FT : Tesla’s delayed S&P 500 entry highlights rise of profit metric

Tesla’s delayed S&P 500 entry highlights rise of profit metric
Deutsche Börse has announced similar requirements for new entrants to the Dax index

Tesla joined the Russell 1000 stock index back in September 2010, priced at just $4.40 a share, and zoomed into the rival Nasdaq 100 benchmark in July 2013, when it was trading at $26 a pop.

It is now the sixth-largest constituent in each with a market capitalisation of $606bn.

Yet Elon Musk’s love child will only make its debut in the S&P 500 next week — probably at north of $600 a share.

For investors in exchange traded funds and other passive products tracking these indices, this matters. Some are sitting on bumper windfall gains in Tesla because its share price has risen sharply since their index trackers bought in. Quite a few others — given that the S&P 500 has an estimated $4.6tn indexed against it — are only now about to buy it.

The primary hold-up has been that, unlike most equity benchmarks, the S&P 500 insists that all new entrants must be profitable, a criterion Tesla has only now satisfied.

The select club of indices with this requirement is growing larger, though: Deutsche Börse said last month that its Dax index, the benchmark index for German blue-chip stocks, will henceforth only admit profitable companies.

“We got feedback that membership of the Dax is an important measure of a company’s success,” said Stephan Flägel, global head of benchmarks and indices at Qontigo, the arm of Deutsche Börse Group that includes the Dax and Stoxx families of indices.

“Members of the Dax should have a way of showing they have a viable business model and having profitability or positive cash flow is one measure to indicate that,” he added.

The move is part of a wider revamp of the Dax, which will expand from 30 to 40 stocks, after the Wirecard scandal that saw the formerly high-flying index constituent implode after saying €1.9bn was missing from its accounts.

From now on, all new entrants to the Dax must have positive ebitda (earnings before interest, taxation, depreciation and amortisation) in their two most recent annual financial statements. The measure will not apply to existing index constituents in order to minimise turnover.

“We have made these changes partly due to the issues we have encountered this year in general, with volatility in the market, but also the issues around Wirecard which prompted us to look at our rules and methodologies across our indices,” Mr Flägel said.

The profitability screen is tighter than that for the S&P 500, which only insists on a company’s most recent quarterly earnings and the sum of its trailing four consecutive quarters’ earnings both being positive.

However, it would not have been sufficient to bar Wirecard from entry to the prestigious German index, given that it was reporting positive ebitda for years before its implosion.

“The information that you can take into account is publicly available information taken from company reports, filings for example. That is often not sufficient to identify a fraud-type situation,” said Arne Staal, global head of research and product management at LSEG, owner of FTSE Russell, which does not use profitability screens.

If the filings are bogus, “there’s nothing we can do about that,” Mr Staal added. “The nature of fraud is that it’s hard to detect from public filings. Look at Enron.”

Mr Flägel said Stoxx had received more than 600 responses to its consultation, and that “the profitability criteria, that proves the viability of a company’s business model, [had been] welcomed by the market”.

As for missing out on fast-growing, but not yet profitable companies, Mr Flägel said they would still qualify for the group’s MDax index of mid-cap stocks.

There are no plans for the wider Stoxx index family to adopt profitability filters.

Sebastien Lieblich, global head of equity solutions at MSCI, said it had no plans to add profitability screens to its indices, as its role was to “capture the broadest investable opportunity set for international investors”. Only stocks with insufficient liquidity or free float availability, or markets that are closed to foreign investors, are omitted, he said.

Screening on the basis of profitability “would be applying a preference, it would be a kind of active stance”, Mr Lieblich said, adding that investors could instead adopt a “smart beta” factor tilt such as quality or dividend yield if profitability was an important metric for them.

FTSE Russell’s Mr Staal agreed, arguing that “pure market cap [weighted] indices represent the available investment opportunity as accurately as possible”, with stock prices inherently incorporating “the market’s view of the profitability and viability of a company”.

And while he “completely agreed” that companies should have a viable business model in order to be included in an index, “the question is what does viable mean and how do you measure it?”.

“A company can have positive ebitda and negative cash flow. To a lot of people that means the company is not profitable,” he added.

This complexity is highlighted by the S&P 500’s profitability screen. Although, like the Dax, it is predicated on ebitda, this is a different measure of ebitda as it is calculated using US GAAP accounting standards, which differ from the principles-based IFRS standards used in Europe.

