Lennar (LEN) Beats Stock Market Upswing: What Investors Need to Know

December S&P 500 E-Mini futures (ESZ24) are trending down -0.19% this morning as investors held back from making big bets ahead of a crucial U.S. inflation report that could influence the Federal Reserve’s interest rate path.

In yesterday’s trading session, Wall Street’s three main equity benchmarks ended lower. Mosaic slumped over -7% and was the top percentage loser on the S&P 500 after the company reported weaker-than-expected Q3 results. Also, homebuilder stocks lost ground after the benchmark 10-year Treasury yield jumped, with Lennar and D.R. Horton falling more than -3%. In addition, Novavax slid over -6% after cutting its full-year revenue guidance. On the bullish side, Tyson Foods climbed more than +6% and was the top percentage gainer on the S&P 500 after the food giant reported stronger-than-expected FQ4 results. Also, Honeywell International rose over +3% and was the top percentage gainer on the Dow after activist investor Elliott Investment Management built a stake of more than $5 billion and called for a breakup of the industrial giant.

“We are on watch for potential profit taking, consolidation, or even correction for U.S. equities heading into the first quarter of the new year. Upward momentum remains strong and investor sentiment favorable, but stocks are once again overbought/extended across multiple timeframes,” said Dan Wantrobski at Janney Montgomery Scott.

Richmond Fed President Thomas Barkin stated Tuesday that the U.S. economy is “in a good place.” “The Fed is in a position to respond appropriately regardless of how the economy evolves,” he added. Also, Minneapolis Fed President Neel Kashkari said that the central bank might pause its rate-cutting cycle in December if inflation surprises to the upside. “In my judgment, we are still at a modestly contractionary stance, but ultimately the economy will guide us, in terms of how far we are needing to go” in cutting rates, Kashkari said.

In other news, the Federal Reserve’s Senior Loan Officer Opinion Survey, released on Tuesday, showed that U.S. banks saw weaker demand for a key category of business loans in the third quarter, while demand for consumer credit card and auto loans also softened.

Meanwhile, U.S. rate futures have priced in a 65.8% chance of a 25 basis point rate cut and a 34.2% chance of no rate change at the next FOMC meeting in December.

On the earnings front, notable companies like Cisco , Tower Semiconductor , and CyberArk Software are scheduled to release their quarterly results today.

Today, all eyes are focused on the U.S. consumer inflation report, which is set to be released in a couple of hours. Economists, on average, forecast that the U.S. October CPI will come in at +0.2% m/m and +2.6% y/y, compared to the previous numbers of +0.2% m/m and +2.4% y/y.

The U.S. Core CPI will also be closely watched today. Economists anticipate the core CPI to be +0.3% m/m and +3.3% y/y in October, matching September’s figures.

A survey conducted by 22V Research showed that 55% of investors expect the market response to the consumer inflation report to be “mixed/negligible,” 31% anticipate a “risk-off” reaction, and only 14% expect “risk-on.”

In addition, market participants will be looking toward a series of speeches from Fed officials Kashkari, Williams, Logan, Schmid, and Musalem.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.414%, down -0.43%.

The Euro Stoxx 50 futures are up +0.13% this morning as investors exercised caution in anticipation of key U.S. inflation data. Technology and automobile stocks lost ground on Wednesday, while energy and mining stocks outperformed. Meanwhile, worries about the impact of Donald Trump’s policies, China’s economic outlook, and the political situation in Germany kept sentiment subdued. Bloomberg reported on Tuesday that German Chancellor Olaf Scholz’s Social Democrats and opposition lawmakers have agreed to hold an early federal election on February 23rd. Market participants are now awaiting a preliminary reading of Eurozone third-quarter GDP as well as the minutes from the European Central Bank’s October policy meeting, set for release on Thursday. In corporate news, Just Eat Takeaway.com N.V. (JET.LN) soared over +21% after announcing a deal to sell its U.S. unit Grubhub to Wonder for $650 million. Also, Siemens Energy Ag surged more than +14% after the utility sector supplier raised its mid-term financial targets.

