- Stocks continued Friday slide. November Non-Manufacturing ISM Index, ongoing tax reform negotiations weighed on sentiment. S&P 500 Index -0.4%, Dow -0.5%, Nasdaq -0.2%.
- Flows out of technology stocks halted, as the sector being the only gainer on the day; telecommunications, utilities lagged.
- Treasuries little changed across the curve. 10-year note yield -1 basis point to 2.36%.
- Market breadth negative on NYSE (1.8:1), Nasdaq (1.8:1) on elevated volume (~106% of 30-day avg.).
- Commodities – WTI crude oil +0.3% to $57.65/bbl., COMEX gold -0.7% to $1269/oz. despite risk-off session.
- November non-manufacturing activity expanded (57.4) but fell from October reading (60.1). New orders, business activity, employment indicator all lower. Seasonal impacts (i.e. hurricanes) cited as notable impact on data.
Overnight & This Morning
- Major U.S. indexes opened lower on the heels of sharp declines in Asia, European weakness.
- Asia stocks drop with China in focus: weak metals prices, fresh comments from regulators reiterating tougher stance on banks, financial markets. Soft Q3 Australia gross domestic product data also weighed. Shanghai Composite -0.3%, Hang Seng -2.1%, Nikkei -2.0%, ASX 200 -0.4%.
- Europe lower across the board, though STOXX Europe 600 (-0.1%) ticking up from session lows. Dax (-0.5%) among largest decliners despite surprise pickup in German factory orders.
- Treasuries higher across the curve. 10-year yield -3 basis points (-0.03%) to 2.33%.
- Commodities – Oil -1.3% to $56.85/bbl., gold +0.2% to $1267/oz., copper (+1.4%) the lone gainer among industrial metals.
- Economic calendar has ADP Employment Survey (+190k vs. +196k expected, details below), Bank of Canada interest rate announcement (no change expected).
- ADP private payrolls increased 190K in November following an unrevised 235K increase in October, largely in line with the 196K consensus. Release highlighted biggest increase in manufacturing jobs this year. Also highlighted risks surrounding employers’ ability to retain skilled workers with labor market tightening and wages increasing. Added only soft spots are industries disrupted by technology like brick-and-mortar retailers. Report typically a non-event for market with focus on official Bureau of Labor Statistics data out on Friday. Street looking for a 200K increase in November nonfarm payrolls following a 261K gain in October that was below the 310K consensus (hurricane-related rebound was softer than expected). Unemployment rate expected to hold steady at 4.1%, the lowest since 2001. (Source: FactSet)
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- MBA Mortgage Applications (Dec 1)
- ADP Employment Change (Nov)
- Nonfarm Productivity (Q3)
- Unit Labor Costs (Q3)
- Germany: Factory Orders (Oct)
- Japan: Buying Foreign Bonds (Dec 1)
- China: Foreign Reserves (Nov)
- Challenger Job Cuts (Nov)
- Weekly Jobless Claims (Dec 2)
- Household Change in Net Worth (Q3)
- Consumer Credit (Oct)
- Germany: Industrial Production (Oct)
- France: Trade Balance (Oct)
- Italy: Unemployment Rate (Q3)
- Bank of Italy: Report on Balance Sheet Aggregates
- Japan: GDP (Q3)
- Japan: Leading Index (Oct)
- Japan: Eco Watchers Survey (Nov)
- China: Trade Balance (Nov)
- China: Imports & Exports (Nov)
- Change in Nonfarm, Private & Manufacturing Payrolls (Nov)
- Unemployment Rate (Nov)
- Average Hourly Earnings (Nov)
- Average Weekly Hours (Nov)
- Labor Force Participation & Underemployment Rates (Nov)
- Wholesale Inventories (Oct)
- Wholesale Trade Sales (Oct)
- Germany: Trade Balance (Oct)
- Germany: Current Account Balance (Oct)
- Germany: Imports & Exports (Oct)
- France: Industrial Production (Oct)
- UK: Industrial Production (Oct)
- UK: Trade Balance (Oct)
- UK: Nat’l Institute of Economic & Social Research GDP Estimate (Nov)
- BOE: Inflation Next 12 Months
- China: CPI & PPI (Nov)