Thursday December 1st


Stock futures slip after Wednesday’s rally

U.S. stock index futures slipped Thursday, a day after a sharp rally on Wall Street. Futures tied to the Dow Jones Industrial Average traded 48 points lower, or 0.1%. Nasdaq-100 futures fell 0.1%, while S&P-500 futures were near flat. Investors picked through a mixed bag of earnings reports that came after the market closed Wednesday and before the bell Thursday. Salesforce’s stock shed 7% in premarket trading on news that co-CEO Bret Taylor is stepping down. Snowflake tumbled about 6% on light product revenue guidance. On the other hand, Okta shot up nearly 16% after the identity management software company issued an upbeat full-year financial outlook. Five Below and Kroger gained about 9% and 3%, respectively, following reports showing the companies beat expectations for their most recent quarters. The moves followed a sharp rally Wednesday, with the Nasdaq Composite and the S&P snapping three-day losing streaks after Federal Reserve Chair Jerome Powell appeared to confirm a slowdown in the central bank’s tightening — a question that’s lingered in recent weeks. “Whether intentional or not, Powell sent a message that, in light of the tightening that’s already been done, he’s now more focused on the growth outlook and the employment picture than he is on bringing down inflation to 2%,” said Chris Senyek, chief investment strategist at Wolfe Research. On Wednesday, the Dow jumped 737.24 points, or 2.2%, while the tech-heavy Nasdaq Composite and S&P 500 surged 4.4% and 3.1%, respectively. Wednesday also marked the end of a winning month for the major averages. The Nasdaq rose 4.37% — its second positive month in a row for the first time since a three-month streak ending December 2021. The S&P 500 and Dow rose 5.38% and 5.67%, respectively, to finish their second month of gains for the first time since August 2021. Investors’ focus Thursday turns to initial jobless claims ahead of the much anticipated November jobs report due out Friday. The payrolls report is expected to provide more clarity on the labor market, and whether it continues to cool. Economists surveyed by Dow Jones estimate the economy added 200,000 jobs in November, down from 261,000 additions in October. They also anticipate that the unemployment rate held steady from the prior month at 3.7%. Personal income and personal consumption expenditures data is also expected before the bell. Markets in the Asia-Pacific traded higher, carrying on the optimism behind Wall Street’s rally as Federal Reserve Chair Jerome Powell confirmed smaller rate hikes could start in December. Hong Kong’s Hang Seng index rose 1.42%, with the Hang Seng Tech index trading 2.3% higher. In mainland China, the Shanghai Composite was up 0.45%, while the Shenzhen Component gained 1.4%. The Nikkei 225 in Japan rose 0.92% to 28,226.08 while the Topix rose 0.04% to 1,986.46. In South Korea, the Kospi gained 0.3% to 2,479.84 and the S&P/ASX 200 in Australia rose 0.96% to 7,354.4. Oil rose on Thursday supported by investor wariness that OPEC+ may cut supply further at its meeting on Sunday and as easing Covid curbs in China raised hopes about higher demand in the world’s top crude importer. Crude gained further support, and the U.S. dollar weakened, after the Federal Reserve Chair opened the door to a slowdown in the pace of rate hikes. Dollar weakness makes oil cheaper for other currency holders and tends to support risk assets. The Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, meets on Dec. 4. While sources said on Wednesday a policy change was unlikely, some analysts say a further cut cannot be ruled out. “Oil is finding support on investor optimism that OPEC+ will deliver further cuts in production when they meet,” said Ehsan Khoman, analyst at MUFG Bank, in a report. Brent crude was up 88 cents, or 1%, to $87.85 a barrel, while U.S. West Texas Intermediate crude futures added 95 cents, or 1.2%, to $81.50. Both benchmarks have posted three consecutive weekly declines, although the market has rebounded strongly this week after hitting the lowest in nearly a year on Monday. Brent then touched a low of $80.61, the lowest since Jan. 4. Gold prices extended gains for a third straight session on Thursday, as the dollar slipped after Federal Reserve Chair Jerome Powell said the U.S. central bank might scale back the pace of its interest rate hikes as soon as December. Spot gold gained 8.3% in November, ending its seven-month losing streak, as investors cheered Powell’s comments at the Brookings Institution. Lower rates tend to boost the appeal of non-yielding gold. But Powell also cautioned that the fight against inflation was far from over. Spot gold was up 0.6% at $1,779.80 per ounce. U.S. gold futures rose 2% to $1,794.40.