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Tuesday, December 10

Some of the largest moves among US mega-cap stocks include: Alphabet Inc (GOOG) +4.1%. Alphabet Inc (GOOGL) +4.1%.

Recent economic data releases have highlighted significant developments in major global economies. In the U.S., unit labor costs for Q3 were revised down to an increase of 0.8%, which is below market expectations and indicates a potential easing of inflationary pressures that could influence Federal Reserve policy decisions ahead of their upcoming meeting on December 18. Meanwhile, Germany's annual inflation rate rose slightly to 2.2% in November, marking its highest level in four months and aligning with preliminary estimates.

In Asia, China's trade figures revealed mixed results; exports grew by only 6.7% year-on-year in November—below forecasts—and imports fell sharply by 3.9%. This has raised concerns about domestic demand within China as well as broader implications for global supply chains and commodity markets amid ongoing geopolitical tensions affecting investor sentiment across regions.

Market reactions reflect these uncertainties: European stocks are trading lower following disappointing Chinese trade data while Asian indices showed varied performance influenced by local monetary policies such as Australia's decision to maintain interest rates at current levels despite signs pointing toward future cuts due to cooling growth conditions.

iShares China Large-Cap ETF (FXI) [-4.0%]
The iShares China Large-Cap ETF (FXI) has experienced a significant drop, reflecting a daily return of nearly 4%. This decline coincides with the release of China's trade data, which revealed a slowdown in exports and an unexpected contraction in imports, raising concerns about domestic demand. The trade balance exceeded expectations but showed a decrease from the previous month. Notably, the Hang Seng Index and Hang Seng Tech Index posted gains, contrasting with FXI's performance. Significant trading activity was noted for FXI, with $1.45 billion traded across 81 transactions recently. Among the ETF's holdings, TCEHY and JD were among the top contributors to the negative performance. Additionally, the AUD/USD pair has declined, reflecting broader market sentiment that may also influence FXI.

AUD/USD (AUD/USD) [-0.6%]
The Australian Dollar (AUD) has depreciated significantly today, falling sharply below 0.6400. This movement follows the Reserve Bank of Australia's decision to maintain its cash rate at 4.35% for the ninth consecutive meeting, coupled with a less-hawkish outlook on future interest rates due to easing inflation risks. China's trade data revealed slower export growth and an unexpected decline in imports, raising concerns about economic health that negatively impacted commodity currencies like the AUD. Social media discussions highlighted the RBA's decision and a dovish shift in its stance, leading traders to increase bets on potential rate cuts. Additionally, the National Australia Bank's survey indicated that business conditions have fallen to pandemic-era lows, with confidence among businesses dropping sharply. Meanwhile, the EUR/USD has decreased, reflecting broader market sentiment that may also influence the AUD/USD's movement.

ORCL | -6.7% | -32.6B
Oracle Corp | Systems Software
Oracle Corp reported its Q2 results, revealing adjusted revenue of 14.06 billion, missing the estimate of 14.12 billion, and an adjusted EPS of 1.47, below the consensus of 1.48. Cloud revenue reached 5.9 billion, falling short of the expected 6 billion. The company's remaining performance obligations increased by 49% to 97 billion. Following the earnings announcement, Oracle shares dropped significantly in after-hours trading. CEO Safra Catz noted a 52% year-over-year increase in AI-driven cloud infrastructure revenue, contributing to an overall total revenue of 14.1 billion, reflecting a 9% year-over-year increase. Despite this growth, analysts expressed concerns over the earnings miss and currency fluctuations impacting projections. Oracle's Q3 guidance suggested revenue growth between 9% to 11%, with adjusted EPS expectations of 1.50 to 1.54, which were below prior estimates.

MDB | -8.0% | -1.9B
MongoDB Inc | Internet Services & Infrastructure
MongoDB, Inc. reported its Q3 fiscal results on December 9, 2024, announcing an adjusted EPS of 1.16, significantly surpassing the consensus estimate of 0.69. Revenue reached 529.4 million, exceeding expectations of 497.7 million and marking a 22% year-over-year increase. For Q4, the company anticipates revenue between 515 million and 519 million, slightly above analyst estimates. MongoDB raised its FY25 revenue outlook to between 1.973 billion and 1.977 billion, up from the previous forecast of 1.93 billion. Despite these strong earnings, there are concerns regarding a sequential decline in non-Atlas revenue and a deceleration in Atlas growth. Additionally, the impending departure of COO and CFO Michael Gordon at the end of January 2025 has raised market apprehension. Following the earnings announcement, shares exhibited significant volatility, reflecting mixed sentiment regarding the updated guidance and performance metrics.

FERG | -7.4%| -3.0B
Ferguson PLC | Trading Companies & Distributors
Ferguson PLC reported its first quarter results, posting an adjusted EPS of 2.45, which fell short of the analyst consensus estimate of 2.62 by 6.49%. Revenue for the quarter was 7.77 billion, also below the consensus estimate of 8.07 billion, although it showed a slight increase from 7.71 billion in the same period last year. The company anticipates low single-digit growth in FY25 net sales and expects capital expenditures to range between 400 million and 450 million. Additionally, Ferguson's adjusted operating margin is projected to be between 9.0% and 9.5% for FY25. Following the earnings report, Ferguson's stock price dropped significantly, moving down 4.3% within an hour of the announcement. The overall price movement has continued, with a total decline of 7.4% since Monday.

TMUS | +2.7%| +7.4B
T-Mobile US Inc | Wireless Telecommunication Services
T-Mobile US Inc is experiencing a notable price increase, coinciding with significant upward movement in the Wireless Telecommunication Services sector. CEO Mike Sievert, at the UBS Global Media and Communications Conference, reaffirmed a positive outlook for the fourth quarter, stating performance is "at least in line with" prior expectations and possibly better. He projected approximately 3 million postpaid phone net additions for the year and anticipated industry-leading service revenue growth of around 5% CAGR through 2027. Adjusted EBITDA growth is expected to be approximately 7% CAGR, with plans to allocate roughly $80 billion for investments and shareholder returns through 2027. Sievert emphasized that previous comments regarding Q4 trends were misinterpreted, underscoring continued growth momentum following a record third quarter for new mobile customers.

GOOGL | +4.1% | +92.4B
Alphabet Inc | Interactive Media & Services
Alphabet Inc's Class A shares have risen significantly in pre-market trading, following the unveiling of its Willow quantum computing chip. This chip, developed by Google Quantum AI, features 105 qubits and demonstrates breakthrough real-time error correction capabilities. CEO Sundar Pichai highlighted that Willow can solve a standard computation in under five minutes, a task that would take leading supercomputers over 10^25 years. The announcement has sparked discussions on social media about GOOGL being undervalued, with projections suggesting a potential price increase to $200. Additionally, a recent survey from Piper Sandler indicated a positive outlook for GOOGL, driven by spending growth and advancements in AI tools, particularly its Gemini and Performance Max products. Following these developments, GOOGL experienced a pre-market increase of approximately 4.1%.

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