Howard Silverblatt, senior index analyst at S&P Indices, said given the 500’s “heavily institutionalised” investor base, it was “looking for profitability and stability in companies”, not those that are “in development or any kind of a definition of a start-up”.

He accepted this could mean getting delayed exposure to a stock like Tesla, but argued it also avoided exposure to duds.

“You can potentially keep somebody out who is going to be the next Apple, but most companies will be at the other end [of the spectrum],” he said.

WWD : Farfetch China Deal With Alibaba, Richemont Nears Completion

Farfetch China Deal With Alibaba, Richemont Nears Completion
Alibaba has named J. Michael Evans to the board of directors.

LONDON — Farfetch’s partnership with Alibaba and Richemont took a step toward completion this week, with the online fashion platform issuing a total of $600 million, or $300 million each, of 0 percent convertible senior notes, due in 2030.

It has also issued to the Pinault-owned Artemis Capital Management 1,889,338 of Farfetch Class A ordinary shares for total gross proceeds of approximately $50 million. The deal remains subject to customary closing.

Alibaba has also nominated its president, J. Michael Evans, to the Farfetch board, effective immediately.

Evans has been the president of Alibaba Group since August 2015 and is a member of its board. He was previously vice chairman of the Goldman Sachs Group, Inc., until his retirement in December 2013. He served as chairman of Asia operations at Goldman Sachs from 2004 to 2013, and was the global head of growth markets at Goldman Sachs from January 2011 to December 2013.

Evans is a board member of City Harvest, a trustee of the Asia Society, and a member of the Advisory Council for the Bendheim Center for Finance at Princeton University. In August 2014, he joined the board of Barrick Gold Corp. Evans received his bachelor’s degree in politics from Princeton University in 1981.

As reported last month, the new global strategic partnership will see Richemont and its Chinese ally Alibaba pour hundreds of millions of dollars into Farfetch Ltd., and into a new joint venture called Farfetch China.

The partners said the ultimate aim of their alliance is to provide luxury brands with “enhanced access” to the China market, and to fuse physical and digital retail at a time when more people are shopping online, but still hungering for in-store experiences.

As part of the deal, Farfetch will also launch on Alibaba’s luxury platforms in China. The model is similar to what Net-a-porter and Mr Porter, both of which are owned by Richemont, have done as part of a separate JV with Alibaba inked in 2018.

As part of the alliance unveiled on Nov. 5, a steering group to include Rupert and Kering chairman and chief executive officer François-Henri Pinault will be created.

The alliance was the realization of a long-held dream of Richemont’s founder and chairman Johann Rupert.

“We’re not big enough, or tech-savvy enough, to do this on our own. All of the luxury goods industry combined would have difficulty in fighting giants like Amazon, which is why I asked everybody, in 2015, to invest in Yoox Net-a-porter,” Rupert said on a call in November to discuss Richemont’s first-half results for fiscal 2020-21.

“I was really looking at a business model, like Spotify, where the content owners have shares in a platform that is run autonomously. Then you, as a content owner, have access to all of the technology and systems to serve your clients. That is our view.”

WWD : China Luxury Goods Market to Grow 48% This Year, Says Bain and Tmall

China Luxury Goods Market to Grow 48% This Year, Says Bain and Tmall
Luxury e-commerce sales in China expected to hit 23 percent up from 13 percent of the market's total luxury sales this year.

SHANGHAI — The luxury goods market in mainland China will likely achieve 48 percent growth in 2020, reaching nearly 346 billion renminbi, or $52.8 billion, according to a joint report by Bain and Tmall released Wednesday, doubling China’s overall share of the global luxury market this year.

On the e-commerce front, China’s annual luxury online penetration increased from about 13 percent last year to 23 percent in 2020, with Bain adding it expects that this reflects a permanent change in shopping behavior.

“Nearly 40 percent [of survey respondents] said they plan to increase their share of online luxury shopping over the next few years; another 40 percent said they plan to maintain their share,” the report said. “Most brands share the consensus that luxury online penetration (including omnichannel) will reach about 20 to 25 percent within three years.”

In the luxury beauty category, e-commerce grew by about 60 percent for the year to October and online penetration will increase from about 28 percent in 2019 to about 38 percent in 2020, driven by skin care and fragrance. The luxury fashion and lifestyle category, starting from a small base, has grown by more than 100 percent for the year to October and is expected to increase online penetration from about 5 percent in 2019 to about 7 percent in 2020.

