Stocks are sinking to start December on both tariff concerns and weaker than expected data. Amid the threat of retaliation from China over the Hong Kong human rights bill, angst has picked up again on today's news that President Trump is putting back tariffs on steel and aluminum from Argentina and Brazil due to their currency devaluations. Additionally, Commerce Secretary Wilbur Ross repeated to Fox News that tariffs on China would be increased on December 15 if a deal is not reached.
ECONOMIC EVENTS: In the U.S., