Stocks Eye Rebound Following 2-Day Slump; Bitcoin, Ethereum Surge Past Trillion-Dollar Combined Market Value

Wall Street is poised for a rebound in Wednesday’s session, with futures on major U.S. indices in the green at 8:00 a.m. New York time, following two consecutive sessions of declines for the S&P 500.

A worse-than-expected print in the ADP National Employment Report for November has revamped speculation about Fed rate cuts in 2024, ahead of the eagerly awaited jobs report scheduled for release on Friday. In November, the private employment growth was 103,000 according to the ADP, below the 130,000 expected.

On Tuesday, job openings dropped from 9.35 million in September to 8.733 million in October, raising concerns among market participants about a continuing softening in labor market conditions.

The dollar settled at a steady level after initial gains in the early morning, while Treasury yields remained mostly unchanged. Oil prices continued to decline, with WTI trading at $71 per barrel, and gold edged up by 0.5% to $2,035 per ounce.

Chinese stocks traded domestically are still facing downward pressure following Moody’s decision to downgrade China’s credit outlook from neutral to negative, citing a challenging fiscal path for the world’s second-largest economy. The FTSE China A50 Index fell by 0.44%, reaching lows last seen in early November 2022.

In the cryptocurrency market, momentum remains solid, with Bitcoin BTC/USD surpassing $44,000 and reaching a market cap of $860 billion. Alongside Ethereum ETH/USD, the two largest cryptocurrencies now have a combined value of approximately $1 trillion.

US Futures Performance On Wednesday

In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust SPY edged up 0.4% to $458.50 and the Invesco QQQ ETF QQQ rose 0.51% to $389.28, according to Benzinga Pro data.

The CBOE Volatility Index, or VIX, is trading 0.9% lower to 12.74.

Economic Data To Watch

• In November, private businesses added 103,000 workers, down from 113,000 in October and below the expected 130,000. Chief economist at ADP, Nela Richardson, highlighted the pivotal role of restaurants and hotels in post-pandemic employment growth but also suggested that this trend is waning, indicating a likelihood of more modest hiring and wage growth for the overall economy in 2024.
  
• Mortgage Bankers Association of America reported a 2.8% week-on-week growth in mortgage applications, marking the fifth straight week of improvement. The 30-year fixed mortgage rate fell further from 7.37% to 7.17%, the lowest since mid-August, amid persistent declines in U.S. Treasury yields.
  
• The Energy Information Administration (EIA) will release its crude stock change data for the week ending Dec.1.

Stocks In Focus During Premarket

• NVIDIA Corp. NVDA rose about 0.9% in premarket trading, following the company’s announcement of its close collaboration with the U.S. government to guarantee compliance with export restrictions for its new chips intended for the Chinese market.
• Tesla Inc. TSLA was 1.2% higher on positive news about the production of a smaller Model 2.
• Lucid Group Inc. LCID surged 1.7% after revealing plans to lower prices and offer greater customization options for its 2024 models, targeting a wider consumer base in North America.
• Exxon Mobil Corp. XOM was 0.4% higher after the company announced a buyback program of $20 billion per year from the time it closes its Pioneer Natural Resources Co. acquisition.
• Altria Group Inc. MO and Philip Morris International Inc. PM both experienced declines of 1.7% and 1.3%, respectively, as they were impacted by the ripple effect of British American Tobacco Industries plc‘s BTI substantial $31.5 billion devaluation of its cigarette brands, a move that had caused an 8% drop in the stock the previous day.
• SentinelOne Inc. S is up more than 19% following positive quarterly earnings.
• Avis Budget Group. Inc. CAR is up more than 4% after the company announced a special cash dividend of $10 per share.
• Plug Power Inc. PLUG tumbled over 7% after Morgan Stanley downgraded the company from Neutral to Underweight, and lowered the price target from $3.5 to $3.

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