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S&P flash U.S. services index rises to 51.3 in December from 50.8
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Jeffry Bartash
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Tag: industrial news
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Chaotic 'triple witching' set for Friday, as $5.3 trillion in options expire
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Options contracts tied to more than $5 trillion worth of stocks, exchange-traded funds and indexes are set to expire on Friday as the latest “triple witching” expiration event collides with the rebalancing of the S&P 500 and Nasdaq-100.
The result could be a high-octane, and potentially extremely volatile, session where tens of billions of contracts and shares could change hands, market strategists said.
According to figures from Rocky Fishman, founder of Asym500, options with a notional value of $5.3 trillion are set to expire, with the biggest slug expiring ahead of the open.
ASYM50
On one side, many traders will be cashing in bullish bets that are deep in the money, while some roll their positions, forcing market-makers to continue to hedge their exposure.
At the same time, managers of index-tracking funds will need to finish adjusting their holdings before the announced index changes take effect.
Already, trading volume has been trending higher all week. In the U.S. market, 17 billion shares changed hands on Thursday, according to Steve Sosnick, chief market strategist at Interactive Brokers, during a phone interview with MarketWatch. That is up from 10.6 billion on Tuesday.
“I expect to see enormous volumes tomorrow in a lot of popular names,” Sosnick said.
“Not only will this one be the largest option expiration of the year (as is typical for December), but it is currently set up to become the largest SPX option expiration in more than a decade,” Fishman said in a report shared with MarketWatch.
Brent Kochuba, founder of Spotgamma, an options-market analytics provider, went even further during a phone interview with MarketWatch: “This might be the biggest options expiration ever.”
ASYM50
As markets have rallied, traders have been scooping up bullish options contracts at a record pace, according to data from Cboe Global Markets, the biggest operator of options exchanges in the U.S.
For S&P 500-linked options, typically the most popular product, 4.8 million contracts changed hands on Thursday, according to Cboe, a new record, surpassing the previous record from Nov. 14.
Also, total call-trading volume for all U.S. equity options exceeded 30 million contracts on Wednesday, according to Goldman Sachs Group, making it one of the busiest days for trading in bullish contracts this year.
Aggressive call-buying over the past month has helped push the S&P 500 to just shy of its record closing high, options-market experts said. The S&P 500
SPX
gained 8.9% in November, its best month of 2023, and the 18th best-performing month of the past 73 years. And it has continued to climb in December, having risen 3.3% through Thursday’s close, according to FactSet data.Earlier this week, options strategists warned that markets might run into trouble at 4,600 on the S&P 500. They warned that a “call wall” of open-interest in bullish contracts around that level could force market makers to put the breaks on the rally.
Instead, bullish traders blew through the call wall, pushing it higher to 4,700, said Kochuba.
The S&P 500 closed at 4,719.55 on Thursday, its highest close since Jan. 12, 2022, according to FactSet data. The index is now sitting within 1.75 percentage points of its record closing high of 4,796.56 on Jan. 3, 2022.
Traders’ bullishness recently helped push the Cboe Volatility Index
VIX,
otherwise known as Wall Street’s “fear gauge,” to multiyear lows, according to FactSet data.To be sure, it isn’t just S&P 500 options and contracts tied to popular stocks like Tesla Inc.
TSLA,
+4.91%
seeing explosive volume: Calls tied to the iShares Russell 2000 ETF
IWM,
which tracks the small-cap Russell 2000, hit 1.35 million contracts, the third-highest ever, according to Goldman. Activity in options contracts linked to small-cap stock indexes has surged since late October.Heavy call buying has pushed the put-call skew for S&P 500 options to its lowest level in a year, according to data from Goldman Sachs Group.
This shows that investors have been scrambling to buy bullish contracts, while largely shunning bearish ones, as stocks marched higher. Goldman analysts described Friday as “the last major liquidity event of the year” in a note to clients obtained by MarketWatch.
GOLDMAN SACHS
“Triple Witching” days happen once a quarter. They are thusly named because options tied to single stocks, ETFs and indexes will expire, alongside index-tracking futures contracts. Options-market experts say they are typically associated with more intraday swings and higher trading volume.
