On November 24, 2023: Bond yields jumped and major indexes ended mixed on a short trading day that capped a profitable week for stocks.
Major indexes post four consecutive weeks of gains
The Dow Jones Industrial Average rose by 0.3% on Friday, finishing the week up by 1.3%. The S&P 500 gained 0.1%, ending the week 1% higher. The Nasdaq climbed 0.9% this week despite a 0.1% decline today. Yields on 10-year government bonds jumped to around 4.47% after dipping below 4.4% earlier in the week.
Financial markets not the focus for investors today
The financial markets were not the primary focus for investors today, as they shifted their attention to Black Friday sales in traditional and online markets. Years of above-average inflation, rising interest rates, and economic uncertainty are expected to restrain American spending during this holiday season. However, U.S. consumers have exceeded everyone’s expectations this year, and the holidays may not be an exception.
Dow Jones rises to end four consecutive weeks of gains
The Dow Jones Industrial Average gained 117 points, or about 0.3%, in a quiet trading session today. Friday’s gains brought the index up 1.2% for the week, marking four consecutive weeks of rising performance.
Shares of Johnson & Johnson (JNJ) rose 1.1% as part of the leading healthcare sector, which gained 0.5% in the session. Shares of UnitedHealth Group (UNH) increased by 0.6%, and shares of Amgen (AMGN) rose by 0.3%.
Shares of Walt Disney Company (DIS) rose by about 1% with the release of its new animated film “Wish”.
Shares of Walmart (WMT) increased by 0.9% as shoppers sought Black Friday deals.
Shares of Walgreens Boots Alliance (WBA) rose 0.8% after a three-day halt based on news that a British financial services company agreed to buy a $6 billion stake in the Boots pension fund, which could pave the way for the sale of the British pharmacy chain.
Shares of Travelers Companies (TRV) rose by 0.8%.
Shares of Intel (INTC) rose 0.7% based on reports that its competitor Nvidia (NVDA) delayed the launch of its new artificial intelligence (AI) chip in China.
Shares of Caterpillar (CAT) rose 0.6% after four sessions of decline.
Shares of Apple (AAPL) fell by 0.7% based on reports of declining iPhone sales in China during “Singles Day” shopping holiday.
Apple shares dropped 0.3%, contributing to a negative day for the tech sector which lost 0.3%. Shares of Microsoft (MSFT) fell by 0.1%.
Shares of Nike (NKE) declined by 0.3%, ending a three-day rising streak.
Walgreens stocks rise after divesting Boots pension plan
Shares of Walgreens Boots Alliance (WBA) rose by about 1% on Friday after British financial services group Legal & General agreed to purchase the Boots pension fund for £4.8 billion (approximately $6 billion), paving the way for the sale of the British pharmacy.
Walgreens attempted to sell Boots in 2021 but canceled those plans last year due to market disruptions. Shedding the pension liabilities of Boots could be an attempt to make the deal more attractive to potential buyers.
Walgreens and Alliance Boots began their merger process in 2012 when Walgreens purchased a 45% stake in the British retail pharmacy chain for $4 billion in cash and 83.4 million shares. The merger was completed in 2014 when Walgreens bought the remaining 55% for $5.3 billion in cash and 144.3 million shares.
Since
At that time, Walgreens faced challenges amid the rise of online pharmacies and the entry of major competitors in the retail sector such as Amazon (AMZN) and Walmart (WMT).
After reaching an all-time high of over $96 following the merger, shares of Walgreens Boots Alliance fell to a 25-year low of $20.17 earlier this month.
Nvidia Shares Decline Due to Delay in Launch of New AI Chip in China
Shares of Nvidia (NVDA) fell by 1% based on a report that the chipmaker has delayed the launch of a new artificial intelligence (AI) chip in China that would comply with the latest U.S. export restrictions.
Reuters reported that the H20 chip is the strongest among three chips the company planned to launch after President Biden signed an executive order in August limiting advanced technology shipments to China.
It was believed that Nvidia would launch the chips this month. However, sources familiar with the matter indicated that the H20 chip will now launch in the first quarter of 2024 due to challenges faced by server companies in integrating the chip.
Nvidia’s shares had soared, reaching an all-time high on Monday thanks to increasing demand for its AI chips. However, the stock declined on Wednesday when the company clarified after releasing its quarterly report that export rules to China would negatively impact the current quarter’s results.
Apple Shares Decline Due to Drop in iPhone Sales in China
Shares of Apple Inc. (AAPL) declined by about 1% on Friday after reports indicated a drop in iPhone sales during the 2023 “Singles Day” shopping event in China by about 4% compared to last year, according to data from Counterpoint Research.
Shares of Apple also fell behind its local competitors in the smartphone market, with Huawei’s sales up by 66% and Xiaomi’s sales increasing by 28%.
The iPhone is Apple’s most successful product, accounting for about 50% of total revenue in the last financial quarter. For this reason, investors closely monitor iPhone sales.
Global smartphone sales rose in October after declining for more than 2 years. The launch of the Huawei Mate 60 and Apple’s iPhone 15 contributed to sales reaching their highest level since January 2022.
November PMI Shows Drop in Private Employment for First Time Since June 2020
U.S. companies surveyed by S&P Global in its monthly Purchasing Managers’ Index (PMI) reported a decline in employment numbers in November for the first time since June 2020 due to ongoing declines in demand.
The U.S. composite PMI output index was 50.7 in November, the same as the October reading, indicating a stable and moderate increase in business activity. Growth in manufacturing slowed while rising slightly among service providers.
Business expectations improved slightly in the manufacturing sector – thanks to increased international demand – but declined in the services sector due to concerns about consumer spending and economic uncertainty.
Service providers reduced their workforce for the first time since June 2020, citing subdued demand, high costs, and a decline in backlogs.
Early Market Movers
Shares of iRobot Corp. (IRBT) jumped by about 30% after Reuters reported that the European Union intends to grant Amazon (AMZN) unconditional approval to proceed with its $1.4 billion acquisition. Shares of Amazon fell by about 0.2% in early trading.
Shares of Stellantis NV (STLA) rose by about 2% after the opening of the first recycling and reusing parts center in Turin, Italy. The company’s CEO Carlos Tavares stated that he expects the larger “circular economy” sector to generate $2 billion in revenue by 2030.
Shares rose
Shares of General Motors Co. (GM) fell by about 1% after the newly appointed CEO of Cruise, GM’s autonomous taxi service, which recently halted operations due to safety reviews, announced on Wednesday that he would relaunch the service in only one city, scaling back plans to expand to more than ten cities.
Nvidia Corp. (NVDA) shares dropped by about 1% following reports that the leading AI chipmaker informed its clients in China to postpone the launch of a new chip designed to comply with U.S. export regulations until the first quarter of 2024.
Mixed Stock Futures Before a Short Trading Day
Futures contracts linked to the Dow Jones Industrial Average were about 0.1% higher in pre-market trading.
S&P 500 futures rose by slightly less than 0.1%.
Nasdaq 100 futures were a bit lower.
Source: https://www.investopedia.com/dow-jones-today-11242023-8406452
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