Morning in New York: employment statistics will set the vector for trades

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

The focus of the upcoming session will be on the open job openings (JOLTS) data for October (consensus: 7.117 million, September: 7.227 million), which could adjust expectations for tomorrow's Fed rate decision. A reading in the 7.1-7.2 million range would signal a continuation of the moderate cooling of the labor market. A drop below 7 million will be a significant signal of deterioration in labor demand and will contribute to an increased assessment of the probability of active easing of monetary conditions.

The NFIB Small Business Optimism Index for November (consensus: 98.3 points, October: 98.2) will complete the picture. A decline in the index may increase concerns about a decline in business activity, while stabilization will confirm a mild slowdown in the economy.

An important driver for the technology sector will be news from the White House. Donald Trump intends to allow Nvidia to supply H200 chips to "approved" customers in China on the condition that 25% of the proceeds from sales of these products will be transferred to the US budget. This partially removes uncertainty for semiconductor companies, but at the same time they face the actual imposition of a targeted duty on their goods. In addition, it remains unknown whether China will be satisfied with the terms proposed by Washington.

The renewable energy sector may be supported by a federal court ruling that invalidated President Trump's executive order banning new wind generation projects. This creates opportunities to resume issuing permits and stimulates investment in the sector.

AutoZone (AZO) and Campbell Company (CPB) will report quarterly results before the open of trading this Tuesday. Cracker Barrel Old Country Store (CBRL), Dave & Buster's Entertainment (PLAY) and GameStop (GME) will report after the close of the main session.

Futures on US indices demonstrate about zero dynamics. We assess the balance of risks for the upcoming trades as neutral with low volatility. We focus on S&P 500 fluctuations in the range of 6810-6880 points (from -0.5% to +0.5% to the previous session's closing level).

- Lower gross margins and profits in the fourth quarter led to a more than 4% drop in the stock price of developer Toll Brothers (TOL), which specializes in luxury housing. At the same time, the company's revenue beat consensus. Pressure on margins came from the need to stimulate demand through discounts and promotions. This adds to fears of a cooling housing market.

- Graphic Packaging (GPK) shares were negatively impacted by news of a CEO change next year, as well as an underwhelming financial outlook.

- Quotes of SLM Corp (SLM) before the start of the main session lose about 3% amid the publication of an updated investor presentation. Despite optimistic expectations for loan volumes on the back of student loan reform, investors focused on the risks associated with high debt burden and uncertain macroeconomic backdrop.

- A 50% year-over-year revenue increase provided Mama's Creations (MAMA) securities with a driver for a 15% premarket surge. Additional support came from the Crown One acquisition as well as successful expansion into major retailers including Target. This was a validation of a successful strategy to scale the business.

December 8 trading on the U.S. stock exchanges ended in a moderate minus. S&P 500 lost 0.35%, Nasdaq 100 fell by 0.25%, Dow Jones fell by 0.45%, Russell 2000 corrected by an insignificant 0.02%. The pressure on the quotes came from the growth of government bond yields and investors' caution on the eve of the Fed meeting.

The companies of the "Magnificent Seven" showed multidirectional dynamics. Tesla (TSLA: -3.39%) and Alphabet (GOOGL: -2.3%) sold off, while Microsoft (MSFT: +1.63%) and Nvidia (NVDA: +1.72%) showed the strongest growth.

The broad market index movement was narrow: only the technology sector closed in the plus (XLK: +0.7%), while the list of outsiders was led by cyclical consumer goods producers (XLY: -1.45%).

Monetary easing following the results of the FOMC meeting starting today is almost beyond doubt among the investment community. At the same time, fears that the regulator will hint at a more restrained adjustment of monetary conditions are growing. Against this background, government bond yields rose across the curve, putting pressure on "growth" companies.

Consumer expectations from the FRB of New York recorded stability of respondents' inflation targets at all time horizons with improvement of labor market forecasts. This does not give the Fed any reason to tighten its rhetoric. At the same time, households' perception of their financial situation has noticeably deteriorated, which is another argument in favor of the need for monetary policy easing.

- Shares of Warner Bros. Discovery (WBD: +4.4%) rose after a counter offer to buy from Paramount Skydance (PSKY: +9%) at $30 per share. Recall that late last week, Netflix (NFLX: -3.4%) announced a takeover bid for the asset at $27.75 per share. Continued risks of disapproval of each of the potential deals by antitrust authorities increase uncertainty about the outcome of the fight for the asset.

- The announcement of its impending inclusion in the S&P 500 Index supported shares of Carvana (CVNA: +12.1%).

- The announcement of a $2 billion convertible bond offering drove CoreWeave (CRWV: -2.3%) down.

- Gap 's (GAP: -3.9%) capitalization began to decline on news of the sale of 250,000 of its securities by major shareholder John Fisher.

This article was AI-translated and verified by a human editor