Making things even more interesting is the fact that the quarterly rebalancing of the S&P 500 and Nasdaq-100 is due to take effect after markets close on Friday.
Normally routine, this quarter’s rebalancing is drawing outsize attention following an extremely rare ad hoc rebalancing over the summer to rein in the influence of megacap stocks in the Nasdaq-100.
Earlier this month, Standard & Poor’s announced its rebalancing plans, which included reducing the weighting of two Magnificent Seven stocks, Apple Inc.
AAPL,
+0.08%
and Alphabet Inc.
GOOG,
-0.57% GOOGL,
-0.48% .
At the same time, Amazon.com Inc.
AMZN,
-0.95% ,
which is also part of the Mag 7, will see its weighting increased. Meanwhile, three companies will join the index, including Uber Inc.
UBER,
+0.86% ,
while shares of three other companies depart.Kochuba believes Friday’s expiration could remove the last barrier holding stocks back from rocketing to record highs before the end of the year.
“After OpEx, markets will be able to move more freely,” Kochuba said.
Garrett DeSimone of OptionMetrics cautioned that investors shouldn’t place too much weight on options-market activity and other technical factors.
“At the end of the day, macro trumps everything,” he said during an interview with MarketWatch.
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Import prices fall for second straight month and as U.S. inflation eases
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Developing story. Check back for updates.
The numbers: The cost of imported goods fell 0.4% to mark the second decline in a row, contributing to a slowdown in U.S. inflation more broadly.
Economists polled by the Wall Street Journal had estimated a 0.8% drop.
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These 4 Stocks Cut Their Dividends. Now Is the Time to Bring Them Back.
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The New Year is almost here, and that means it’s time for four of the last dividend cutters of 2020— Boeing, American Airlines Group, Royal Caribbean Group, and Carnival—to bring back their payouts to shareholders.
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S&P 500's year-end rally lifts 51 stocks to a record close
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It has been a record day for 10% of the S&P 500.
A group of 51 stocks in the benchmark equity index swept to record finishes on Tuesday, the most since April 20, 2022, according to a tally from Dow Jones Market Data.
It was a record day for 51 stocks in the S&P 500.
Dow Jones Market Data
Stocks that logged a record close on Tuesday included Allstate Corp
ALL,
+0.90% ,
Costco Wholesale
COST,
+0.90% ,
D.R. Horton, Inc.
DHI,
+0.65% ,
Mastercard
MA,
+1.21% ,
T-Mobile US Inc.,
TMUS,
+1.00%
Visa Inc.
V,
+1.19%
and Waste Management Inc.,
WM,
+1.85%
among others.Equities have been in a year-end rally mode, driven higher by tumbling benchmark yields that finance much of the U.S. economy and expectations of coming interest-rate cuts.
The 10-year Treasury rate
BX:TMUBMUSD10Y
fell to 4.2% on Tuesday from a high of about 5% in October.The Dow Jones Industrial Average
DJIA
on Tuesday ended at its third-highest level on record, while the S&P 500 index
SPX
and Nasdaq Composite Index
COMP
added to a string of new closing highs for 2023. The Dow finished 0.6% away from its record close logged almost two years ago, while the S&P 500 was only 3.2% below its close from the same period, according to Dow Jones Market Data.The push higher for stocks followed inflation data for November that showed price pressures continued to ease from peak levels, but still were above the Fed’s 2% annual target.
The consumer-price index pegged the annual rate of inflation at 3.1%, down from 3.2% in October, with the “last mile” of inflation expected to be the hardest part to tame.
Investors now will be focused on Wednesday’s Federal Reserve decision. Short-term interest rates are expected to remain unchanged at a 22-year high, but the central bank is expected to update its “dot plot” forecast of rates over a longer time horizon.
“Although the market will focus on the timing of rate cuts, we suspect Chair Powell will be keen to strike notes of caution to avoid financial conditions easing too much further to ensure the Fed continues to see encouraging progress on inflation,” said Emin Hajiyev, senior economist at Insight Investment, in emailed comments.
