What you need to know…
The S&P 500 Index ($SPX) (SPY) this morning is up +1.22%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +1.39%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.89%.
Stock indexes today are moderately higher after Pfizer said it expects its Covid vaccine to hold up to the omicron variant, easing pandemic concerns. Stocks also found support on signs of strength in the U.S. labor market after weekly U.S. jobless claims rose less than expected and remained near a 52-year low.
U.S. stock indexes also garnered support after House Democrats this morning released a bipartisan short-term spending bill that would fund the U.S. government through February 18. The bill must pass both the House and Senate by midnight Friday to avert a shutdown. In a positive sign for its passing, Alabama Senator Shelby, the top Appropriations Committee Republican, endorsed the House proposal.
Today’s weekly U.S. jobless claims data was bullish for stocks. U.S. weekly initial unemployment claims rose +28,000 to 222,000, showing a stronger labor market than expectations of 240,000. Weekly continuing claims fell -107,000 to a 20-month low of 1.956 million, showing a stronger labor market than expectations of 2.003 million.
Today’s stock movers…
Cruise line operators and airline stocks are climbing today as micron variant concerns eased after Pfizer said it expects its Covid vaccine to hold up to the omicron variant. Norwegian Cruise Line Holdings (NCLH), Royal Caribbean Cruises (RCL), and Carnival (CCL) are up more than -4%. Delta Air Lines (DAL) is up more than +4%, and United Airlines Holdings (UAL), and Southwest Airlines (LUV) are up more than +3%, and American Airlines Group (AAL) is up more than +2%.
Hotel and gaming stocks are stronger today as omicron variant concerns ease. Wynn Resorts (WYNN) is up more than +5%, Caesars Entertainment (CZR), MGM Resorts International (MGM), and Hilton Worldwide Holdings (HLT) are up more than +4%, and, Las Vegas Sands (LVS) and Marriott International (MAR) are up more than +3%.
Kroger (KR) is up more than +8% today to lead gainers in the S&P 500 after it reported Q3 adjusted EPS of 78 cents, stronger than the consensus of 71 cents, and raised its full-year 2022 adjusted EPS forecast to $3.40-3.50, above the consensus of $3.35.
Boeing (BA) is up more than +4% today to lead gainers in the Dow Jones Industrials after China’s civil aviation regulator issued an airworthiness directive for Boeing’s 737 Max jet, which clears the way for the plane to resume flights in China after being grounded for almost three years.
Okta (OKTA) is up more than +9% to lead gainers in the Nasdaq 100 after the company reported Q3 revenue of $350.7 million, above the consensus of $327.1 million, and raised its full-year revenue forecast to $1.28 billion from an earlier estimate of $1.24 billion to $1.25 billion.
Apple (AAPL) is down more than -2% today to lead losers in the Dow Jones Industrial and Nasdaq 100 after Bloomberg reported that Apple told its component makers that demand for the iPhone 13 lineup has weakened.
Across the markets…
March T-notes (ZNH22) this morning are down -3 ticks, and the 10-year T-note yield is up +3.0 bp at 1.434%. A rally in stocks today has curbed the safe-haven demand for T-motes. Also, today’s weekly U.S. jobless claims data signaled strength in the U.S. labor market that is bearish for T-note prices. Losses were limited by carry-over support from a rally in 10-year German bunds. The 10-year bund yield fell to a 3-month low today of -0.394% after Germany imposed strict curbs that will only allow people who are vaccinated or recovered from Covid into restaurants, theaters, and non-essential stores.
The dollar index (DXY00) this morning is down -0.14%. A slight easing of concern about the omicron variant has curbed some safe-haven demand for the dollar today after Pfizer said it expects its Covid vaccine to hold up to the omicron variant. Losses in the dollar were limited by signs of strength in the U.S. labor market after weekly U.S initial unemployment claims rose less than expected.
EUR/USD (^EURUSD) is up by +0.22%. The euro is stronger today as signs of rising European price pressures are hawkish for ECB policy. Eurozone Oct PPI rose a record +5.4% m/m and +21.9% y/y, (data from 1981) stronger than expectations of +3.8% m/m and +19.0% y/y. Strength in the European labor market is also supportive for EUR/USD after the Eurozone Oct unemployment rate fell -0.1 to a 19-month low of 7.3%, right on expectations. Gains in EUR/USD were limited after the 10-year German bund yield today fell to a 3-month low, which weakens the euro’s interest rate differentials.
USD/JPY (^USDJPY) is up +0.10%. A slight easing of omicron variant concerns has sparked gains in U.S. stocks this morning and reduced the safe-haven demand for the yen. The yen was also under pressure after today’s data showed the Japan Nov consumer confidence index was unchanged at 39.2, weaker than expectations of an increase to 40.3.
February gold (GCG22) this morning is down -13.8 (-0.77%), and March silver (SIH22) is up +0.031 (+0.14%). Precious metals prices this morning are mixed, with gold dropping to a 4-week low. A slight easing of pandemic concerns today sparked a rally in stocks that is negative for the safe-haven demand of precious metals. Gold prices are also under pressure today from higher T-note yields. A weaker dollar today is supportive of metals prices.
