Update (Nov. 14, 2023): For today's live markets coverage, see here.
Stocks recovered from their early morning slump to finish the day little changed as markets digested credit rating agency Moody's cut to its U.S. credit outlook and prepared for tomorrow's inflation data.
The Dow Jones Industrial Average gained 0.2%, making it the only index to finish in the green. The S&P 500 slipped 0.1% and the Nasdaq lost 0.2%.
Moody's on Friday downgraded its outlook on America's Aaa rating to "negative" from "stable," citing the declining affordability of the country's debt. Political polarization in Washington, they said, could stand in the way of a much-needed plan to reduce the country's spending or increase revenue.
Treasury yields inched lower Monday, and the dollar lost ground against the pound and euro while gaining against the yen. Oil prices rose and Bitcoin slumped.
The Bureau of Labor Statistics will release the October Consumer Price Index (CPI) tomorrow and the Producer Price Index (PPI) on Wednesday, while the Census Bureau will release U.S. retail sales data, also on Wednesday. Consumers have propped up the U.S. economy this year, repeatedly surprising economists, markets, and the Federal Reserve with their deep wallets.
Stocks ended last week with a bang when the Nasdaq rose more than 2% to close near a two-month high and the Dow added nearly 400 points.
Dow Gains for Second Straight Session Ahead of Earnings, Inflation Reports
The Dow Jones Industrial Average gained 54 points, or 0.16%, rising for the second consecutive session as investors braced for a week that includes fresh inflation data, retailer earnings, a pivotal summit between the U.S. and China, and a debt-ceiling deadline in Congress.
Boeing (BA) shares jumped 4% after reports suggested China may lift its ban on the 737 Max jetliner, which has been grounded in the country since 2018. Shares were also boosted by the announcement that UAE-based airline Emirates would buy 95 Boeing passenger jets for $52 billion.
Shares of the Walt Disney Co. (DIS) rose 1.3% as the media giant continued to climb after last week’s earnings report showed strong subscriber growth for its streaming service.
Merck & Co. (MRK) shares gained 1% as the health sector moved higher by 0.6%.
Walmart (WMT) shares moved up by 0.9% ahead of the retail giant’s earnings report Thursday morning. Walmart is one of several retailers reporting quarterly earnings this week, including fellow Dow 30 member Home Depot (HD), shares of which lost 1.2% ahead of its earnings report before markets open tomorrow.
Nike (NKE) shares fell 1.8%, the footwear maker’s third straight session of declines.
Shares of Walgreens Boots Alliance (WBA) fell 0.5% to $20.17, their lowest close since 1998.
ExxonMobil Shares Rise as Construction Underway on New Lithium Well in Arkansas
ExxonMobil (XOM) on Monday said work has started on the construction of a lithium well in Arkansas, as the energy giant plans to become a leading producer of the critical metal used in batteries for electric vehicles (EV). Shares gained 1%.
Production is slated to begin in 2027, and could establish ExxonMobil as a key supplier for the EV market as well as a major corporate player in the clean energy transition.
"Lithium is essential to the energy transition, and ExxonMobil has a leading role to play in paving the way for electrification," Dan Ammann, president of ExxonMobil Low Carbon Solutions, said in a press release Monday.
Amman called the project a "win-win-win," in terms of "enhancing North American energy security, expanding supplies of a critical industrial material, and enabling the continued reduction of emissions."
Nvidia Stock Headed for Longest Winning Streak Since 2016
Shares of Nvidia (NVDA) were more than 1% higher about an hour before the closing bell, putting the stock on track to close higher for its ninth consecutive session, its longest winning streak since December 2016.
The world’s most valuable semiconductor company earlier today unveiled the H200, its newest advanced semiconductor for training artificial intelligence models.?
The company is a leader in developing chips for running AI, interest in which has caused its share price to more than double this year alone. Trading at $489 Monday afternoon, shares were less than 1% off their highest-ever close of $493.55, reached in late August. Nvidia is expected to show a surge in sales when it reports quarterly earnings on Nov. 21.
Tesla Inc. (TSLA): Shares of the electric vehicle maker gained more than 4% after the British gas station operator EG Group said it would outfit its stations across Europe with Tesla’s fast chargers.
Illumina Inc. (ILMN): Shares of the genetic analysis company fell nearly 5%, continuing to slide after reporting worse-than-expected quarterly results last Friday. The company also cut its full-year outlook, citing less demand as clients grow more cautious about spending.
Albemarle Corp. (ALB): Shares of the lithium miner fell more than 1% after oil giant ExxonMobil (XOM) said it would enter the lithium business, with the goal of producing and selling lithium for electric vehicle batteries starting in 2027. Exxon shares rose about 1%.