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Nokia Cuts Operating Margin Guidance Amid Challenging Market
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Updated Dec. 12, 2023 2:54 am ET
Nokia cut its operating margin guidance, with market conditions in its mobile networks business remaining challenging due to falling operator spending and the Indian market normalizing after a period of rapid 5G roll-outs.
The Finnish telecom equipment maker said Tuesday that it now targets a comparable operating margin target of at least 13% by 2026, from at least 14% previously.
Copyright ©2023 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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Oracle Stock Falls After Earnings Report Disappoints
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Oracle shares were heading sharply lower in late trading Monday after the enterprise software giant posted November quarter financial results that fell short of both the company’s own guidance and consensus Street estimates.
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Hasbro to lay off more workers amid toy sales slump
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Hasbro Inc. is cutting about 900 jobs as the company is facing a slump in toy and game sales after a boom during the pandemic.
The cost-saving plan will result in “the reallocation of people and resources,” including early retirement for some employees and layoffs over the next two years, Hasbro
HAS,
+0.39%
said in a filing late Monday.The Wall Street Journal reported the layoff plans earlier Monday, citing a memo it had viewed.
The maker of My Little Pony and Monopoly launched the plan in January, and at the time announced the layoffs of about 15% of its workforce.
It has booked about $94 million in expenses related to severance, stock compensation and employee benefits, and expects to book an additional $40 million, the company said in the filing Monday.
Hasbro in October missed third-quarter earnings expectations and slashed its full-year outlook, citing a “softer toy outlook.”
Shares of Hasbro and rival Mattel Inc.
MAT,
+0.05%
fell about 4% and 3%, respectively, in the extended session Monday, as the Wall Street Journal report also cited “early data points to another weak year” for the toy industry following the a boom during the pandemic.Mattel in October reported a better-than-expected third quarter, thanks in part to its wildly successful Barbie movie.
Shares of Mattel have gained 6% this year, which contrasts with a 20% drop for Hasbro stock. Both stocks, however, have underperformed in relation to the S&P 500 index
SPX,
which is up about 20% in 2023.In a February filing, Hasbro said it had about 6,500 employees worldwide as of the end of 2022.
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Tesla Is Cutting Prices Again, in a Different Way
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[ad_2]It’s year-end and Tesla is in the midst of its final push to meet Wall Street expectations for a record quarter. It won’t be easy for the battery-electric vehicle leader to sell almost half a million cars amid higher interest rates and more EV competition. Instead of price cuts, Tesla is using a new tool to move metal: Incentives.
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Domino's Pizza Backs Guidance, Eyes Opening More Stores
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By Najat Kantouar
Domino’s Pizza Group said it backed its fiscal 2023 guidance expecting accelerating growth through additional opportunities mostly in the U.K. and Ireland markets.
The pizza chain–the holder of the master franchise agreement to own, operate and franchise Domino’s stores in the U.K. and Ireland–said that it expects underlying earnings before interest, taxes, depreciation and amortization to be in the range of 132 million pounds ($165.6 million) to GBP138 million.
The company added that it still expects to open at least 60 new stores this year.
“Material progress has been made in recent years but there are a number of areas where we can significantly enhance growth,” Chief Executive Officer Andrew Rennie said.
Write to Najat Kantouar at najat.kantouar@wsj.com
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Shari Redstone reportedly in talks to sell Paramount parent to Skydance
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Media tycoon Shari Redstone is in talks to sell controlling interesting in Paramount parent National Amusements to media and entertainment company Skydance, Puck and the New York Times reported Sunday.
On Friday, shares of Paramount Global Inc. rallied 13% after Deadline reported Skydance and private-equity firm RedBird Capital were kicking the tires on National Amusement, which has a 77% stake in Paramount.
According to the Times, Redstone — the daughter of late Paramount CEO Sumner Redstone — has held talks with Skydance in recent weeks, though the Times said it was unclear if a deal would be reached.
