"Just one more thing."

- Lt. Columbo

Tesla TSLA is trading down -$5/share on this news announced after the close. 

Elon Musk request to reinstate his $56 billion Tesla pay package is again rejected by judge - CBS News

Closing Breadth

S&P 500 Sectors

% Movers

Nasdaq 100 Heat Map

NASD Advance-Decline Intraday

As of 4:17 p.m.:

I was asked by the family not to publicize that Sir Arthur passed away yesterday morning.

His death was just announced.

More tomorrow...

* Groundhog day!

* Markets steadily rose throughout the day.

Breadth is weak on the NYSE (around 4-5 negative after being much worse in the late morning):

At 3:15 p.m. S&P cash was +16 handles.

Here are today's "Things":

* I added to my Bitcoin short.

* I shorted two tranches (when S&P was +9 handles and +16 handles) of Index calls

* I shorted more TSLA from $352 to $358 ($353.74 average).

* I added to my AAPL short at $239.45.

* Shorted more financials

I added to my Apple AAPL short at $239.44.

As I mentioned earlier in the day, the S&P Short Range Oscillator is overbought.

Join EY, Dan, Guy and Carter now on MRKT CALL at 1 p.m..

MRKT CALL is one of the most honest, transparent and value added 45 minutes on the internet.

And its free!

Let's go to the videotape. MRKT Call - Monday, December 2nd

I have added to my Bitcoin short today.

With the Indices slightly higher (+5 handles in S&P terms), breadth is negative 2.5/1:

From Peter Boockvar

ISM mfr'g still underwater but a bit less so

Continuing on with the US manufacturing recession, ISM said its November index was 48.4, remaining below 50 but that was above the estimate of 47.5 and up from 46.5 in October. This index has been 50 or above (in March at 50.3) once since October 2022.

New orders rose to 50.4 from 47.1 and back above 50 for the first time since March 2024. Backlogs though fell to just 41.8, down .5 pt m/o/m and a 4 month low. Inventories rebounded to 48.1 from 42.6 and exports were up 3.2 pts to 48.7, though both still under 50. Supplier deliveries, reflecting supply chains, fell 3.3 pts to 48.7 (easing of lead times). Prices paid dropped 4.5 pts to 50.3 after rising by 6.5 pts last month. Finally, and ahead of the jobs data this week, the employment component rose 3.7 pts to 48.1, though below 50 for the 6th straight month

Notwithstanding the lift in manufacturing confidence, overall breadth worsened with just 3 industries seeing growth vs 5 in October. Similar to last month, 11 reported a contraction with the balance seeing no change. That 3 count is the least since just one saw growth in December 2023. Food, beverage & tobacco, along with computer/electronic products and electrical equipment were the sectors seeing growth with the latter two likely helped by AI/data center spend.

While new orders lifted back above 50, I think due in part to some pull forward of activity ahead of any tariffs, ISM said “Panelists again noted a continued level of uncertainty and concern about a lack of new order activity, with a 1-to-1 ratio of positive comments vs those expressing concern about near-term demand, an improvement compared to October.”

Just 3 of 18 industries asked saw a lift in employment. ISM said “Respondents’ companies are continuing to reduce head counts through layoffs, attrition and hiring freezes.”

On exports, “New export orders continue to be weak, as international trading partners struggle with weak economies, but the slowing rate of contraction may indicate that stimulus measures taken by countries like China and Japan could be starting to have an effect on US export orders.”

Bottom line, US manufacturing, and globally too, continues to bounce along the contractionary bottom. We’re all looking for the eventual lift in goods demand on the part of the consumer, and an inventory rebuild to come but not many signs yet. Also, as stated and as seen, we’re seeing a pull forward of orders ahead of any tariffs to come but that just builds inventory. That said, I am seeing some retailers that are pitching a ‘get ahead of the tariffs price hike’ type advertisement.