The European economic data slate is mainly empty on Wednesday.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.51%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -1.66%.

China’s Shanghai Composite Index closed higher today, recouping losses from earlier in the session. Gains in telecom and media stocks led the overall market higher on Wednesday. The mood improved as Nomura upgraded its China growth forecast, with the Q4 projection adjusted to 4.9% from 4.4% and the annual estimate revised to 4.8% from 4.7%, citing some signs of improving economic activity. Investors also continued to evaluate the economic outlook in China amid weak economic data and a disappointing stimulus package. Meanwhile, Bloomberg reported on Tuesday that China’s securities regulator has increased its interactions with global banks, shifting from quarterly discussions to sometimes weekly or ad-hoc queries to gather perspectives on recent stimulus measures. The initiative to collect data and feedback indicates Beijing’s intensified urgency to rejuvenate the economy. Still, investors remained anxious after reports that U.S. President-elect Donald Trump will nominate China hawks such as Marco Rubio, Mike Waltz, and Kristi Noem to key cabinet positions. In corporate news, OMAT Advanced Materials Guangdong Co. climbed over +8% amid plans to invest 322 million yuan in building an industrial park in Wujiang District, Shaoguan City, China.

Japan’s Nikkei 225 Stock Index closed lower today, tracking overnight losses on Wall Street, while investors also took profits following last week’s rally. Automobile and pharmaceutical stocks led the declines on Wednesday. Data released by the Bank of Japan on Wednesday showed that Japan’s wholesale inflation rose in October at the fastest annual rate in over a year, as recent declines in the yen increased import costs for some goods, complicating the BOJ’s decision on the timing of interest rate hikes. Meanwhile, the yen depreciated past 155 per dollar on Wednesday for the first time since July, increasing the likelihood that Japan will intervene in the currency market to attempt to slow the decline. Investors also continued to assess the impact of the nation’s 10 trillion yen ($65 billion) stimulus plan for AI chipmakers, which is designed to bolster critical supply chains amid ongoing Sino-American trade tensions. In corporate news, Nexon tumbled over -17% after the game maker lowered its full-year net profit guidance. At the same time, Seven & I Holdings climbed more than +11% after the retail giant said it had received a buyout offer from a member of its founding Ito family. Also, Tokyo Electron gained nearly +1% after the chip-making equipment maker boosted its annual operating profit forecast. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +7.41% to 24.79.

The Japanese October PPI has been reported at +0.2% m/m and +3.4% y/y, stronger than expectations of 0.0% m/m and +2.9% y/y.

Pre-Market U.S. Stock Movers

Rocket Lab USA soared about +26% in pre-market trading after the company posted better-than-expected Q3 results and issued above-consensus Q4 revenue guidance.

Rivian Automotive surged over +13% in pre-market trading after it formally announced an agreement with Volkswagen Group to create a new joint venture.

Spotify climbed more than +6% in pre-market trading after the music-streaming platform provided a strong Q4 operating income forecast and said it expects to add more users and premium listeners.

CAVA Group advanced over +16% in pre-market trading after posting upbeat Q3 results and raising its annual same restaurant sales growth guidance.

