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Briefing.com Summary:
*The Advance Q3 GDP report showed a robust 4.3% increase in real GDP, accompanied also by a robust 3.8% increase in the GDP deflator.
*Treasury yields jumped after the GDP report, as traders questioned the Fed's recent rate cut.
*Novo Nordisk got FDA approval for the first oral GLP-1 for weight management.
The Christmas holiday is drawing near, which is why more participants are pulling away from active trading. Holiday pursuits are top of mind, yet the stock market is still occupying headspace for the simple reason that the indices are trading near record high levels as the end of the year also draws near.
Currently, the S&P 500 futures are down 13 points and are trading 0.2% below fair value, the Nasdaq 100 futures are down 69 points and are trading 0.3% below fair value, and the Dow Jones Industrial Average futures are down 101 points and are trading 0.2% below fair value.
There isn't much conviction in those indications, but know that the market can be fickle this time of year because of thin trading conditions.
A lack of substantive news before the 8:30 a.m. ET economic releases had kept the equity futures market in check, but the equity futures market weakened after the release of the data, which was both good and dated.
Real GDP increased at an annual rate of 4.3% in the third quarter (Briefing.com consensus: 3.0%), paced by the contributions from personal spending and exports. The GDP deflator, meanwhile, increased 3.8% (Briefing.com consensus: 2.7%) following a 2.1% increase in the second quarter.
The key takeaway from the report is that the U.S. economy was certainly running on the warm side in Q3. That will stir some concerns about the Fed's recent decision to cut rates in December and the risk of stoking increased inflation in pursuit of keeping the economy on a growth trajectory.
Durable goods orders declined 2.2% month-over-month in October (Briefing.com consensus: 0.3%), with transportation equipment orders (-6.5%) acting as the drag. Excluding transportation, durable goods orders increased 0.2% month-over-month (Briefing.com consensus: -1.1%) following an upwardly revised 0.7% increase (from 0.6%) in September.
The key takeaway from the report is that it was a better indicator of growth than meets the headline eye, evidenced by the 0.7% month-over-month increase in shipments and 0.5% month-over-month increase in new orders for nondefense capital goods excluding aircraft.
Treasury yields turned higher after these releases. The 2-yr note yield went from 3.49% to 3.53%, and the 10-yr note yield went from 4.15% to 4.19%.
The November industrial production data at 9:15 a.m. ET and the December consumer confidence data at 10:00 a.m. ET will provide additional talking points and trading catalysts when they are released. The same goes for the $70 billion 5-yr note auction results at 1:00 p.m. ET, which will come on the heels of yesterday's relatively weak 2-yr note auction.
In other news, Novo Nordisk (NVO) is up 9.0% on the news that the FDA approved the first oral GLP-1 for weight management (the Wegovy pill); Huntington-Ingalls (HII) is up 2.5% following President Trump's announcement of "Trump Class Battleships" that will be manufactured in the U.S.; and Warner Bros. Discovery (WBD) has acknowledged receipt of Paramount Skydance's (PSKY) amended, unsolicited tender offer to acquire the company.
That news is taking a backseat to the economic data and the direction of Treasury yields following the data.