Here were some industry specific comments:

“High mortgage rates continue to hamper demand for new housing construction, which is a key market for adhesives and sealants.” [Chemical Products]

“Business remains slow. We anticipate that the first half of 2025 will be similar and hope that demand increases in the second half of 2025.” [Transportation Equipment]

“Inflation, even after easing, continues to impact demand. Consumers are looking for value, and purchasing behaviors are changing as many shoppers reduce consumption, causing softer volume.” [Food, Beverage & Tobacco Products]

“Backlog is rising precipitously after 18 months of troughing. The long-awaited pent-up buying has started. Competition for qualified technical labor is a constraint on operational throughput.” [Computer & Electronic Products]

“A general construction slowdown in the fourth quarter has created a surplus of finished goods, creating the need for an extra two weeks of shutdown over the Christmas holiday period. We are carefully watching demand in the first quarter to determine if more permanent workforce reductions will be necessary.” [Machinery]

“Business is slowing as customers destock and appear uncertain about near-term demand. Preliminary forecast for 2025 is down significantly; we hope to see improvements now that we are beyond U.S. election uncertainties.” [Fabricated Metal Products]

“Our supplier has a positive outlook on the U.S. economy going into 2025. Our business is seeing an uptick in sales forecasts for the first quarter of 2025 versus the fourth quarter of 2024. Overall, our outlook for 2025 is optimistic.” [Textile Mills]

“We’re finally seeing traction in the last few weeks (with) a higher volume of orders. Backlog is starting to grow.” [Electrical Equipment, Appliances & Components]

“Late to the game, we are now working on our buying plan in light of potential increased tariffs on imports from China. Cost and capacity of U.S. manufacturing is a concern; a lack of relationship with alternate low-cost international manufacturers is another.” [Miscellaneous Manufacturing]

“After the election, we have seen an uptick in customers wanting to come back to the U.S. for making their products. We are working through these inquiries. They seem very motivated.” [Primary Metals]

ISM

New Orders

Prices Paid

- New York Stock Exchange volume flat to its one-month average;

- Nasdaq volume 19% below its one-month average

I added to my Tesla TSLA short at $356.39.

Roth Capital raises their price target on Tesla TSLA from $85 to $380 - again (to paraphrase Warren Buffett) telling you more about the forecaster than his forecast.

With financials overbought, the U.S. economy's expansion moderating and interest rates likely to rise (today +6 bps) serving to expand already burgeoning unrealized portfolio losses - XLF (short) is my Trade of the Week.

Note that the two largest components of XLF - Berkshire Hathaway BRK.B and JPMorgan JPM - are way overbought. 

Bond yields are again marching higher -- with gains of as much as six basis points.

And equities are nonplussed, again.

* Right after the opening...

With S&P cash +9 1/2 handles I have added to my short Index call holdings.

I have shorted more Tesla TSLA at $358.11.

Adding across the board to my financial shorts. 

Chart from 8:48 a.m. ET:

Upside:

-SNTI +147% (announces Positive Initial Clinical Data in Phase 1 Clinical Trial of SENTI-202, a Logic Gated, Selective CD33/FLT3-Targeting CAR-NK Cell Therapy for the Treatment of Relapsed/Refractory Hematologic Malignancies Including AML; announces oversubscribed $37.6M Private Placement Equity Financing)

-PPBT +53% (reports Positive Final Results from Randomized Phase 2 Study of CM24 in Second Line Pancreatic Cancer; final data demonstrate CM24 in combination with nivolumab and Nal-IRI/5FU/LV chemotherapy clear and consistent improvement across all efficacy endpoints)

-NVCR +25% (US FDA approves HFE Transducer Arrays for use with Optune Gio for Glioblastoma; Phase 3 PANOVA-3 clinical trial of Tumor Treating Fields (TTFields) therapy for Pancreatic Cancer met primary endpoint)

-NRIX +8.6% (announces webcast to review new data from Its Phase 1 Clinical Trial of BTK Degrader NX-5948 Presented at the 66th American Society of Hematology (ASH) Annual Meeting)