Skydance, which is led by David Ellison, son of Oracle founder Larry Ellison, is one of Hollywood’s top independent studios, and has produced Paramount blockbusters such as “Mission: Impossible — Dead Reckoning” and “Top Gun: Maverick.” RedBird is a financial backer of Skydance.
A sale would be a major reversal for Redstone, who waged a bitter battle for control of the company in 2016, and who later led the effort to merge CBS Corp. and Viacom, which led to the creation of the current Paramount Global.
Deadline had reported that Skydance would be more interested in Paramount’s IP and movie studio, and could look to sell its TV assets, including CBS.
A deal could signal the start of a major shakeup across the media industry, as traditional TV companies are struggling to make money in the streaming age. Comcast Corp.
CMCSA,
-0.17% ,
which owns NBCUniversal, could be looking to expand, while Warner Bros. Discovery
WBD,
+6.01%
could be a potential seller. Disney
DIS,
+0.84%
CEO Bob Iger recently floated the idea of selling ABC, but quickly walked that back.Paramount Global shares
PARA,
+12.11%
have surged nearly 40% in the past month, but are still about flat year to date.[ad_2]
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WSJ News Exclusive | Cigna Calls Off Humana Pursuit, Plans Big Stock Buyback
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Updated Dec. 10, 2023 4:47 pm ET
Cigna Group abandoned its pursuit of a tie-up with Humana after shareholders balked at a deal that would have created a roughly $140 billion giant in the health-insurance industry.
The companies couldn’t come to agreement on price and other financial terms, according to people familiar with the matter. In the near term, Cigna is turning its focus toward smaller, so-called bolt-on, acquisitions.
Copyright ©2023 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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A New Era of Income Investing Is Turning Boomers Into Bond Buyers
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When it comes to the baby boomers’ run of investing luck, timing has been on their side.
Decades of stellar stock-market returns produced by a series of bull markets that began in 1982 coincided with boomers’ prime working years and made their nest eggs grow.
Copyright ©2023 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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SmileDirectClub winds down operations — but customers are told to keep paying
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SmileDirectClub Inc. said late Friday it was winding down operations, effective immediately, seeming to cast its millions of customers adrift — except when it comes to their bills.
SmileDirectClub
SDCCQ,
-45.32%
said in a statement that its aligner treatment is not available to new customers. For existing customers, the company said, “we apologize for the inconvenience, but customer care support is no longer available” through its telehealth program, including periodic check-ins.The company did not immediately return a request for comment.
People on the company’s SmilePay plan will need to make all payments until paid in full, the company said. SmileDirect also ended its lifetime guarantee.
For those seeking refunds, the company said that “there will be more information to come once the bankruptcy process determines next steps and additional measures customers can take.”
The company in late September filed for bankruptcy protection, saying it was seeking to find investors for a “comprehensive recapitalization.” In January, it laid off workers and ended a few international operations in a bid to become profitable.
The company has long attracted criticism for its teledentistry model, which it has said aims to disrupt the orthodontics industry. There were allegations a few years ago that it had harmed customers by breaking teeth and causing nerve damage, which the company denied.
Setbacks also include a scathing report from a short seller; regulatory action in California, Alabama and Georgia; and opposition to the company’s business practices from medical organizations including the American Dental Association and the American Association of Orthodontists.
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Mortgage rates' dip to 7% could be brief if jobs market stays strong, Fannie Mae economist says
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November’s sharp pullback in 30-year fixed mortgage rates may not last if the labor market remains strong, said Mark Palim, deputy chief economist at Fannie Mae.
Palim was speaking to the robust jobs report released on Friday, showing the U.S. added 199,000 jobs in November and that wages rose, albeit with the figures somewhat inflated by the return of striking workers from the auto industry and from Hollywood.
Homebuyers can benefit from a robust labor market and the near 80 basis point decline in mortgage rates since the end of October, Palim said. But if the “labor markets remain this strong, we believe the pace of mortgage rate declines will likely not continue in the near term or may partially reverse,” he said in a statement.
The benchmark 30-year fixed mortgage rate was edging down to 7.05% on Friday, after surging to nearly 8% in October, according to Mortgage Daily News.