Alphabet Inc. (GOOGL): Shares of Google's parent company fell slightly after an expert testifying in Alphabet’s anti-trust trial revealed the company pays Apple (AAPL) 36% of the search revenue it generates through Apple’s Safari browser. The revenue sharing agreement is one of the tactics prosecutors allege Alphabet uses to maintain its dominance in the search market.
Tyson Shares Fall on Falling Revenue, Disappointing Outlook
Sales for beef, pork, and chicken all fell. Beef volume slumped 6.7%,?and pork volume was down 0.2%, while chicken volume rose 1.7%. Average prices for all Tyson products declined by 1.4%.
The company indicated it projects fiscal 2024 revenue to be about the same as in 2023, or $52.9 billion. That was about $1.5 billion less than analysts had been expecting.
Shares of Tyson Foods have lost more than a quarter of their value this year.
Novo Nordisk ADRs Slip, Medical Device Makers Rise Despite Wegovy Data
Shares of Novo Nordisk (NVO) slipped Monday morning while the stocks that its blockbuster weight-loss drugs Wegovy and Ozempic torpedoed earlier this year rose.
That’s despite research presented and published over the weekend that showed taking Wegovy, Novo Nordisk’s glucagon-like peptide (GLP-1) agonist indicated for weight loss, slashed the risk of heart attack, stroke, and death in patients with obesity and heart disease. The research could expand the use of the breakthrough drug.?
The market, though, may have already priced the study’s findings in, since Novo Nordisk shared headline results of the trial on August 8, sending its shares surging nearly 20%.
Still, Novo Nordisk's American depositary receipts have risen more than 50% year-to-date, dramatically outperforming DaVita (+15%), Insulet (-47%), and DexCom (-17%).
Boeing Lifts Dow at Start of 2023 Dubai Airshow
Shares of aircraft maker Boeing Co. (BA) jumped more than 4% early Monday, giving the Dow a boost, after receiving an eye-popping order from Emirates at the outset of the 2023 Dubai Airshow.
The Dubai-based airline Emirates on Monday ordered 90 of Boeing’s largest twin-engine jet, the forthcoming 777X, in a deal worth up to $52 billion.?
Shares were also given a boost by reports China is considering allowing local airlines to purchase and fly the Boeing 737 Max, which was first grounded more than 4 years ago after two fatal crashes. The decision, if made official, is expected to be announced this week at the Asia-Pacific Economic Cooperation (APEC) Leaders’ Meeting in San Francisco.
Morgan Stanley Sees S&P 500 Ending 2024 at 4,500
Analysts at Morgan Stanley see corporate earnings recovering next year, and a slightly higher S&P 500 as a result.
The bank expects the S&P 500 to trade at a 17x 12-month forward EPS multiple, equating to a 4,500 price target a year from now. That means the firm sees little upside for the index, which traded at about 4,400 early Monday and in late July traded at nearly 4,600.
Instead, there's "richer opportunity set under the surface of the market where valuations are more compelling than they are at the cap-weighted index level," the analysts wrote.
Stocks Making the Biggest Moves Premarket
- Monday.com Ltd. (MNDY): Shares of the enterprise software company gained more than 10% after the company said it swung to a profit in the most recent quarter and raised its full-year sales and earnings outlook.
- Boeing Co. (BA): Shares of the aircraft maker rose more than 3% after Dubai-based airline Emirates announced a $52 billion order at the start of the 2023 Dubai Airshow.
- HP Inc. (HPQ): Shares of the computer hardware maker gained more than 1% after analysts at Citi upgraded the stock to “buy,” citing improvements in the PC market.
- Tower Semiconductor Ltd. (TSEM): Shares of the chipmaker fell about 7% after it forecast fourth-quarter revenue of about $350 million, down about 13% from the prior year.
- Tyson Foods Inc. (TSN): Shares of the packaged food company fell about 3% after its fiscal-fourth quarter revenue of $13.35 billion came in below analysts’s estimates.
- Southwest Airlines Co. (LUV): Shares of the regional airline fell about 2% on reports its pilot union, the Southwest Airlines Pilots Association (SWAPA), was preparing for a potential strike to expedite contract negotiations.
Futures Down Slightly at Start of Busy Week of Economic Data
Futures connected to the Dow Jones Industrial Average were about 0.1% lower in premarket trading Monday.
S&P 500 futures contracts traded about 0.2% lower.
The Nasdaq 100 was on track to open in the read, with futures also down about 0.2%.