Off-line, Hainan Island’s duty-free sales are one to watch. This year, they are set to grow 100 percent from 2019 and will account for 7 to 9 percent of China’s luxury market sales. Total Hainan duty-free sales had reached 21 billion renminbi by the end of October, with sales up 98 percent compared to 2019.

Despite the stellar growth, brands have their concerns. For starters, most brands manage Hainan through their global travel retail division, creating challenges for local teams to holistically plan and serve China’s luxury market.

Secondly, it is an entirely wholesale model — additional discounts offered from the retailer on top of tax exemption could create a problem for brand image.

“Price comparisons show that Hainan-listed duty-free prices for fashion and lifestyle goods can be 10 to 25 percent more competitive than official mainland-listed prices. For luxury beauty, those numbers jump to 25 to 40 percent,” the study said.

The report also said that “luxury brands have reservations about Hainan’s highly commercial and transactional shopping environment, which leaves consumers queuing for hours outside stores. They hope that new premium shopping malls will be developed over the next few years, in time to be ready when the whole island becomes duty-free.”

With the addition of COVID-19-related travel restrictions, mainland China’s portion of Chinese global luxury purchases this year reached a peak of about 70 to 75 percent. But this is expected to come down over the next five years as global travel conditions normalize. Pre-COVID-19, domestic luxury brands’ share of Chinese consumption varied from 20 to 50 percent.

“We expect China to progressively reopen its border, beginning with other Asian markets in Q2 or Q3 2021,” Bain said. “Global conditions are unlikely to return to normal before 2022 or even 2023. Besides, Chinese consumers will probably remain cautious about international travel even after borders reopen, and Hong Kong is unlikely to return to its pre-crisis level of luxury sales. Therefore, most luxury brands believe that positive domestic growth will continue in 2021 at about a 30 percent level, with challenges increasing during the second half of the year.”

Nevertheless, brands that operate in mainland China “will have at least one year and possibly two to woo shoppers and convince their consumers that domestic shopping is a better, more sustainable experience.”

WWD : Pambianco Study: Golden Goose Ranks First in Potential IPO List

Pambianco Study: Golden Goose Ranks First in Potential IPO List
Stone Island, which ranked first in the 2019 edition, follows Golden Goose and the Ermenegildo Zegna Group holds the third spot.

MILAN — This year, Golden Goose is taking Stone Island’s top spot as the company with the most potential to publicly list, according to Milan-based consultancy Pambianco Strategie di Impresa. Ermenegildo Zegna ranks third after Stone Island in second position.

The study analyzes the companies that have the economic financial and positioning characteristics to be listed in a range of three to five years, regardless of whether a listing is in the plans of the firm.

In 2019, Golden Goose followed Stone Island in the ranking, and in one year things have changed dramatically — and not only due to the impact of the coronavirus pandemic.

Golden Goose in February changed hands, as private equity fund Permira bought the Italian brand from the Carlyle Europe Buyout fund. The price was pegged at 1.28 billion euros, which implied that Permira paid more than 14 times the company’s 2019 earnings before interest, taxes and depreciation. Golden Goose continues to be led by chief executive officer Silvio Campara. Golden Goose achieved much of its success with the Superstar sneaker, which offers 400 variations a year. The brand prides itself on keeping its products handmade in Italy and offers customization through the Lab project.

Earlier this month, Moncler revealed it was taking over Sportswear Company SpA, owner of the Stone Island brand, in a deal valued at 1.15 billion euros, corresponding to a multiple of 16.6 times 2020 earnings before interest, taxes, depreciation and amortization and a multiple of 13.5 times the estimated 2021 EBITDA. Stone Island, founded in 1982 by Massimo Osti, is helmed by chairman and creative director Carlo Rivetti.

In the beauty sector, Euroitalia ranked first. The Italian company produces and distributes fragrances for Versace, Moschino, Dsquared2 and Missoni, among others. Sodalis and Davines ranked second and third, respectively.

This edition, wine companies were introduced as well as companies with sales totaling below 50 million euros.

Each year Pambianco ranks the companies based on eight parameters: percentage growth (in this case in the 2017 to 2019 period); average EBITDA percentage in the three-year period; brand awareness; size; exports; distribution control (directly operated stores and e-commerce); debt and market positioning (high, medium, low).

David Pambianco, chief executive officer of Pambianco Strategie di Impresa, said being part of the list means certifying the companies’ “ability to produce value.”

