Dj Diamondback Energy Price Target Maintained With A $190.00/Share By Wolfe Research

The S&P 500 Index today is down -0.73%, the Dow Jones Industrials Index is down -0.31%, and the Nasdaq 100 Index is down -1.22%. March E-mini S&P futures (ESH25) are down -0.71%, and March E-mini Nasdaq futures (NQH25) are down -1.21%.

Stocks today are moderately lower, weighed down by higher bond yields as the 10-year T-note yield is up +1.0 bp at 4.593%, modestly below Thursday’s 7-month high. Weakness in megacap technology stocks today is also pressuring the overall market. On the positive side, energy stocks are climbing today with the price of WTI crude oil up more than +1%.

The US Nov trade deficit widened to -$102.9 billion from -$98.3 billion in Oct, a larger deficit than expectations of -$101.2 billion, a negative development for Q4 GDP and bearish for stocks.

Strength in Asian equity markets is supportive of US stocks. China’s Shanghai Composite Stock Index rose to a 2-week high today on the prospects of additional stimulus to bolster its economy. Japan’s Nikkei Stock index rallied to a 5-1/4 month high today, led by strength in exporters as the yen weakened to a 5-month low against the dollar. Also, better-than-expected economic news on retail sales and industrial production boosted Japanese stocks.

The markets are discounting the chances at 11% for a -25 bp rate cut at the January 28-29 FOMC meeting.

Overseas stock markets today are higher. The Euro Stoxx 50 rose to a 1-week high and is up +0.68%. China’s Shanghai Composite Index climbed to a 2-week high and closed up +0.06%. Japan’s Nikkei Stock 225 rallied to a 5-1/4 month high and closed up +1.80%.

Interest Rates

March 10-year T-notes (ZNH25) today are down -3 ticks. The 10-year T-note yield is up +1.0 bp to 4.593%. Mar T-notes today are moderately lower and are under pressure from carryover weakness in European and Japanese government bonds. 10-year German bunds fell to a 1-1/4 month low, 10-year UK Gilts fell to a 1-week low, and 10-year Japanese JGB bonds dropped to a 13-year low. T-notes are also weighed down on the concern that President-elect Trump’s policy agenda may spark growth and inflation and potentially worsen the US fiscal backdrop.

European government bond yields today are moving higher. The 10-year German bund yield climbed to a 1-1/4 month high of 2.403% and is up +5.0 bp to 2.373%. The 10-year UK gilt yield rose to a 1-week high of 4.645% and is up +3.8 bp to 4.614%.

Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its January 30 policy meeting and at 12% for a -50 bp rate cut at that meeting.

US Stock Movers

Tesla is down more than -2% on reports that rental car company Hertz is so desperate to shed its inventory of Tesla cars that it is aggressively sending cheap buyout options to rental customers.

Netflix is down more than -2% on less-than-favorable reviews for the company’s new “Squid Game Season 2” season released Thursday.

Mega-cap technology stocks are moving lower today and are weighing on the broader market. Nvidia is down more than -2%. Also, Amazon.com , Microsoft , Alphabet , and Meta Platforms are down more than -1%.

Crowdstrike Holdings is down more than -1% on signs of insider selling after an SEC filing showed CEO Kurtz sold $6.5 million of shares on Monday.

Broadcom is down more than -1% on signs of insider selling after an SEC filing showed CFO Spears sold $2.89 million of shares last Friday.

KKR & Co is down more than -1% after the Fly reported the company, along with Bain Capital, each offered over $5 billion for Japan’s Seven & I’s non-core assets.

Fastenal is down -0.9% after announcing that CFO Lweis will resign in April.

Lamb Weston Holdings is up more than +2% to lead gainers in the S&P 500 after an amended 13D regulatory filing showed Jana Partners LLC reported a holding in the company.

Energy producers and energy service providers are moving higher today, with the price of WTI crude oil rising more than +1%. Chevron is up more than +1% to lead gainers in the Dow Jones Industrials. Also, Occidental Petroleum , Haliburton , Exxon Mobil , Schlumberger , Devon Energy , and ConocoPhillips are up more than+1%. In addition, Diamondback Energy is up +0.87% to lead gainers in the Nasdaq 100.

VeriSign is up more than +1% after Warren Buffet’s Berkshire Hathaway disclosed buying $28.5 million worth of the stock in 3 sessions to Tuesday.

Progyny is up more than +12% on signs of insider buying after an SEC filing showed Executive Chairman Schlanger bought $2.2 million of shares on Thursday.

Amedisys is up more than +4% after the company and UnitedHealth Group gave themselves more time for UnitedHealth Group to complete the $3.3 billion deal to purchase the company.

Tencent Music Entertainment Group ADRs are up more than +3% after 86Research upgraded their recommendation on the ADRs to buy from hold with a price target of $14.