-RDHL +7.9% (awarded judgment of ~$8M plus costs by New York Supreme Court)

-VUZI +6.1% (US OSHA expands deployment of Vuzix M400 Smart Glasses)

-INTC +5.0% (CEO Pat Gelsinger retires; David Zinsner and Michelle Johnston Holthaus named interim Co-CEO, effective immediately)

-GAP +4.7% (JPMorgan Chase and Co Raised GAP to Overweight from Neutral, price target: $30)

-NET +4.0% (Morgan Stanley Raised NET to Overweight from Equal Weight, price target: $130)

-ZLAB +3.6% (Zai Lab and Novocure announce positive topline results from Phase 3 PANOVA-3 Clinical Trial of Tumor Treating Fields (TTFields) Therapy for Pancreatic Cancer)

-ZK +3.2% (reports Nov deliveries)

-TSLA +2.3% (JPMorgan agreed to drop lawsuit against Tesla over stock warrants; terms not disclosed; reportedly Tesla and BYD ramp up China incentives in year-end sales push)

-AKAM +2.1% (Oppenheimer Raised AKAM to Outperform from Perform, price target: $120)

Downside:

-STLA -6.7% (CEO Carlos Tavares resigns, effective immediately)

-STRW -5.1% (files to sell common stock offering of indeterminate amount)

-UPST -4.8% (JPMorgan Chase and Co Cuts UPST to Underweight from Neutral, price target: $57)

-CORZ -4.5% (files to sell $500M of convertible senior notes due 2031)

-XAIR -4.5% (receives CE Mark in Europe for the LungFit PH System triggering $1M milestone payment; plans to initiate shipments to Asia-Pacific partner, Getz Healthcare, and other international partners in 2025)

-ANAB -3.9% (BTIG Cuts ANAB to Neutral from Buy)

-PCG -3.7% (CEO Poppe extends term of her Offer Letter through January 4, 2031; raises dividend, files to sell $1.2B of common stock and $1.2B of convertible preferred stock)

-BFH -2.3% (increases share repurchase program by $25M)

-IREN -2.3% (increased installed self-mining capacity by 33% to 28 EH/s; Sees sufficient miner inventory on-site to achieve 31 EH/s)

From Peter Boockvar:

Tariffs, the $ strength, political stress & rate hikes all tangled up/Stock market bullishness literally off this chart/PMIs

As one end is squeezed, it bulges somewhere else. I'm talking again about the impact of tariffs, or the possibility of more of them, as the US dollar continues to remain well bid. Post the new threat to try to stop the growing momentum of BRICS countries that are now choosing to denominate more of their trade in currencies that are not the US dollar, a stronger US dollar will certainly help the US importers to mitigate the tariff they would have to pay. On the other hand, what US manufacturer is going to want to reshore to the US with its FX strength. Instead, we'll continue to get a lot of rearranging of the globalized trade chairs and not rearranged in the US. Instead, I guess any fresh tariffs would then just be used to protect existing US domestically produced industries but the higher costs to its users would be the offset. For example, the aim at defending US steel and aluminum industries that resulted in higher costs for those that use those materials. Nothing is easily done here, nothing is free.

When it comes to the BRICS countries using yuan or rupee for example to trade, nothing will stop that. While we will not likely see a 'new' currency from them for many years, if ever, they will continue to use their own currencies in greater numbers in the years to come with trade. For example, China will buy more oil from the Saudi's in yuan. The Saudi's will in turn use the yuan to buy EV's, solar panels, and other goods from China. Rinse, repeat with other emerging countries when it comes to other commodities like China buying soybeans from Brazil in yuan and India buying oil from Russia in rupee.

Hurting the euro in particular is the continued economic stagnation being seen in Europe, particularly in Germany and France and with ECB rate cuts where another is expected next week. Also, now the possibility of early elections being called again in France as Marine Le Pen threatens it in response to the Barnier budget.

