Stocks Pause Ahead Of CPI Report; Commodities, Tesla, Boeing Surge On Rising China Hopes: What's Driving Markets Monday?

The markets exhibited a mixed trend Monday, with technology heavyweights experienced a slight downturn as investors adopt a cautious approach ahead of the pivotal consumer price index report on Tuesday.

Adding to the market’s unease: Moody’s decision to revise the U.S. sovereign rating outlook Friday from stable to negative, citing growing concerns about fiscal management amid rising interest rates and significant fiscal deficits.

The U.S. dollar saw a modest decline of 0.2%, while commodities experienced a notable surge across the board. WTI crude oil and U.S. natural gas prices increased by 1.5% and 6%, respectively. The jump in the latter’s prices was particularly influenced by forecasts of colder weather and a subsequent rise in heating demand in late November.

Chinese-related stocks surged, dragging gains on Tesla Inc. TSLA and Boeing Co. BA, both up 4%, following reports that China may end its commercial freeze on buying 737 Max when U.S. President Joe Biden and Chinese President Xi Jinping meet this week.

Cues From Monday’s Trading:

The S&P 500 was flat for the day, while tech stocks in the Nasdaq 100 fell 0.24%. Blue chips outperformed, as the Dow Jones Industrial Average rose 0.30%, while small caps in the Russell 2000 were little changed.

US Index Performance on Monday

Monday Trading In Major US Equity ETFs

• The SPDR S&P 500 ETF Trust SPY was unchanged to $440.64.
• The SPDR Dow Jones Industrial Average ETF DIA rose 0.3% to $343.82.
• The Invesco QQQ Trust QQQ fell 0.3% to $377, according to Benzinga Pro data.

Looking at S&P 500 sector ETFs:

• The Energy Select Sector SPDR Fund XLE was the outperformer for the day, up 0.8%.
• The Utilities Select Sector SPDR Fund XLU was the laggard, down 0.9%.

Analyst Color:

Brad McMillan, chief investment officer at Commonwealth Financial Network, is optimistic regarding the resilience of the equity market. “Despite some bouncing around in both rates and the market, there is some resilience to both the economy and markets right now,” he said.

“The ability of the markets to weather bad news — based on the continued growth of the economy — is another sign that while there are real risks out there,” the overall picture is still pretty solid, he said.

Daniel Ives, an analyst at Wedbush, said the tech bull market has begun. “We believe the new tech bull
market has now begun and tech stocks are set up for a strong 2024 as the AI spending tidal wave hits the shores of the broader tech sector,” he said.

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Stocks In Focus:

• U.S. medical device companies’ stocks climbed on Monday, as concerns about the impact of Novo Nordisk’s weight-loss drug Wegovy on the cardiac health segment appeared less severe than investors initially anticipated, providing some relief to the struggling sector. DaVita Inc. DVA was up 8%, while Insulet Corp. PODD surged 7%, both among the S&P 500’s daily best performers.
• Plug Power Inc. PLUG rose 1.6% following the subpar results reported last week and the “going concern” warning.
• Under Armour Inc. UAA fell 5%, following the disappointing revenue guidance reported last week.
• Companies reacting to earnings include Henry Schein, Inc. HSIC (up about 6.5%) monday.com Ltd. MNDY (up about 11%), Tyson Foods, Inc. TSN (down about 3%) and Tower Semiconductor Ltd. TSEM (up about 2%).
• Fisker, Inc. FSR is due to report after the market close.

Commodities, Bonds, Other Global Equity Markets:

Crude oil rose 1.3%, with a barrel of WTI-grade crude trading at $78.27. The United States Oil Fund ETF USO was 1.4% higher to $72.77.  

Treasury yields were steady, with the 10-year yield down at 4.65% and the 30-year yield at 4.76%. The iShares 20+ Year Treasury Bond ETF TLT was 0.4% lower for the day. 

The dollar fell, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF UUP, down 0.2%. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust FXE, was 0.3% higher to 1.07.

European equity indexes closed in the green. The SPDR DJ Euro STOXX 50 Etf  FEZ rose 0.2%. 

Gold rose 0.4% to $1,947/oz. The SPDR Gold Trust GLD was 0.6% higher to $180. Silver was largely flat. Bitcoin BTC/USD was down 1.2% to $36,656.

Staff writer Piero Cingari updated this report midday Monday. 

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