Last updated: 4:04PM EST
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Stock indices finished today’s trading session mixed, with the Nasdaq 100 (NDX) and the S&P 500 (SPX) falling by 0.3% and 0.08%, respectively. Meanwhile, the Dow Jones Industrial Average (DJIA) gained 0.16%.
The Utilities sector (XLU) was the session’s laggard, as it lost 1.19%. Conversely, the Energy sector (XLE) was the session’s leader, with a gain of 0.72%. This is likely attributable to OPEC’s revised oil demand forecast (see previous update).
Furthermore, the U.S. 10-Year Treasury yield saw a slight decrease to 4.64%. Similarly, the Two-Year Treasury yield also fell, as it hovers around 5.03%.
Last updated: 2:30PM EST
Stock indices are mixed so far in today’s trading session. Meanwhile, on Monday, the Organization of the Petroleum Exporting Countries (OPEC) raised its oil demand prediction for 2023. The organization now expects oil demand to increase to 2.5 million barrels per day (mbd), slightly higher than the 2.4 mbd it projected in October. However, OPEC maintained its 2024 prediction of 2.2 million barrels per day.
On the supply side, the organization increased its prediction for 2023 non-OPEC growth to 1.8 mbd from 1.7 mbd, while 2024 projections remained mostly unchanged.
Last updated: 12:00PM EST
Stocks are in the red so far in today’s trading as Moody’s downgrade continues to weigh on the market (see below). Nevertheless, as the year draws to a close, Wall Street approaches a pivotal period, traditionally marked by stronger performance in cyclical sectors.
This insight comes from Ned Davis Research, highlighting November as the launchpad for a bullish phase where cyclical stocks typically outperform their defensive counterparts. It’s a trend observed over numerous years, signaling a shift in market dynamics favoring more economically sensitive industries.
In response to this seasonal trend, Ned Davis Research has adjusted its sector strategy, placing a greater emphasis on cyclicals. The firm has upgraded Communication Services (XLC) to an Overweight position, indicating a bullish outlook, while simultaneously downgrading Health Care (XLV) to Underweight.
This strategic reallocation reflects an anticipation of the cyclical sectors’ potential outperformance in the coming months, especially against the backdrop of a year-end rally. Sectors like Technology (XLK) and Consumer Discretionary (XLY) are expected to benefit significantly, in contrast to the predicted underperformance of traditionally defensive sectors such as Consumer Staples (XLP), Utilities (XLU), and Health Care.
Last updated: 9:30AM EST
Stocks opened lower in trading on Monday morning, with the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) down by 0.37%, 0.29%, and 0.16%, respectively, at 9:30 a.m. EST, November 13.
First published: 3:41AM EST
U.S. stock futures were in the red early Monday as Moody’s lowered its U.S. credit rating outlook to Negative from Stable, citing large fiscal deficits and a decline in debt affordability. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) were down 0.37%, 0.30%, and 0.23%, respectively, at 3:38 a.m. EST, November 13.
Moody’s explained that given elevated interest rates and the absence of effective fiscal policy measures to reduce government spending or increase revenues, it expects the country’s fiscal deficits to remain high, significantly impacting debt affordability. Moody’s, which announced the rating downgrade on Friday, also pointed out the continued political polarization within the U.S. Congress. It is worth noting that Moody’s maintained the long-term issuer and senior unsecured ratings of the U.S. at Aaa.
Coming to key earnings this week, major retailers, including Home Depot (HD), Target (TGT), Walmart (WMT), TJX Companies (TJX), and BJ’s Wholesale Club (BJ), are scheduled to announce their quarterly results. In addition, networking company Cisco (CSCO), cybersecurity company Palo Alto (PANW), and Chinese tech giants Alibaba (BABA) and JD.com (JD) will also announce their quarterly performance.
Major economic releases lined up this week include the October Consumer Price Index (CPI) report on Tuesday and the Producer Price Index (PPI) on Wednesday, the October retail sales report on Wednesday, last month’s industrial production data on Thursday, and the October Housing Starts report on Friday.
Elsewhere, European indices started the week on a positive note, with traders awaiting key inputs from the talks between U.S. President Joe Biden and China’s President Xi Jinping at the APEC summit.
Asia-Pacific Markets Ended Mixed on Monday
Major Asia-Pacific indices ended mixed on Monday, ahead of the highly-awaited talks between the U.S. and China.
Hong Kong’s Hang Seng index and China’s Shanghai Composite and Shenzhen Component indices closed 1.30%, 0.25% and 0.10% higher, respectively.
Meanwhile, Japan’s Nikkei rose 0.05%, while Topix was essentially flat at the end of today’s regular trading session. In Australia, the S&P/ASX 200 index fell 0.40%.
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