Today’s U.S. Earnings Spotlight: Wednesday - November 13th

Cisco (CSCO), Nu Holdings (NU), Suncor Energy (SU), Tetra Tech (TTEK), Cyberark Software (CYBR), StandardAero (SARO), Loar Holdings LLC (LOAR), Energy of Minas Gerais (CIG), Tower (TSEM), Ultrapar Participacoes (UGP), Alvotech (ALVO), Helmerich Payne (HP), J & J Snack Foods (JJSF), Griffon (GFF), HudBay Minerals (HBM), Kulicke&Soffa (KLIC), Dlocal (DLO), Ibotta (IBTA), Grupo Aval (AVAL), Hillenbrand (HI), Nextnav Acquisition (NN), Tarsus (TARS), Enlight Energy (ENLT), Harrow Health (HROW), Arcos Dorados (ARCO), BrightView Holdings (BV), Callaway Golf (MODG), Sonos (SONO), ARS Pharmaceuticals (SPRY), Dole (DOLE), Afya (AFYA), Paysafe (PSFE), Digi (DGII), Bitfarms (BITF), Kayne Anderson BDC (KBDC), Beazer Homes USA (BZH), Liquidia Technologies (LQDA), Miller Industries (MLR), Capricor Therapeutics (CAPR), Riskified (RSKD).

On the date of publication, Oleksandr Pylypenko 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.

December S&P 500 E-Mini futures (ESZ24) are trending down -0.09% this morning as investors held back from making big bets ahead of a crucial U.S. inflation report that could influence the Federal Reserve’s interest rate path.

In yesterday’s trading session, Wall Street’s three main equity benchmarks ended lower. Mosaic slumped over -7% and was the top percentage loser on the S&P 500 after the company reported weaker-than-expected Q3 results. Also, homebuilder stocks lost ground after the benchmark 10-year Treasury yield jumped, with Lennar and D.R. Horton falling more than -3%. In addition, Novavax slid over -6% after cutting its full-year revenue guidance. On the bullish side, Tyson Foods climbed more than +6% and was the top percentage gainer on the S&P 500 after the food giant reported stronger-than-expected FQ4 results. Also, Honeywell International rose over +3% and was the top percentage gainer on the Dow after activist investor Elliott Investment Management built a stake of more than $5 billion and called for a breakup of the industrial giant.

“We are on watch for potential profit taking, consolidation, or even correction for U.S. equities heading into the first quarter of the new year. Upward momentum remains strong and investor sentiment favorable, but stocks are once again overbought/extended across multiple timeframes,” said Dan Wantrobski at Janney Montgomery Scott.

Richmond Fed President Thomas Barkin stated Tuesday that the U.S. economy is “in a good place.” “The Fed is in a position to respond appropriately regardless of how the economy evolves,” he added. Also, Minneapolis Fed President Neel Kashkari said that the central bank might pause its rate-cutting cycle in December if inflation surprises to the upside. “In my judgment, we are still at a modestly contractionary stance, but ultimately the economy will guide us, in terms of how far we are needing to go” in cutting rates, Kashkari said.

In other news, the Federal Reserve’s Senior Loan Officer Opinion Survey, released on Tuesday, showed that U.S. banks saw weaker demand for a key category of business loans in the third quarter, while demand for consumer credit card and auto loans also softened.

Meanwhile, U.S. rate futures have priced in a 65.8% chance of a 25 basis point rate cut and a 34.2% chance of no rate change at the next FOMC meeting in December.

On the earnings front, notable companies like Cisco , Tower Semiconductor , and CyberArk Software are scheduled to release their quarterly results today.

Today, all eyes are focused on the U.S. consumer inflation report, which is set to be released in a couple of hours. Economists, on average, forecast that the U.S. October CPI will come in at +0.2% m/m and +2.6% y/y, compared to the previous numbers of +0.2% m/m and +2.4% y/y.

The U.S. Core CPI will also be closely watched today. Economists anticipate the core CPI to be +0.3% m/m and +3.3% y/y in October, matching September’s figures.

A survey conducted by 22V Research showed that 55% of investors expect the market response to the consumer inflation report to be “mixed/negligible,” 31% anticipate a “risk-off” reaction, and only 14% expect “risk-on.”

In addition, market participants will be looking toward a series of speeches from Fed officials Kashkari, Williams, Logan, Schmid, and Musalem.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.414%, down -0.43%.

