>>> Down
* Axfood Cut to Sell at Carnegie; PT 230 kronor
>>> Initiation
* Telenet Rated New Buy at Jefferies; PT 42.50 euros
>>> Call
* Watch Crypto Prices to Gauge Power of Retail on Stocks, RBC Says
Macro :
- Fed Minutes Eyed for Details on Rate Liftoff, Shrinking Assets
Keep an eye on :
- NVG PL : Navigator to Increase Tissue Paper Prices Due to Higher Costs
After Hours Summary: Earnings make return after holiday break, SGH -5.1% and MLKN -4.3% head lower; WEJO +26.7% jumps on partnership with MSFT; INSP +5.4% higher on bullish guidanceAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: SENS +26.8% (reaffirms FY21 revenue guidance, also provides operational updates), INSP +5.4% (issues upside Q4 revenue guidance), ACMR +3.6% (guides FY21 and FY22 revs above consensus)
Companies trading higher in after hours in reaction to news: WEJO +26.7% (announces Wejo Natural Edge platform, in partnership MSFT), ONCT +10.3% (announces agreement with the FDA on Phase 3 registrational study design for zilovertamab), BYND +7% (KFC to launch Beyond Meat's meatless chicken on its menus starting Monday, according to CNBC), BCEL +2.1% (to present data on broadly neutralizing SARS-CoV-2 antibodies), MTRX +0.8% (adds execs to grow market position in hydrogen and renewable energy), NTNX +0.7% (eliminates dual-class stock structure), VAL +0.6% (announces several new contract awards), AMBA +0.3% (launches CV3 AI domain controller family), CATO +0.2% (announces planned retirement of CFO), BA +0.2% (ALGT to purchase 50 737 MAX jets totaling $5 bln, according to Reuters), FNKO +0.1% (names new chairman)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: SGH -5.1% (also announces 2-for-1 stock split), MLKN -4.3%
Companies trading lower in after hours in reaction to news: ANNX -25.1% (reports Phase 2 data for ANX005 in Huntington's disease), SWIM -8% (stock offering), ARE -3.5% (stock offering), ZYNE -0.3% (provides clinical development updates)
Closing Stock Market SummaryThe S&P 500 declined 0.1% on Tuesday in a mixed session, which was better represented by the sharp divergence between the Dow Jones Industrial Average (+0.6%) and Nasdaq Composite (-1.3%). Both the S&P 500 and Dow set intraday record highs while the Dow also set a closing record high. The Russell 2000 declined 0.2%.
Today's session was reminiscent of the classic reopening trade, except that it's 2022 and daily COVID-19 cases in the U.S. topped one million yesterday. Value/cyclical stocks outperformed at the expense of growth stocks, the Treasury yield curve steepened, and WTI crude futures settled at $75.00 per barrel (+$1.00, +1.3%).
More specifically, the S&P 500 energy (+3.5%), financials (+2.6%), industrials (+2.0%), and materials (+1.3%) sectors rose between 1-4%. The 10-yr yield increased four basis points to 1.67% while the 2-yr yield decreased two basis points to 0.76%. The U.S. Dollar Index increased 0.1% to 96.28.
Notably, the 10-yr yield has now risen 16 basis points start the year, increasing the probability that 2022 will be marked by a higher-interest rate environment, as forecasted by many analysts on Wall Street. This view weighed on the highly-valued growth stocks, albeit in a delayed reaction since the Nasdaq was up 0.1% in early action.
The information technology (-1.1%), health care (-1.4%), and consumer discretionary (-0.7%) sectors struggled amid weakness in the growth stocks. The Vanguard Mega Cap Growth ETF (MGK 260.20, -3.27) fell 1.2%. The iShares Biotechnology ETF (IBB 148.29, -4.08) fell 2.7%. The ARK Innovation ETF (ARKK 92.69, -4.30) fell 4.4%.
Selling interest in the growth stocks accelerated soon after the release of the December ISM Manufacturing Index at 10:00 a.m. ET. While the index decelerated more than expected to 58.7% (Briefing.com consensus 60.3%) from 61.1% in November, it still denoted an expanding manufacturing sector.
More encouragingly, the Prices Index in the ISM report showed a noticeable ease in inflation pressures. The Omicron variant could pose risks this month, but the inference from today (and prior weeks) is that market sees the economic impact from the variant as short-term.
Growth stocks eventually pared losses in the afternoon, helping the market end the Santa Claus rally period on a better note.
Reviewing Tuesday's economic data:
- The December ISM Manufacturing Index checked in at 58.7% (consensus 60.3%) versus 61.1% in November. A number above 50.0% is indicative of expansion. December marked the 19th straight month of expansion for the manufacturing sector, albeit at a slower pace.
- The key takeaway from the report is the recognition that price pressures softened some, presumably due to improved supply chain conditions; however, supply concerns (and inflation worries) aren't going to fade away knowing that the Omicron variant is driving global staffing challenges.
- Job openings decreased to 10.562 million in November from a revised 11.091 million (from 11.033 million) in October.
Looking ahead, investors will receive the ADP Employment Change report for December, the FOMC Minutes from the December meeting, the preliminary IHS Markit Services PMI for December, and the weekly MBA Mortgage Applications Index on Wednesday.
- Dow Jones Industrial Average +1.3% YTD
- Russell 2000 +1.1% YTD
- S&P 500 +0.6% YTD
- Nasdaq Composite -0.1% YTD