Adding smaller companies “further values the ability of our country to make room for companies that, while small in terms of size, express excellence and character,” said Pambianco.

The study for the 2020 edition selected 40 companies in fashion; 10 in beauty; 20 in design, and 10 in the wine sector, in addition to five small companies in each sector.

“Creativity, excellence, intuition and innovation once again emerged as fundamental qualities for Made in Italy companies. The stock markets have shown they strongly believe in the Italian entrepreneurial stories marked by a strong drive to grow, to internationalize and innovate and are waiting for new investment opportunities,” Pambianco added.

Among the smaller companies, swimsuit label MC2 ranked first, followed by outerwear brand Ciesse Piumini and down jacket specialist Save the Duck.

In 2019, Italian investment bank Mittel acquired 90 percent of Sport Fashion Service Srl, the company operating the Ciesse Piumini brand, 11 years after exiting an investment in Moncler. The fashion label was founded in 1976 by Silvano Cinelli and rose to prominence in the Eighties when Caroline of Monaco and her late husband Stefano Casiraghi sported Ciesse Piumini jackets during the Paris-Dakar rally.

In the wine category, Antinori ranked first, followed by Frescobaldi and Santa Margherita.

WSJ : The Private Collection of Christo and Jeanne-Claude to Go on Sale

The Private Collection of Christo and Jeanne-Claude to Go on Sale
Sotheby’s will auction more than 400 pieces, including works by Andy Warhol and Yves Klein

Art lovers will get a rare glimpse into the private collection of one of the world’s best-known public art duos when Sotheby’s auctions works owned by artists Christo Javacheff and his wife Jeanne-Claude, in Paris in February.

Known professionally by their first names, Christo and Jeanne-Claude gained an international reputation starting in the 60s by draping entire buildings, bridges, island shorelines and New York’s Central Park in colorful fabric—temporary, free installations that often took years to organize and then attracted millions of visitors. After Jeanne-Claude died at age 74 in 2009, Christo carried on, most recently stacking around 7,500 oil barrels to form an Egyptian tomb-like “Mastaba” structure he floated in London’s Serpentine Lake two years ago. Christo died at age 84 in May.

Over the years, the couple amassed a collection of more than 400 objects they hung floor-to-ceiling in their New York home studio, including pieces they got as gifts or by swapping their own works with other postwar artists they admired, including Lucio Fontana, Yves Klein and Mimmo Rotella. Sotheby’s expert Simon Shaw said the sale by the estate of these pieces, which is estimated to top $4 million, brims with canvases and works on paper whose small scale contrasts with the artistic pair’s own outsize art.

“It’s the intimate universe the artists lived in, not their public persona,” said Mr. Shaw, adding that one fueled the other. “Every wall of their studio refracts elements we see in their practice.”

On one wall near the kitchen, there hung everything from an Andy Warhol from 1964, “Jackie,” which is estimated to sell for at least $975,000, to Klein’s 1958 “Untitled Blue Monochrome (IKB 19)” which is estimated for at least $375,000. On top of their refrigerator sat a couple of cookie jars that once belonged to Warhol, including one shaped like a bunch of bananas. It’s estimated to sell for $365.

One of the earlier, larger pieces in the sale is Gerrit Rietveld’s 1919 “Hoge Armchair,” which the couple admired while visiting the home of collector Martin Visser in the Netherlands. In 1963, the collector gave them the chair in exchange for one of their signature works, a wrapped package. When the couple and their young son moved from Paris to New York the following year in 1964, the chair was the couple’s prize possession, said studio manager Lorenza Giovanelli. “They only brought a couple suitcases, mattresses and that chair,” Ms. Giovanelli said. It’s estimated to sell for at least $97,500.

Other pieces in the sale reveal the little-known friendships the artists had with peers like Pop pioneer Claes Oldenburg, who is best known for creating shiny, metal sculptures of everyday objects and food shaped from soft materials like vinyl. While their artistic styles appear to differ, Ms. Giovanelli said the artists met when they lived alongside each other in New York’s Chelsea Hotel in 1964, and later they briefly had studios in the same Soho building, which Christo later bought. The sale includes a trio of Mr. Oldenburg’s early 1960s painted plaster sculptures of ice cream, steak and bacon and eggs, which are estimated to sell for at least $49,000.

“They were memories, and every piece had a meaning,” Ms. Giovanelli said of the collection.

