Stock Market Update

The S&P 500 futures are up 16 points and are trading 0.3% above fair value, the Nasdaq 100 futures are up 131 points and are trading 0.7% above fair value, and the Dow Jones Industrial Average futures are up 173 points and are trading 0.4% above fair value.

There's an upside bias in early trading, bolstered by positive responses to earnings results from technology names like Salesforce (CRM), Marvell (MRVL), and Okta (OKTA). 

Treasury yields are higher, but that hasn't deterred buying in equities. The 10-yr yield is up five basis points to 4.27% and the 2-yr yield is up three basis points to 4.20%.

The weekly MBA Mortgage Applications Index was up 2.8% with purchase applications rising 6% and refinance applications dropping 1%. The ADP Employment Change estimate for November is released at 8:15 a.m. ET, the final S&P Global US Services PMI for November is released at 9:45 a.m. ET, the November ISM Non-Manufacturing Index is released at 10:00 a.m. ET, and the weekly EIA Crude Oil Inventories is released at 10:30 a.m. ET. Also, the Fed's Beige Book is released at 2:00 p.m. ET. 

In corporate news:

• Salesforce (CRM 374.95, +43.52, +13.1%): misses by $0.03, reports revs in-line; guides Q4 EPS below consensus, revs in-line
• Marvell (MRVL 108.02, +12.11, +12.6%): beats by $0.02, beats on revs; guides Q4 EPS above consensus, revs above consensus
• Okta (OKTA 92.97, +11.26, +13.8%): beats by $0.09, beats on revs; guides Q4 EPS above consensus, revs above consensus
• Pure Storage (PSTG 65.00, +11.46, +21.4%): beats by $0.09, beats on revs; guides Q4 revs above consensus
• Eli Lilly (LLY 816.00, +2.67, +0.3%): Zepbound superior to Novo Nordisk's (NVO) Wegovy in head-to-head trial showing an average weight loss of 20.2% vs. 13.7%
• General Motors (GM 52.92, -0.74, -1.4%): discloses temporary impairment of $2.6-2.9 bln related to equity interest in China JVs and will recognize additional equity losses of approximately $2.7 billion resulting from the implementation of SGM’s restructuring plan
• Dollar Tree (DLTR 75.24, +2.76, +3.8%): beats by $0.05, beats on revs; guides Q4 EPS in-line, revs in-line; announces CFO transition
• Campbell Soup (CPB 44.45, -1.08, -2.4%): beats by $0.02, reports revs in-line; reaffirms FY25 EPS guidance, revs guidance; names new CEO; increases dividend

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the midweek session on a mixed note with South Korea's KOSPI (-1.4%) showing relative weakness after President Yoon briefly implemented martial law. Japan's Nikkei: +0.1%, Hong Kong's Hang Seng: UNCH, China's Shanghai Composite: -0.4%, India's Sensex: +0.1%, South Korea's Kospi: -1.4%, Australia's ASX All Ordinaries: -0.3%.
  • In economic data:
    • China's November Caixin Services PMI 51.5 (expected 52.5; last 52.0)
    • Japan's November Services PMI 50.5 (expected 50.2; last 49.7)
    • India's November Services PMI 58.4 (expected 59.2; last 58.5)
    • Hong Kong's November Manufacturing PMI 51.2 (last 52.2)
    • Australia's November AIG Construction Index -19.0 (last -40.9) and AIG Manufacturing Index -17.9 (last -19.7). November Services PMI 50.5 (expected 49.6; last 51.0). Q3 GDP 0.3% qtr/qtr (expected 0.5%; last 0.2%); 0.8% yr/yr (expected 1.1%; last 1.0%)
  • In news:
    • Rare earth producers outperformed in China after yesterday's ban on exports of several materials to the U.S.
    • Final November Services PMI readings from China (51.5) and India (58.4) missed expectations while readings from Japan (50.5) and Australia (50.5) were better than expected.
    • China will hold a Central Economic Work Conference next Wednesday and Thursday, and there is speculation that additional stimulus measures will be announced at that time.
• Major European indices trade on a mostly higher note while the U.K.'s FTSE (-0.3%) underperforms with AstraZeneca contributing to the weakness after having its price target lowered at HSBC. STOXX Europe 600: +0.3%, Germany's DAX: +1.1%, U.K.'s FTSE 100: -0.3%, France's CAC 40: +0.5%, Italy's FTSE MIB: +1.2%, Spain's IBEX 35: +0.7%.
  • In economic data:
    • Eurozone's November Services PMI 49.5 (expected 49.2; last 51.6). October PPI 0.4% m/m, as expected (last -0.6%); -3.2% yr/yr (last -3.4%)
    • Germany's November Services PMI 49.3 (expected 49.4; last 51.6)
    • U.K.'s November Services PMI 50.8 (expected 50.0; last 52.0)
    • France's November Services PMI 46.9 (expected 45.7; last 49.2)
    • Italy's November Services PMI 49.2 (expected 51.1; last 52.4)
    • Spain's November Services PMI 53.1 (expected 53.6; last 54.9)
  • In news:
    • Bank of England Governor Bailey said that four rate cuts are expected to take place next year.
    • France's Prime Minister Barnier is likely to lose his post when he faces a confidence vote at 10:00 ET.
    • European Central Bank policymaker Holzmann said that a rate cut larger than 25 basis points will not happen in December.
    • The eurozone's final Services PMI for November (49.5) was a bit better than expected, but it still reflected the first contraction in the sector since January.