COO and CFO, will be stepping down at the end of the year.
On a better note, Alaska Air Group (ALK) is up 11% after laying out its three-year strategic plan and issuing FY25 EPS guidance above expectations. Shares of ALK have taken flight, yet the broader market is staying close to the ground.
Currently, the S&P 500 futures are unchanged and are trading fractionally above fair value, the Nasdaq 100 futures are up 13 points and are trading 0.1% above fair value, and the Dow Jones Industrial Average futures are down 92 points and are trading 0.2% below fair value.
That is a setup for a fairly mixed open, which remains a reflection of a wait-and-see mindset. There is still the November Consumer Price Index on Wednesday, but for today there is also some waiting to see if market participants get involved to buy yesterday's dip.
They haven't been in a rush to do that, keeping an anxious eye on the 10-yr note yield, which has been gravitating toward 4.25%. It is currently up three basis points to 4.23%.
There was a muted reaction to the revised Q3 Productivity Report, which showed no change from the preliminary estimate of 2.2% (Briefing.com consensus 2.2%). Unit labor costs, however, were revised down to 0.8% (Briefing.com consensus 1.9%) from the preliminary estimate of 1.9% based on an equivalent downward revision to hourly compensation.
The key takeaway from the report is the inflation-friendly indicator of unit labor costs rising in more modest proportions in the third quarter.
As it so happens, the major indices will be moving in more modest proportions, too, at the start of today's trading. That is less important than how they look at the end of today's trading.
