Big Movers In November 2022
Abiomed (ABMD): Johnson & Johnson agreed to buy the cardiac-device maker for $17 billion in cash.
Lincoln National (LNC): The life insurer unexpectedly took a $634 million impairment charge.
Etsy (ETSY): Strong results and guidance lifted the e-commerce stock.
Lumen Technologies (LUMN): The telecom missed earnings and revenue estimates.
Wynn Resorts (WYNN): The casino operator rose on optimism about Macau reopening.
Catalent (CTLT): The drugmaker missed estimates and cut guidance.
Key Economic Events Last Month
Higher jobless rate spurs Fed policy hopes
Unemployment unexpectedly rose to 3.7% in October. That spurred hopes the Federal Reserve may slow its policy of interest-rate hikes. (4/11)
Housing at a crossroads?
The consumer price index rose 0.4% in October, less than the 0.6% feared by economists. Core inflation was also lower than expected. (10/11)
Housing data beats amid tight supply
Housing starts and building permits were higher than expected in October. (17/11) Existing home sales (18/11) also beat forecasts as a real-estate shortage offsets the drag of higher mortgage rates.
Fed hints at smaller rate hike in December
“A substantial majority” of Fed policymakers wanted to slow interest-rate increases, according to minutes from the November meeting. (23/11)
Key Futures Contracts
| Product Name | Current Month | Expiration | Next Month | 1-Mon% |
|---|---|---|---|---|
| S&P 500 E-Mini (@ES) | ESZ22(Dec) | 16 Dec 2022 | ESH23(Jan) | +5.1% |
| S&P 500 E-Mini Micro (@MES) | MESZ22 (Dec) | 16 Dec 2022 | MESH23 (Jan) | +5.1% |
| Nasdaq-100 E-Mini (@NQ) | NQZ22 (Dec) | 16 Dec 2022 | NQH23 (Jan) | +5.2% |
| Nasdaq-100 E-Mini Micro (@MNQ) | MNQZ22 (Dec) | 16 Dec 2022 | MNQH23 (Jan) | +5.2% |
| Dow Jones E-Mini (@YM) | YMZ22 (Dec) | 16 Dec 2022 | YMH23 (Jan) | +5.6% |
| Dow Jones E-Mini (@MYM) | MYMZ22 (Dec) | 16 Dec 2022 | MYMH23 (Jan) | +5.6% |
Events to Watch This Month
| Date | Event | WhattoWatch |
|---|---|---|
| Wed, 2-Dec | Non-farm payrolls | Will unemployment increase again, potentially reducing the Fed’s hawkish policy? |
| Fri, 9-Dec | Railroad strike deadline | Will Congress intervene to prevent a potentially crippling railroad strike? |
| Tue, 13-Dec | Inflation report | November’s Consumer Price Index (CPI) is due one hour before U.S. markets open. |
| Fed meeting, press conference and projections | Inflation report | Policymakers are expected to slow rate hikes. They will also release projections for economic conditions and future policy. |
| Tues, 20-Dec - Wed, 21-Dec | Housing & consumer data | Housing starts & building permits on 20-Dec. and consumer confidence on 21-Dec. may provide clues on the economy. |
Sector Watch
Materials gained as investors looked for the slower interest-rate hikes and the U.S. dollar weakened.
Industrial stocks rose as Boeing recovered and transports rallied.
Utility stocks rose as lower interest rates boosted the appeal of their dividends.
Energy stocks rose the least as crude oil slid.
Noteworthy Calls & Predictions
Goldman Sachs sees no recession: Economist Jan Hatzius said the U.S. economy has a 65% chance of avoiding a recession because of the strong labor market. Unemployment is still likely to increase as inflation slows, he added.
EconomyYardeni expects more gains: Strategist Ed Yardeni told CNBC the S&P 500 could rally 8% into yearend because of strong consumer spending
StocksEnergy stocks have a historic disconnect from petroleum prices, according to Bespoke Investment. Companies in the sector have held their value despite crude oil sliding. Bespoke attributed the strength to the industry’s strong earnings and a favorable demand environment.
Energy stocksJPMorgan thinks bonds will bounce: Strategists led by Nikolaos Panigirtzoglou expect fixed-income supply to fall by $1.6 trillion in 2023. Higher demand and lower inflation could also help stabilize the market, they added.
BondsTom Lee of Fundstrat expects “fireworks” in the stock market as cooling inflation makes the Fed less hawkish. He predicted the S&P 500 will end the year as high as 4500.
StocksDisclosure
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