Sotheby’s said the sale will also include several of Christo and Jeanne-Claude’s own works spanning their career. Proceeds from the auction will go to the estate, which hopes to form an artist foundation, she said. But for now the artists’ studio will remain active, as workers plan to install the artists’ final project—the wrapping of Paris’s Arc de Triomphe next September. “We promised we’d see it through,” she said.

FT : The €1m-a-week ski holiday in the Russian far east

The €1m-a-week ski holiday in the Russian far east
Make first descents on remote volcanic islands then return by helicopter to Oleg Tinkov’s just-launched superyacht


Oleg Tinkov, the Russian banking billionaire, is offering his brand new superyacht as the base for what could be the most adventurous and extravagant ski holidays ever devised.

The son of a Siberian coal miner, Tinkov, 52, is a former competitive cyclist who made a fortune selling everything from dumplings to electronics and founded Russia’s biggest online bank.

He already rents out his collection of holiday homes, each devoted to one his favourite sports and all called La Datcha. They include lavish ski chalets in Courchevel and Val Thorens, a fishing lodge in the Volga delta, a villa in Baja California for offshore fishing and water sports, and a Tuscan palazzo designed as a base for road biking (Tinkov is also the former owner of a Tour de France winning cycling team, with whom he liked to ride out on training runs).

The latest La Datcha is a 77-metre, six-deck yacht, equipped to carry a dozen guests in utmost luxury but also in safety to the furthest corners of the planet, including the polar regions. Created by the Dutch shipbuilder Damen Yachting, the so-called “expedition yacht” can be self-sufficient for 40 days without docking, has a strengthened “ice class” hull, and a crew of 25.

Hidden below deck are a submersible, various jetskis and tenders, two snowmobiles and a fully equipped hangar containing two helicopters. Having a second aircraft gives a back-up and rescue capability, enabling guests to go heli-skiing in extremely remote places. The yacht is due to sail Russia’s Kamchatka Peninsula and Kuril Islands between April and June 2021, offering the chance to descend volcanic slopes that have never been skied before. In December 2021 and January 2022, it will head south to offer skiing in Antarctica.

“Skiing a run in perfect powder is an amazing feeling but if you take that run and put it on a smoking volcanic island in the middle of the ocean, it takes skiing to an entirely different level,” says James Morland, the founder of Elemental Adventure, a specialist heli-ski tour operator that has run pioneering trips to the Kuril Islands since 2016. It is offering heli-ski trips on La Datcha for 12 people from €1m per week.

Tinkov himself is unlikely to be able to enjoy the yacht in the near future. He is currently in London being treated for leukaemia while also fighting extradition to the US on charges that he under-reported his assets to tax authorities. At a hearing last week the case was adjourned until March because of Tinkov’s ill health.

>>> After Hours Summary: ROKU +4.8% rises as HBO Max launch on Roku platform is

After Hours Summary: ROKU +4.8% rises as HBO Max launch on Roku platform is finally official; LEN +3.4% moves higher on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: BLBD +13.7%, LEN +3.4%

Companies trading higher in after hours in reaction to news: EOLS +17.2% (EOLS provides update on ITC ruling; Jeuveau sales and marketing continue under bond), MGNX +16.9% (receives FDA approval for MARGENZA for HER2-positive breast cancer), SWBI +5.6% (authorizes $50 mln stock repurchase plan), MGTX +5% (to present clinical update for AAV-hAQP1), ROKU +4.8% (HBO Max to launch on Roku platform on Dec 17), NRZ +4.2% (increases dividend), NXST +1.8% (to acquire BestReviews from TPCO for $160 mln), SSNC +1.3% (to acquire Millennium Consulting Services and Millennium Seminar Services), CDLX +1% (announces multi-year contract renewal with Lloyds Bank), PVG +0.9% (reports discovery at the Hanging Glacier Zone), T +0.7% (HBO Max to launch on Roku platform on Dec 17), ESGC +0.3% (stock offering), TPCO +0.2% (to sell BestReviews to NXST for $160 mln), AMGN +0.2% (submits NDA for sotorasib for advanced or metastatic NSCLC; also increases dividend), IBM +0.2% (elects CEO Arvind Krishna as Chairman), TSN +0.2% (to temporarily idle production at Columbus Junction plant), OEC +0.1% (completes multi-year upgrade to China facility)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: ABM -5.8%, MLHR -0.2%