Optimism around the potential for falling mortgage costs to thaw home sales helped lift shares of Toll Brothers Inc.,
TOL,
+1.86%
and a slew of other homebuilders tracked by the SPDR S&P Homebuilders ETF,
XH,
to record highs earlier this week, even while investors in some homebuilder bonds have been sellers in recent weeks.Yields on 10-year
BX:TMUBMUSD10Y
and 30-year Treasury notes
BX:TMUBMUSD30Y
were up sharply Friday, to about 4.23% and 4.32%, respectively, but still below the highs of about 5% in October. The surge in long-term borrowing costs was stoked by tough talk by Federal Reserve officials about the need to keep rates higher for longer to bring inflation down to a 2% annual target.Read: Solid job growth, sharp wage gains sends Treasury yields up by the most in months
U.S. stocks were up Friday afternoon, shaking off earlier weakness following the jobs report. The Dow Jones Industrial Average
DJIA
was 0.2% higher, further narrowing the gap between its last record close set two years ago, the S&P 500 index
SPX
and the Nasdaq Composite Index
COMP
also were up 0.2%, according to FactSet data.[ad_2]
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AMD Stock Is More Expensive Than Nvidia. That Makes No Sense.
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Advanced Micro Devices is on a roll this week, with its shares marching higher since the chip maker revealed ambitious plans to push into artificial intelligence. Investors looking to dive in best be warned: the stock now looks more expensive than Nvidia.
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This family just bumped Walmart’s Waltons as the richest in the world
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The Walton family’s five-year rule as the world’s richest dynasty has come to an end.
The House of Nahyan, rulers of oil-rich Abu Dhabi in the United Arab Emirates, comes in at No. 1 on Bloomberg’s world’s richest families list for 2023, bumping the third-generation Walmart
WMT,
-1.05%
heirs that have long topped the rankingsThe report released this week said that petroleum fortunes are “reshaping global business as never before,” and noted that the three Gulf families who made Bloomberg’s latest list of family fortunes are probably even wealthier than these “conservative estimates.”
The Al Nahyans of Abu Dhabi rule the list with $305 billion to their name, according to the report, which notes that the United Arab Emirates capital is home to most of the country’s oil reserves.
The Al Nahyan family holds $45 billion more than the Walton family, which owns 46% of Walmart — the world’s largest retailer by revenue. The Waltons have ruled the rankings for the past several years, but are now No. 2, worth $259.7 billion in the most recent fiscal year.
Rounding out the top three is the Hermès family, whose fortune can be traced to the French luxury house. The founding family is worth $150.9 billion, as they still own a two-thirds majority in the company.
As far as other Americans on the list, the Mars family’s confectionary collection of chocolate brands such as M&Ms, Milky Way and Snickers bars — not to mention pet products — land them in fourth place with $141.9 billion. And the Koch family, behind Koch Industries, is in sixth place with $127.3 billion.
The report added that the richest families have certainly gotten richer this year, with the world’s ultra-rich clans collectively adding $1.5 trillion — yes, trillion — to their wealth in the past year, a 43% increase over their already considerable fortunes in 2022.
So here are the world’s 10 richest families of 2023, as reported by Bloomberg.
- Al Nahyan, ruling family of the United Arab Emirates, $305 billion
- Walton, owners of Walmart in the U.S., $259.7 billion
- Hermès, owners of Hermès in France, $150.9 billion
- Mars, owners of Mars, Inc. in the U.S., $141.9 billion
- Al Thani, ruling family of Qatar, $133 billion
- Koch, owners of Koch Industries in the U.S., $127.3 billion
- Al Saud, ruling family of Saudi Arabia, $112 billion
- Ambani, owner of Reliance Industries in India, $89.9 billion
- Wertheimer, owner of Chanel in France, $89.6 billion
- Thomson, owner of Thomson Reuters in Canada, $71.1. million
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Krispy Kreme has launched in Paris — and is already in trouble with the mayor's office
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Krispy Kreme has already run into trouble with the deputy mayor of Paris after opening its first store in the French capital this week.
