Stock futures were little changed Tuesday, as traders took a breather after fears of even higher rates sparked a sell-off during the previous session.
Futures tied to the Dow Jones Industrial Average traded 20 points higher, or 0.06%. S&P 500 and Nasdaq-100 futures rose marginally higher.
The Nasdaq Composite led Monday’s downward charge, dropping 1.93% for its biggest one-day drop since Nov. 9. The S&P 500 shed 1.79%, also notching its worst day in nearly a month. The Dow, meanwhile, lost 482 points, or 1.4%.
Better-than-expected November ISM Services data, which looks at the purchasing level of manufacturers as a gauge the health of the broader economy, pressured equities Monday. The report stoked fears that the Federal Reserve will need to hike rates for longer than anticipated to bring down inflation. The release aligns with the payrolls report late last week in pointing to resilience within some areas of the economy.
Wall Street is largely expecting a 50 basis point increase to interest rates at the Fed’s December meeting, but remain conflicted over how long the central bank’s interest rate hiking campaign will need to last, especially given the latest data.
Despite this backdrop, markets could still move higher in the months ahead, even though slowing growth and higher rates will persist even into the new year, wrote Jason Draho, UBS’ head of asset allocation, in a note to clients.
“A year-end rally may still be in the offing, though investors are likely to remain skittish until November CPI is released on the 13th and the FOMC meeting concludes on the 14th,” he said. “If there are no surprises with these events, momentum could continue.”
Investors will look ahead to data Tuesday morning on international trade for insight into the strength of the U.S. and global economy. Later in the day, they will watch for post-bell earnings reports from Smith & Wesson and Stitch Fix.
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THIS MORNING’S STOCK NEWS MOVERS:
Herbalife Nutrition (HLF) – Herbalife tumbled 9.8% in premarket trading after the nutrition and health products company announced a $250 million convertible note offering. Herbalife plans to use the proceeds to repurchase existing debt and for general corporate purposes.
STOCK SYMBOL: HLF
GitLab (GTLB) – GitLab shares surged 18.7% in the premarket following better-than-expected quarterly results for the maker of development operations software, with a smaller loss than analysts had anticipated and sales that exceeded consensus estimates. GitLab also issued an upbeat outlook.
STOCK SYMBOL: GTLB
Textron (TXT) – Textron rallied 9.6% in the premarket after the company’s Bell unit won a U.S. Army contract to provide next-generation helicopters. The contract could potentially be worth about $70 billion over a period spanning decades.
STOCK SYMBOL: TXT
AutoZone (AZO) – AutoZone beat top and bottom line consensus for its latest quarter, with the auto parts retailer also reporting a larger-than-expected rise in comparable-store sales. AutoZone has been benefiting from consumers investing in their existing cars amid still-high vehicle prices.
STOCK SYMBOL: AZO
Signet Jewelers (SIG) – The jewelry retailer reported quarterly profit of 74 cents per share, well above the 31 cents a share consensus estimate. Revenue beat consensus estimates as well. Signet’s same-store sales decline of 7.6% was in line with analysts’ estimates. The stock surged 8.1% in premarket action.
STOCK SYMBOL: SIG
JPMorgan Chase (JPM) – The bank’s stock rose 1.5% in the premarket after Morgan Stanley double-upgraded it to “overweight” from “underweight,” pointing to a variety of factors including growing market share for the company’s Consumer & Community Bank and improved operating leverage.
STOCK SYMBOL: JPM
Royal Caribbean (RCL) – Royal Caribbean lost 2.1% in premarket action after a double-downgrade to “underweight” from “overweight” at J.P. Morgan Securities. The analyst report is generally upbeat on the outlook for cruise stocks but notes that Royal Caribbean is particularly vulnerable to a less favorable market for raising capital given the timing of its future financial commitments.
STOCK SYMBOL: RCL
Axon Enterprise (AXON) – Axon fell 2.7% in premarket action after the Taser maker announced a $500 million convertible notes offering.
STOCK SYMBOL: AXON
General Electric (GE) – General Electric was upgraded to “outperform” from “perform” at Oppenheimer, which also set a price target of $104 per share. The report is upbeat on GE’s aviation and power operations, among other factors. GE shares rose 1.4% in the premarket.
STOCK SYMBOL: GE
FULL DISCLOSURE:
/u/bigbear0083 has no positions in any stocks mentioned. Reddit, moderators, and the author do not advise making investment decisions based on discussion in these posts. Analysis is not subject to validation and users take action at their own risk.
DISCUSS!
What’s on everyone’s radar for today’s trading day ahead here at r/stocks?
I hope you all have an excellent trading day ahead today on this Tuesday, December 6th, 2022! 🙂
