Morning in New York: indices look downward

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

The key event this Tuesday will be the publication of the November labor market report, which will include some data for October due to the effects of the shutdown. The consensus expects employment growth of just 50k (September: +119k). Freedom Broker analysts forecast about 80k new jobs, assuming a weak October statistic. In our view, the recent growth in the number of open vacancies (JOLTS) has signaled a recovery in hiring, so we see a possible cooling of the market in October as a one-time phenomenon rather than a cycle reversal.

Of particular interest to the investment community is the November dynamics of unemployment (consensus: 4.5%, September: 4.4%). Our baseline benchmark is 4.46%, but we do not rule out a rise to 4.6% due to the peculiarities of self-determination of some civil servants during the suspension of government agencies. We do not consider this result as a deterioration of the trend and expect the indicator to normalize in the coming months, returning to the range of 4.4%-4.5%.

Also on Tuesday, retail sales data for October (consensus: +0.1% m/m, September: +0.2% m/m) and preliminary business activity (PMI) estimates from S&P Global for December (consensus for manufacturing index: 52.1 points; for service index: 54) will be released.

Futures on US indices demonstrate negative dynamics. We assess the balance of risks for the upcoming trades as negative with increased volatility ahead of the publication of a large block of macro data. We focus on S&P 500 fluctuations in the range of 6700-6850 points (from -1.7% to +0.5% to the previous session's closing level).

- Ford (F) reported a fourth-quarter write-down of $19.5 billion related to investments in electric vehicles. At the same time, management raised its full-year operating profit (EBIT) forecast to about $7 bln.

- News of large insider purchases has supported shares of Elanco Animal Health (ELAN): The company's CEO and CFO bought shares totaling more than $600k.

- Quotes of B. Riley Financial (RILY) soared about 30% on the premarket. The company delivered its long-awaited second-quarter report, showing a return to profitability and a significant reduction in debt.

- Shares of Navan (NAVN) are down more than 5% in pre-main trading after the release of its quarterly report. The company grew revenue by 29% YoY, but its guidance for the next three months suggests that this growth rate will slow to 23%, while investors were obviously expecting a more robust guidance.

- Kyverna Therapeutics (KYTX) shares are losing about 10% on the premarket after announcing a plan to raise $100 million through a secondary offering.

- Kodiak Sciences (KOD) shares fall more than 6% after announcing an additional 6 million shares.

- Ready Capital (RC) stock is down more than 10% on news of a dividend cut to $0.01 per share.

Trading on December 15 on the U.S. stock exchanges ended in the negative. S&P 500 lost 0.16%, NASDAQ 100 dropped by 0.51%, Dow Jones fell by 0.09%, and Russell 2000 fell by 0.81%.

The "Magnificent Seven" companies showed mixed dynamics. Tesla (TSLA: +3.56%) showed strong growth on the news about testing of robot cabs.

Investors were actively shifting capital from growth and technology stocks to defensive instruments. As a result, the healthcare sector (XLV: +1.32%) looked significantly better than the market, while the high-tech industry (XLK: -0.97%) was the outsider.

Exchange players preferred caution ahead of the publication of the labor market report and inflation data scheduled for this week. Against this background, profit taking continued in shares related to artificial intelligence, which were the leaders of growth this year.

The market ignored the "dovish" comments of the Fed representatives. Member of the Board of Governors Stephen Miran again spoke in favor of more intensive easing of monetary policy. Head of FRB New York John Williams noted that risks to the labor market have grown, and inflationary pressures have decreased.

Macroeconomic statistics, published on Monday, had a mixed character and did not have a significant impact on the mood of stock exchange players. The index of business activity in the manufacturing sector of New York (Empire State) unexpectedly went into the negative zone, falling to -3.9 points. However, its employment and new orders components signaled improvement. The homebuilders' sentiment index (NAHB) was in line with forecasts. This ambiguous picture contributed to preserving the wait-and-see attitude of traders.

- Immunome (IMNM: +15.7%) has received positive Phase 3 clinical trial results for one of its key drugs and plans to file for FDA approval in the second quarter of 2026.

- News of Alphabet's (GOOGL: -0.4%) testing of displaying real estate listings directly in search results caused shares of online realtor Zillow (Z: -8.5%) to fall.

- Intel (INTC: -0.8%) is in talks to buy AI chip developer SambaNova Systems for about $1.6 billion, a deal that could strengthen Intel's position in the AI hardware solutions segment, but the market is concerned about its strategic and financial viability.

- Westlake Corporation (WLK: -1%) announced the closure of several facilities and staff reductions due to persistently difficult market conditions. At the same time, it will spend about $415 mln on restructuring.

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