Companies trading lower in after hours in reaction to news: RRD -7.7% (says it's not currently engaged in discussions to sell its printing and packaging business in Asia Pacific), LQDA -3.3% (files for $200 mln mixed securities shelf offering), DMYT -3.1% (stock offering), IIIV -2.2% (stock offering), UCTT -1.8% (to acquire Ham-Let), LXRX -1% (enters into collaboration with AC Bioscience), PFE -0.4% (delivers results of Phase 3 trial for its COVID-19 vaccine to Brazilian health regulator Anvisa, according to Reuters), SPGI -0.1% (SPGI and INFO announce divisional structure of combined company), ABBV -0.1% (EOLS provides update on ITC ruling; Jeuveau sales and marketing continue under bond)

>>> US Close Dow -0.15% S&P +0.18% Nasdaq +0.50% Russell -0.36%

Closing Stock Market Summary

The S&P 500 (+0.2%) edged higher on Wednesday, as investors were content to hear that a stimulus deal is close to being reached and that the Fed remained committed to its dovish monetary policy framework. The Nasdaq Composite (+0.5%) closed at a record high, while the Dow Jones Industrial Average (-0.2%) and Russell 2000 (-0.4%) closed lower. 

The consumer discretionary (+1.1%) and information technology (+0.7%) sectors led the market higher, but the broader market was generally mixed as investors had largely anticipated these events during yesterday's rally. The utilities (-1.2%), industrials (-0.6%), energy (-0.4%), and materials (-0.3%) sectors closed lower. 

Specifically, the Fed kept rates near zero as expected and signalized they will remain there through 2023, increased its forecast for 2021 GDP growth to 4.2% from 4.0%, and said it will continue to purchase at least $120 billion of Treasury and mortgage-backed securities per month until substantial progress has been made with respect to employment and inflation.

The "extraordinarily accommodative" monetary policy, to quote Fed Chair Powell, should reassure the market in the 2021 recovery narrative, especially since the central bank expects any vaccine-induced inflation to be short-lived. Additional fiscal support is still needed, but the wait could soon be over before week's end. 

Reports indicated that congressional leadership is close to reaching a $900 billion stimulus deal that includes direct paychecks, enhanced unemployment benefits, small business relief, and funding for the paycheck protection program. State and local aid and liability protection are reportedly not included.

The prior bipartisan proposal didn't mention direct payments to households, so that inclusion in this potential deal had a positive effect on shares of Amazon (AMZN 3240.96, +75.84, +2.4%) and Shopify (SHOP 1157.31, +83.21, +7.8%). On a related note, total retail sales declined 1.1% m/m in November (Briefing.com consensus -0.2%) on top of a downwardly revised 0.1% decline (from +0.3%) in October.

U.S. Treasuries finished near their flat lines in a tight-ranged session that supported the view that the market wasn't surprised by the stimulus update or the Fed. The 2-yr yield was flat at 0.12%, and the 10-yr yield was flat at 0.92%. The U.S. Dollar Index decreased 0.2% to 90.32. WTI crude futures increased 0.5%, or $0.24, to $47.83/bbl.

Reviewing Wednesday's economic data:

  • Total retail sales declined 1.1% m/m in November (consensus -0.2%) on top of a downwardly revised 0.1% decline (from +0.3%) in October. Retail sales, excluding autos, declined 0.9% (consensus +0.1%) after declining a downwardly revised 0.1% (from +0.2%) in October.
    • The key takeaway from the report was that the sales declines were broad based. Building materials (+1.1%), food and beverage stores (+1.6%), and nonstore retailers (+0.2%) were the only major categories that saw m/m increases.
  • The NAHB Housing Market Index decreased to two points to 86 in December (Briefing.com consensus 88).
  • Business inventories increased 0.7% in October (consensus 0.6%) following an upwardly revised 0.8% increase in October (from 0.7%).
  • The preliminary IHS Markit Manufacturing PMI for December decreased to 56.5 from 56.7 in November, while the Services PMI decreased to 55.3 from 58.4 in November.
  • The weekly MBA Mortgage Applications Index increased 1.1% following a 1.2% decline in the prior week. 

Looking ahead, investors will receive weekly Initial and Continuing Claims, Housing Starts and Building Permits for November, and the Philadelphia Fed Index for December on Thursday.

  • Nasdaq Composite +41.1% YTD
  • Russell 2000 +17.0% YTD
  • S&P 500 +14.6% YTD
  • Dow Jones Industrial Average +5.7% YTD