The opening saw hundreds of Parisians flock to Krispy Kreme’s
DNUT,
+0.31%
new shop, which occupies a site that previously housed a restaurant run by Michelin-starred chef Alain Ducasse.The North Carolina doughnut purveyor’s arrival in Paris, however, also attracted the ire of Deputy Mayor Emmanuel Grégoire, after the business put up a series of posters on the streets of Paris.
The Socialist Party politician slammed Krispy Kreme’s poster campaign for “littering the streets,” which he described as “illegal, polluting and costly for the community.” The so-called guerrilla marketing tactic of flyposting is illegal under French law.
“Prepare to get a big fine!” Grégoire said in response to a tweet celebrating the campaign that read: “Prepare to change your diet with @KrispyKremeFrr.”
The poster campaign was developed by advertising agency Buzzman Time, which has previously designed marketing campaigns for Burger King and Uber Eats.
The opening of Krispy Kreme’s Paris store marks the company’s first foray into France, which is now the second-biggest fast-food market in the world.
The New York–listed company, which was founded in 1937, plans to build 500 doughnut stalls across France over the next five years. Krispy Kreme doughnuts are currently available in 38 countries, including Cambodia, Myanmar and Kazakhstan. Its 379 locations in the U.S. are in 41 states and the District of Columbia.
According to its most recent financial results, Krispy Kreme generated $407 million in revenue in the third quarter of 2023, a 7.9% increase over the previous year.
Krispy Kreme and Buzzman Time have not responded to a request by MarketWatch for comment.
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Airbus Gets Order From Cathay Pacific for Six A350F Aircraft Worth $2.7 Bln
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By Adria Calatayud
Airbus and Hong Kong’s Cathay Pacific Airways have signed a purchase agreement for six A350F freighter aircraft with a basic price of $2.71 billion before price concessions, the companies said Friday.
Cathay said Airbus granted it significant price concessions which might be used toward the payment of the aircraft. The basic price comprises prices for airframe, optional features and engine, Cathay said.
The aircraft, expected to be delivered by the end of 2029, will expand Cathay’s cargo fleet capacity and will mainly serve long-haul destinations in North America, South America and Europe, it said.
Airbus said the A350F can carry a payload of up to 111 metric tons and can fly up to 4,700 nautical miles, or 8,700 kilometers.
Write to Adria Calatayud at adria.calatayud@dowjones.com
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Broadcom logs earnings beat, but chip stock edges lower
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Broadcom Inc. topped profit expectations for its latest quarter, but shares of the chip company were falling in Thursday’s aftermarket action.
The company recorded fiscal fourth-quarter net income of $3.5 billion, or $8.25 a share, whereas it posted net income of $3.3 billion, or $7.83 a share, in the year-earlier period.
On an adjusted basis, Broadcom
AVGO,
+2.06%
earned $11.06 a share, up from $10.45 a share a year before, while analysts tracked by FactSet were modeling $10.96 a share.Revenue increased to $9.30 billion from $8.93 billion, while the FactSet consensus was for $9.28 billion. Broadcom generated $7.33 billion in revenue from semiconductor solutions, up 3%, along with $1.97 billion in revenue from infrastructure solutions, up 7%.
Results were “driven by investments in accelerators and network connectivity for AI by hyperscalers,” Chief Executive Hock Tan said in a release.
Broadcom’s stock was off about 2% in Thursday’s extended session.
See also: Nvidia’s stock is now this chip analyst’s top pick — knocking out AMD
For the new fiscal year, Broadcom anticipates $50 billion in revenue, when including contributions from the recently closed acquisition of VMware that may not be fully reflected in consensus estimates. The company also expects adjusted earnings before interest, taxes, depreciation and amortization to be about 60% of projected revenue; it was 65% of revenue in the most recent fiscal year.
The company expects its semiconductor segment to sustain a mid- to high-single-digit revenue growth rate in fiscal 2024.
Opinion: AMD is poised for huge AI growth in 2024 and the stock market is paying attention
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