December 3, 2024

The market started the new month of December with a day of trading similar to the earlier type of method that began the rally months ago, namely of the large technology stocks leading the way as the broader market lagged to a certain extent.

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For instance, after a briefly higher start, the Dow went negative and remained there for the rest of the session with a closing decline of 128 to 44,782 led by selling in AMGN, CAT, GS, JPM and HON.

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As mentioned above, the S&P did nicely and ended at a new record high with a 15 point advance to 6047 led by the traditional leaders as AAPL, and how many times does this one get downgraded, making a new all-time high of its own. This was its 54th best ever level attained this year.

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The real upside hero was the Nasdaq with a 185 point upside surge to a new record of 19,403 as in addition to AAPL, TSLA also closed at its best ever level as well, and this meant that the NDX did better than the larger composite index with META and MSFT contributing nicely as well.

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And in another example of the old-time predominance of the technology leaders, the Russell 2000 Index of small stocks did nothing with a 1 point loss to 2434, although it is getting closer to a new record on its own due to its strong 10.8% November advance.

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And the VIX keeps sliding lower to a support level with a 13.34 level and let’s see if it can hold the 13 area from which it has bounced in the past.

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SMCI, which has been on an AI-driven roller coaster, soared 29% to lead the market. This follows allegations of misconduct and the resignation of its public auditor, the maker of servers used in artificial-intelligence technology said an investigation found no evidence of misconduct by its management or by the company’s board. It also said that it doesn’t expect to restate its past financials and that it will find a new chief financial officer, appoint a general counsel and make other moves to strengthen its governance. This one has had a range of 123 earlier in the year to 17 in mid-November and ended at 42 yesterday for quite a journey.

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And how about that pathetic INTC, which initially gained after the chip company said C.E.O. Pat Gelsinger got pushed out and stepped down from the board. The company said it is looking for a replacement, and its chair said it’s “committed to restoring investor confidence.” It fell from a gain up to 25.48 The company recently got kicked out of the Dow and replaced by NVDA which has skyrocketed in the frenzy around AI.

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STLA skidded following the C.E.O. departure who stepped down after nearly four years in the top spot of the automaker, which owns car brands like Jeep, Citroën and Ram, amid an ongoing struggle with slumping sales and an inventory backlog at dealerships. The world’s fourth-largest automaker’s stock fell 6.3% in Milan.

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The majority of stocks in the S&P likewise fell despite the record high in the index itself, including California utility PG&E. It dropped 5% after saying it would sell $2.4 billion of stock and preferred shares to raise cash.

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Retailers were mixed amid what is expected to be the best Cyber Monday on record and coming off Black Friday. TGT, which recently gave a disappointing forecast for the holiday season fell while WMT barely rose.

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The stock market largely took the new President’s latest threat on tariffs in stride. The president-elect on Saturday threatened 100% tariffs against a group of developing economies if they act to undermine the U.S. dollar. He said he wants the group, headlined by Brazil, Russia, India and China, to promise it won’t create a new currency or otherwise try to undercut the U.S. dollar.

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The dollar has long been the currency of choice for global trade. Speculation has also been around a long time that other currencies could knock it off its mantle, but no contender has come close.

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The U.S. dollar’s value rose Monday against several other currencies, but one of its strongest moves likely had less to do with the tariff threats. The euro fell amid a political battle in Paris over the French government’s budget. The euro sank 0.7% against the U.S. dollar and broke below $1.05.

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In the bond market, Treasury yields gave up early gains to hold relatively steady. The yield on the 10-year Treasury climbed above 4.23% during the morning before falling back to 4.19%. That was just above its level of 4.18% late Friday.

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A report in the morning showed the U.S. manufacturing sector contracted again last month, but not by as much as economists expected.

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In financial markets abroad, Chinese stocks led gains worldwide as monthly surveys showed improving conditions for manufacturing, partly driven by a surge in orders ahead of the new inauguration next month.

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Both official and private sector surveys of factory managers showed strong new orders and export orders, possibly partly linked to efforts by importers in the U.S. to beat the potential tariff hikes.

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Indexes rose 0.7% in Hong Kong and 1.1% in Shanghai.

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Earnings this week will see: today – ZS lower and tonight - BOX, OKTA, Dow component CRM; Wednesday – CPB, DLTR; Thursday – DLTR, ULTA; Friday – KIRK.

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Economic reports will have: yesterday – October construction spending was higher by 0.5%; today - October JOLTS job openings report later this morning; Wednesday – October durable goods orders, October factory orders; Thursday – October trade balance, weekly jobless claims; Friday – November jobs report for which the estimate is 190,000 compared to the prior month’s 12,000 and an unemployment rate of 4.2%, initial U. of Michigan Consumer Sentiment Survey for December.