Also of note is the move in the yen over the weekend, and this is higher vs the US dollar as BoJ Governor Ueda spoke late last week and opened the possibility of another rate increase this month rather than waiting until January. He spoke Thursday for an interview that was released on Saturday to Nikkei news and said with regards to a hike, "We can say it's approaching in the sense that economic data are on track to meet our forecasts." The 10 yr JGB yield rose 3.2 bps overnight to 1.08% as a result. That is just 2 bps from matching the highest level since 2011. The 40 yr yield was unchanged but is at a 16 yr high. What happens in Japan with regards to its liquidity spigot doesn't stay in Japan as seen in August.

Euro

Yen (lower equals higher vs USD)

10 yr JGB Yield

Speaking of the European economy, their November manufacturing PMI index was left unrevised but at 45.2 it remains well below 50 and that is the weakest read since December 2023. Germany is at just 43, France at 43.1 and Italy at 44.5. Spain is the bright spot at 53.1. Not mincing words S&P Global said "These numbers look terrible." And, "By main industrial grouping, it's the capital goods sector which is taking the biggest hit." Expect another ECB rate cut next week as said.

The UK manufacturing PMI was revised to 48 from 48.6 initially, down from 49.9 in October and also the lowest of 2024. This is post Reeves budget and too, "The export climate also remained bleak, as weaker demand from the US, China and EU led to a further drop in new export business...Meanwhile, supply chain worries have intensified as the combination of the Red Sea crisis, port disruptions and border regulation issues led to longer supplier delivery times, input shortages and rising costs. Input price inflation accelerated as a result."

The weak data is helping European bonds with yields dropping but US Treasuries are down, maybe following the selloff in Japan.

All this as US stock market sentiment is getting really stretched on the bull side. The updated Citi Panic/Euphoria index continues to move literally off the charts at .59 from .55 last week with .41 the Euphoria threshold. This follows the Investors Intelligence survey that saw Bulls rise to 61.3 from 60 while Bears fell to just 17.7 from 18.3. That's the highest Bull figure since it hit 64.2 in late July while the Bears are the least since early July. That 43.6 pt spread between the two is above the 40 that I consider extreme. Also, the National Association of Active Investment Managers (NAAIM) 'exposure index' is just below the highs of the year at 98.3. https://naaim.org/programs/naaim-exposure-index/

This all means that those with a short term time horizon should understand that the Bull boat is now loaded up.

On the other hand, the AAII survey, which is hugely fickle and doesn't square with anything else, is showing more subdued sentiment with the Bulls at 37.1 and the Bears at 38.6. I consider that AAII read a real outlier right now that should not be relied upon.

Back to the November PMI's, China's manufacturing PMI rose to 50.3 from 50.1, offset by a slight dip in its non-manufacturing index to exactly 50 from 50.2. The private sector focused Caixin reflected a lift in manufacturing to 51.5 from 50.3 and the services side comes out tomorrow. Caixin said "Demand for consumer goods was particularly strong. External demand bounced back, due partly to some overseas clients upping purchases after the US election, pushing the indicator into positive territory for the first time in four months." So, I'm sure some pull forward of activity ahead of any possible new tariffs.

On prices, "Price levels rose. The upward trend in both input costs and output prices observed in October accelerated in November. Rising prices for raw materials, especially steel, pushed up input costs. Manufacturers were able to pass some of those costs downstream amid the uptick in demand."

We know the two biggest economic challenges in China remain its residential real estate market, which continues to try to find a bottom on volume and prices, and the huge debt that lies at the local government level. Both are being addressed but it takes time, a lot of it. The manufacturing challenges are more just cyclical but we know in some sectors, like those EVs, solar panels and other high valued added things, China is crushing its competition.

Elsewhere in the region with the manufacturing PMI's, they mostly rose. South Korea 50.6 vs 48.3, Taiwan 51.5 vs 50.2, Vietnam 50.8 vs 51.2, Thailand 50.2 vs 50, Malaysia 49.2 vs 49.5, Indonesia 49.6 vs 49.2 and the Philippines 53.8 vs 52.9. Japan's and Australia's were left unrevised at 49 and 49.4 respectively. India's final read was 56.5 vs 57.3 initially and vs 57.5 in October.