The Euro Stoxx 50 futures are up +0.13% this morning as investors exercised caution in anticipation of key U.S. inflation data. Technology and automobile stocks lost ground on Wednesday, while energy and mining stocks outperformed. Meanwhile, worries about the impact of Donald Trump’s policies, China’s economic outlook, and the political situation in Germany kept sentiment subdued. Bloomberg reported on Tuesday that German Chancellor Olaf Scholz’s Social Democrats and opposition lawmakers have agreed to hold an early federal election on February 23rd. Market participants are now awaiting a preliminary reading of Eurozone third-quarter GDP as well as the minutes from the European Central Bank’s October policy meeting, set for release on Thursday. In corporate news, Just Eat Takeaway.com N.V. (JET.LN) soared over +21% after announcing a deal to sell its U.S. unit Grubhub to Wonder for $650 million. Also, Siemens Energy Ag surged more than +14% after the utility sector supplier raised its mid-term financial targets.

The European economic data slate is mainly empty on Wednesday.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.51%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -1.66%.

China’s Shanghai Composite Index closed higher today, recouping losses from earlier in the session. Gains in telecom and media stocks led the overall market higher on Wednesday. The mood improved as Nomura upgraded its China growth forecast, with the Q4 projection adjusted to 4.9% from 4.4% and the annual estimate revised to 4.8% from 4.7%, citing some signs of improving economic activity. Investors also continued to evaluate the economic outlook in China amid weak economic data and a disappointing stimulus package. Meanwhile, Bloomberg reported on Tuesday that China’s securities regulator has increased its interactions with global banks, shifting from quarterly discussions to sometimes weekly or ad-hoc queries to gather perspectives on recent stimulus measures. The initiative to collect data and feedback indicates Beijing’s intensified urgency to rejuvenate the economy. Still, investors remained anxious after reports that U.S. President-elect Donald Trump will nominate China hawks such as Marco Rubio, Mike Waltz, and Kristi Noem to key cabinet positions. In corporate news, OMAT Advanced Materials Guangdong Co. climbed over +8% amid plans to invest 322 million yuan in building an industrial park in Wujiang District, Shaoguan City, China.

Japan’s Nikkei 225 Stock Index closed lower today, tracking overnight losses on Wall Street, while investors also took profits following last week’s rally. Automobile and pharmaceutical stocks led the declines on Wednesday. Data released by the Bank of Japan on Wednesday showed that Japan’s wholesale inflation rose in October at the fastest annual rate in over a year, as recent declines in the yen increased import costs for some goods, complicating the BOJ’s decision on the timing of interest rate hikes. Meanwhile, the yen depreciated past 155 per dollar on Wednesday for the first time since July, increasing the likelihood that Japan will intervene in the currency market to attempt to slow the decline. Investors also continued to assess the impact of the nation’s 10 trillion yen ($65 billion) stimulus plan for AI chipmakers, which is designed to bolster critical supply chains amid ongoing Sino-American trade tensions. In corporate news, Nexon tumbled over -17% after the game maker lowered its full-year net profit guidance. At the same time, Seven & I Holdings climbed more than +11% after the retail giant said it had received a buyout offer from a member of its founding Ito family. Also, Tokyo Electron gained nearly +1% after the chip-making equipment maker boosted its annual operating profit forecast. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +7.41% to 24.79.

The Japanese October PPI has been reported at +0.2% m/m and +3.4% y/y, stronger than expectations of 0.0% m/m and +2.9% y/y.

Pre-Market U.S. Stock Movers

Rocket Lab USA soared about +26% in pre-market trading after the company posted better-than-expected Q3 results and issued above-consensus Q4 revenue guidance.

Spotify climbed more than +6% in pre-market trading after the music-streaming platform provided a strong Q4 operating income forecast and said it expects to add more users and premium listeners.

