Pre-Holiday Week Delivering Choppy Stock & Crude Oil Trading

The typical “Santa Rally” may be in hibernation this year. Stocks were gearing up for another choppy session on Tuesday, struggling to build on Monday’s solid gains (figure 1) and continuing to follow the whims of the oil market as well as a cut to Q3 GDP. Back-and-forth trading weeks have been a common occurrence so far this month.

Thin, pre-holiday conditions are also likely to blame, with trading desks lightly staffed and markets due to close early on Thursday and shutter entirely on Friday for Christmas. European and Asian stock markets were also twisted in two-directional Tuesday trading, while the dollar fell versus its major counterparts.

GDP Haircut. Stock futures retained early losses after a government report showed a downwardly revised Q3 GDP reading. This broad measure of U.S. growth registered at 2%, the report issued this morning showed. That’s off the 2.1% previously recorded for the quarter but a touch better than the Street’s expected revised 1.8%. The revision was tied to a larger trade deficit and a bigger build in inventories than first recorded. Later in the morning, existing home sales data is expected by Street economists to show a slightly slower November pace compared to October.

Earnings Round-Up. ConAgra Foods CAG is an early gainer after the packaged food company beat the Street’s fiscal Q2 profit expectations. For the quarter currently underway, CAG said it expects adjusted earnings per share (EPS) to be “modestly higher” than the year-ago comparable, according to financial media reports covering the earnings. Nike NKE is due to report its fiscal Q2 results after the closing bell on Tuesday, a report that could offer a snapshot on strong-dollar impact on overseas profits and the overall strength of the consumer. Specifically, analysts reporting to Thomson Reuters are looking for average EPS of $0.86, up 13.1% over last year’s results, on topline sales growth of nearly 6% to $7.81 billion.