Maybe some pull forward here too ahead of any tariffs? S&P Global said on South Korea, "Firms were particularly buoyed by international demand, which rose at the quickest pace for four months." With inflation, "On the price front, input price inflation strengthened for the first time since June to reach a four month high. This did not translate to higher charges however, as manufacturers opted to lower prices again in a big to remain competitive and stimulate further sales growth."

On Taiwan and their export business, "New export order growth was noticeable in being the highest since February 2022. Companies reported stronger sales to Asian, European and North American clients during November." On inflation, "Price and margin pressures also remained apparent, with costs rising again markedly in November but output charges up only modestly."

3:15PM: Fed Board Governor Waller (Voter) speaks on the economic outlook before the American Institute for Economic Research Monetary Conference, "Building a Better Fed Framework," Washington, DC.

4:30PM: Fed Bank of New York President Williams (Voter) participates in a conversation organized by the Queens Chamber of Commerce, East Elmhurst, NY.

Bitcoin is -$2,100 and is approaching $95,000.

I remain short.

Canaccord Genuity raises their year-end 2025 S&P target to 6325 from 5650.

This sort of move tells you more about the forecaster than their forecast.

From Rosie (David Rosenberg):

The "Trump Trade" Tilts

The “Trump Trade” has started to fade. Perhaps not so much in the stock market, which seems to still be placing bets on additional corporate tax rate relief, but (i) the yield on the 10-year Treasury note has sliced below the 200-day moving average and back below the pre-election level, (ii) the mighty U.S. dollar just tied for its steepest weekly loss of the year and about half of the post-election surge has now been unwound, (iii) market-based inflation expectations have stopped going up, and (iv) the big bounce in Bitcoin has been stopped out just below the $100,000 mark. The selection of widely-respected Scott Bessent as Treasury Secretary has gone a very long way towards alleviating concerns that the worst of Trump’s economic policies, especially on foreign trade, are actually going to come to fruition. This was a catalyst we discussed a few weeks ago that would be needed to calm nerves and prompt the sort of move in Treasury yields and the dollar we have recently begun to witness. As for the equity market, it comes down to the famous Bob Farrell refrain that exponentially rising markets always go further than you think (the caveat being that they also never correct by moving sideways).

From my pal, Danielle DiMartino Booth:

The Daily Feather — No Man (or Country) Is an Island

In literary circles, Iceland punches far above its weight on the world stage. The tiny island nation has more writers per capita than anywhere else, with one in ten Icelanders publishing a book in their lifetimes, according to the Guinness Book of World Records. Arguably, the highest regarded Icelandic author is Halldór Laxness, winner of the 1955 Nobel Prize in Literature. In QI’s estimation, his novel, Independent People, is the greatest book you’ve (probably) never read. The plot revolves around stubborn sheep farmer Bjartur, whose sole goal in life is to be self-sufficient. Refusing to bend to any will in pursuit of his goal, while pure grit lifts him from poverty, pride and callousness threaten to destroy the relationships he prizes most, especially that with his daughter, Asta. Equally strong-willed and the sole soul capable of piercing her father’s thick outer shell to reveal his softer side, she and her father are all too frequently at odds. The novel’s central conflict centers on whether their contentiousness can be reconciled before it’s too late. American novelist Jane Smiley says she “can’t imagine any greater delight than coming to Independent People for the first time.” We wholeheartedly concur.

In today’s globalized economy, no country can boast independence from the rest of the world. As with the tango, it takes two to trade. Last week’s release of the Census Bureau’s advance goods trade data for October saw both exports and imports sharply reverse after rising steadily through 2024...

The chart of the day:

* Of a Viking-kind...

At the close of last week's trading, the S&P Short Range Oscillator ripped higher — to 5.55% (from 3.94%).

* Actually at 1 a.m.

Shorted more Tesla TSLA at $352.