Today’s U.S. Earnings Spotlight: Wednesday - November 13th

Cisco (CSCO), Nu Holdings (NU), Suncor Energy (SU), Tetra Tech (TTEK), Cyberark Software (CYBR), StandardAero (SARO), Loar Holdings LLC (LOAR), Energy of Minas Gerais (CIG), Tower (TSEM), Ultrapar Participacoes (UGP), Alvotech (ALVO), Helmerich Payne (HP), J & J Snack Foods (JJSF), Griffon (GFF), HudBay Minerals (HBM), Kulicke&Soffa (KLIC), Dlocal (DLO), Ibotta (IBTA), Grupo Aval (AVAL), Hillenbrand (HI), Nextnav Acquisition (NN), Tarsus (TARS), Enlight Energy (ENLT), Harrow Health (HROW), Arcos Dorados (ARCO), BrightView Holdings (BV), Callaway Golf (MODG), Sonos (SONO), ARS Pharmaceuticals (SPRY), Dole (DOLE), Afya (AFYA), Paysafe (PSFE), Digi (DGII), Bitfarms (BITF), Kayne Anderson BDC (KBDC), Beazer Homes USA (BZH), Liquidia Technologies (LQDA), Miller Industries (MLR), Capricor Therapeutics (CAPR), Riskified (RSKD).

On the date of publication, Oleksandr Pylypenko 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.

The S&P 500 Index Tuesday closed down -0.29%, the Dow Jones Industrials Index closed down -0.86%, and the Nasdaq 100 Index closed down -0.17%.

Stock indexes settled moderately lower on Tuesday as they consolidated the past week’s rally to record highs. Higher bond yields Tuesday fueled some profit-taking pressures in stocks following five straight sessions of gains. Also, long liquidation in stocks ahead of Wednesday's US consumer price report weighed on the overall market.

Stocks have rallied sharply over the past week, with the S&P 500, Dow Jones Industrials, and the Nasdaq 100 posting new record highs on speculation President-elect Trump will boost corporate profits through tax cuts and reduced regulation.

Positive Fed comments on Tuesday were bullish for stocks. Richmond Fed President Barkin said the US economy looks "pretty good," and the Fed is in a position to respond however the economy evolves. Also, Minneapolis Fed President Kashkari said only inflation could derail a Fed rate cut in December, and "if we saw inflation surprises to the upside between now and then, that might give us pause."

The markets are looking ahead to Wednesday’s US consumer price report for October, with Oct CPI expected to climb to +2.6% y/y, up from +2.4% y/y in Sep, and core Oct CPI expected to remain unchanged from Sep at +3.3% y/y. Also, Friday’s report on retail sales will be looked at to see if consumer spending is holding up. Oct retail sales are expected to be up +0.3% m/m, and Oct retail sales ex-autos are also expected to be up +0.3% m/m.

Of the 85% of companies in the S&P 500 that have released Q3 earnings so far, 75% surpassed the estimates, slightly below the 3-year average. According to Bloomberg Intelligence, companies in the S&P 500 have reported an average +8.4% y/y increase in quarterly earnings in Q3, more than double the preseason forecast.

The markets are discounting the chances at 62% for a -25 bp rate cut at the December 17-18 FOMC meeting.

Overseas stock markets Tuesday settled lower. The Euro Stoxx 50 tumbled to a 2-month low and closed down -2.25%. China's Shanghai Composite Index closed down -1.39%. Japan's Nikkei Stock 225 closed down -0.40%.

Interest Rates

December 10-year T-notes (ZNZ24) Tuesday closed down by -15.5 ticks. The 10-year T-note yield rose +13.1 bp to 4.435%. T-notes were under pressure Tuesday from carryover weakness in European government bonds. Also, upbeat comments Tuesday from Richmond Fed President Barkin curbed safe-haven demand for T-notes when he said the US economy looks "pretty good." In addition, concerns about inflationary pressures of future policies from President-elect Trump are weighing on T-notes.

European government bond yields Tuesday moved higher. The 10-year German bund yield rebounded from a 1-1/2 week low of 2.299% and finished up +3.6 bp to 2.362%. The 10-year UK gilt yield rose +7.4 bp to 4.499%.

The German Nov ZEW survey expectations of economic growth unexpectedly fell -3.7 to 7.4 versus expectations of an increase to 13.2.

