The S&P 500 futures are down 48 points, Nasdaq 100 futures are down 278 points, and Dow Jones Industrial Average futures are down 211 points.
Equity futures are showing a negative trend ahead of the November Personal Spending and Income report at 8:30 ET. This report includes the Fed's preferred inflation measure, PCE Prices. There's also concern about a possible government shutdown in the U.S. after a House bill to fund the government until March 14 and suspend the debt ceiling for two years failed to pass. House Speaker Mike Johnson mentioned that Republicans have a "Plan C" to avoid a shutdown with expected votes this morning.
Today is also a quarterly options expiration day, which could result in high trading volume.
The People's Bank of China has kept its one-year and five-year loan prime rates at 3.10% and 3.60%, respectively.
Today's News
The Federal Reserve's core PCE Price Index, a key inflation measure, rose by 0.1% month-over-month in November, slightly below the 0.2% consensus. This cooler-than-expected increase also reflected in personal income and spending figures, which came in lower than anticipated. On a year-over-year basis, the core PCE increased by 2.8%, maintaining the pace from October. The broader PCE Price Index, including food and energy, also ticked up 0.1% month-over-month, translating to a 2.4% year-over-year increase, slightly below expectations.
Broadcom (AVGO, Financial), along with Astera Labs (ALAB) and Marvell Technology (MRVL, Financial), saw their price targets raised by Morgan Stanley, which highlighted the strong performance of AI in the semiconductor industry. The firm anticipates a robust finish to the year, with Broadcom's target increased to $265, Astera Labs to $142, and Marvell to $120, driven by gains against application-specific integrated circuits and enduring AI demand.
FedEx (FDX, Financial) announced it will spin off its freight trucking business, FedEx Freight, to focus on core operations, boosting its stock. The spinoff aims to enhance strategic, operational, and financial execution for both entities. Analysts suggest this could unlock significant value, with FedEx Freight potentially valued at $30 billion, while Bank of America estimates a sum-of-the-parts value for FedEx at $348 per share.
Novo Nordisk (NVO, Financial) experienced a stock drop after reporting late-stage trial data for its new weight loss therapy, CagriSema. The therapy demonstrated up to 23% weight loss compared to 16% with its existing obesity treatment, semaglutide. Despite achieving the primary trial goals, the market reacted negatively, while rival Eli Lilly (LLY, Financial) saw its shares rise.
Tesla (TSLA, Financial) issued a software update following a recall of over 694,000 vehicles due to a tire pressure monitoring system issue. The recall affects certain Model 3, Model Y, and Cybertruck vehicles, with Tesla addressing the non-compliant software through the update. The company has not reported any related accidents or injuries.
Chevron (CVX, Financial) signed a 20-year agreement to purchase LNG from Energy Transfer's (ET, Financial) proposed Lake Charles terminal. This deal will supply Chevron with 2 million tonnes of LNG annually, contingent on the project's final investment decision. The agreement highlights Chevron's strategic move to secure long-term energy supplies.
Oracle (ORCL, Financial) shares fell after Monness downgraded the stock to Sell, citing concerns over its high P/E ratio and uninspiring recent earnings results. Despite strong performance in the AI sector, Oracle's increased capital expenditure plans and lower-than-expected cloud revenue projections contributed to the downgrade.
FedEx (FDX, Financial) shares surged nearly 9% following its announcement to separate its freight unit. Despite mixed fiscal second-quarter results, the tax-free separation aims to streamline operations and enhance value. FedEx adjusted its annual forecast, citing weaker-than-expected demand in the less-than-truckload industry.
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