Earnings Reports (12/27/2024)

Daily Journal Corp (DJCO), Dakota Gold Corp (DC), Immersion Corp (IMMR).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.

• Stock Index Futures Slip on Pressure from Rising Bond Yields
• Stocks Slip Before the Open as Bond Yields March Higher, U.S. Jobless Claims Data in Focus
• Stock Index Futures Gain in Thin Pre-Christmas Trade
• Stocks Set for Muted Open as Bond Yields Climb, U.S. Economic Data in Focus

The broad market exchange-traded fund SPDR S&P 500 ETF Trust was up 0.7% and the actively traded Invesco QQQ Trust advanced 0.8% in Thursday's premarket activity, as investors digested the US Federal Reserve's comments about toning down rate cuts next year ahead of economic reports due later in the day.

US stock futures were also higher, with S&P 500 Index futures up 0.7%, Dow Jones Industrial Average futures advancing 0.6%, and Nasdaq futures gaining 0.7% before the start of regular trading.

Reports releasing at 8.30 am ET include the Q3 gross domestic product index, the jobless claims report, the Philadelphia Fed Manufacturing Index, and the revised Q3 corporate profit.

The existing home sales report will be released at 10 am ET, followed by the EIA Natural Gas Report at 10:30 am ET.

The Treasury International Capital posts at 4 pm ET, and the Fed balance sheet at 4:30 pm ET.

In premarket activity, bitcoin was up by 1.5% and the cryptocurrency fund ProShares Bitcoin Strategy ETF was 1.7% higher.

Power Play:

Consumer

The Consumer Staples Select Sector SPDR Fund was flat, while the Vanguard Consumer Staples Fund was up 2.8%. The iShares US Consumer Staples ETF was inactive, and the Consumer Discretionary Select Sector SPDR Fund gained nearly 1%. The VanEck Retail ETF and the SPDR S&P Retail ETF were inactive.

Lamb Weston Holdings shares were down more than 18% pre-bell after the company reported lower fiscal Q2 results and cut its fiscal 2025 guidance. The company also named Chief Operating Officer Michael J. Smith as president and chief executive.

Winners and Losers:

Energy

The iShares US Energy ETF was inactive, while the Energy Select Sector SPDR Fund was up by 0.6%.

Verde Clean Fuels stock was up nearly 9% before Thursday's opening bell after the company said Diamondback Energy subsidiary Cottonmouth Ventures has agreed to a $50 million equity investment in Verde by buying 12.5 million Verde shares at $4 apiece.

Health Care

The Health Care Select Sector SPDR Fund advanced 0.1%. The Vanguard Health Care Index Fund and the iShares US Healthcare ETF were inactive. The iShares Biotechnology ETF was down 0.5%.

Sangamo Therapeutics stock was up more than 8% premarket after the company entered into a licensing deal granting Astellas Pharma worldwide rights to its neurotropic adeno-associated virus capsid, STAC/BBB, for neurological disease targets.

Technology

Technology Select Sector SPDR Fund advanced nearly 1%, and the iShares US Technology ETF was 0.9% higher, while the iShares Expanded Tech Sector ETF was up 0.8%. Among semiconductor ETFs, SPDR S&P Semiconductor ETF gained 0.9%, while the iShares Semiconductor ETF rose by 0.4%.

Nvidia shares were down more than 2% in recent Thursday premarket activity after the company's supplier SK Hynix was awarded up to $458 million in direct funding from the US Department of Commerce under the CHIPS Incentives Program's Funding Opportunity for Commercial Fabrication Facilities.

Industrial

Industrial Select Sector SPDR Fund advanced 0.4%, the Vanguard Industrials Index Fund was up 0.7%, while the iShares US Industrials ETF (IYJ) was inactive.

Lennox International stock was up nearly 2% before the opening bell after S&P Dow Jones Indices said late Wednesday that the company will replace Catalent (CTLT) in the S&P 500, effective before the opening of trading on Dec. 23.

Financial

Financial Select Sector SPDR Fund advanced 0.6%. Direxion Daily Financial Bull 3X Shares was up 1.8%, while its bearish counterpart Direxion Daily Financial Bear 3X Shares fell by 2.2%.

X Financial shares were up 1% pre-bell Thursday after the company said it has signed a deal with a major stockholder to buy back about 6.3 million American depositary shares representing about 38.1 million Class A shares at $7.67 per ADS for $48.7 million.

Commodities

Front-month US West Texas Intermediate crude oil retreated 0.2% to $70.42 per barrel on the New York Mercantile Exchange. Natural gas gained 3.2% to reach $3.48 per 1 million British Thermal Units. United States Oil Fund increased by 0.5%, while the United States Natural Gas Fund rose by 2.4%.

Gold futures for February retreated 1% to $2,625.70 an ounce on the Comex, while silver futures fell 2.8% to $29.87 an ounce. SPDR Gold Shares advanced 0.6%, while the iShares Silver Trust was down by 0.2%.