ECB Governing Council member Rehn said disinflation in the Eurozone is "well on track," and the growth outlook "seems to be weakening," and "that strengthens the case for an ECB rate cut in December."

Swaps are discounting the chances at 100% for a -25 bp rate cut by the ECB at its December 12 policy meeting and at 23% for a -50 bp rate cut at the same meeting.

US Stock Movers

Mosaic closed down more than -7% to lead losers in the S&P 500 after reporting Q3 net sales of $2.8 billion, weaker than the consensus of $3.14 billion.

GE Vernova closed down more than -7% after the Financial Times reported that CEO Strazik said the company plans to postpone searching for new offshore turbine orders until market conditions improve.

Home builders retreated Tuesday after the 10-year T-note yield jumped more than +13 bp, which boosts mortgage rates and is negative for housing demand. As a result, PulteGroup , Lennar , DR Horton , and Toll Brothers closed down more than -3%.

Elevance Health closed down more than -2% after the CFO said he sees pressure in Medicaid persisting in 2025 and sees Medicare Advantage margins missing their 2025 targets.

Neurogene closed down more than -43% after a disclosure indicated an emerging serious adverse event in a trial participant for the experimental Rett syndrome drug.

Alnylam Pharmaceuticals closed down more than -3% after Wolfe Research downgraded the stock to underperform from peer perform with a price target of $205.

Knight-Swift Transportation Holdings closed down more than -4% after Citigroup downgraded the stock to sell from neutral with a price target of $56.

Airbnb closed down more than -2% after Phillip Securities downgraded the stock to reduce from neutral with a price target of $120.

Tyson Foods closed up more than +6% to lead gainers in the S&P 500 after reporting Q4 adjusted EPS of 92 cents, stronger than the consensus of 72 cents.

Honeywell International closed up more than +3% to lead gainers in the Dow Jones Industrials and Nasdaq 100 after Elliot Investment Management said it built a $5 billion stake in the company and is calling for a breakup of the company.

Live Nation Entertainment closed up more than +4% after reporting Q3 adjusted operating income of $909.8 million, stronger than the consensus of $856.6 million.

Nvidia closed up more than +2% after Redburn initiated coverage on the stock with a buy recommendation and a price target of $178.

Shopify closed up more than +21% after reporting Q3 revenue of $2.16 billion, better than the consensus of $2.12 billion.

Twilio closed up more than +2% after Wells Fargo Securities upgraded the stock to overweight from equal weight with a price target of $120.

Molson Coors Beverage closed up more than +2% after JPMorgan Chase said the latest data showed improving trends for the company as the latest 4-week trend to November 2 saw dollar takeaway down -1.9%, an improvement of 200 bp over the prior 4-week period.

Earnings Reports (11/13/2024)

Cisco Systems Inc (CSCO), Loar Holdings Inc (LOAR), NU Holdings Ltd/Cayman Islands (NU), Tetra Tech Inc (TTEK).

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.

As the Federal Reserve announced its long-anticipated rate cut, markets are abuzz with the potential impact on the housing sector. PulteGroup Inc. PHM, a leading U.S. homebuilder, finds itself at an intriguing juncture as investors speculate how this policy shift might influence housing demand, construction activity, and ultimately, PulteGroup’s stock performance.

The Federal Reserve announced a quarter-point reduction in its benchmark interest rate yesterday, lowering it to a range of 4.5% to 4.75%. This decision marks the second consecutive rate cut, following a half-point reduction in September, as the Fed aims to stimulate economic growth amid cooling inflation and a moderating labor market.

So far this year, the company’s shares have gained 27.1%, demonstrating impressive resilience amid volatility and mixed industry data. This performance surpasses the Zacks Building Products - Home Builders industry’s 17.5% rise as well as the broader Construction sector's 25.5% increase and the Zacks S&P 500 Composite's 24.7% growth.

PHM’s YTD Share Performance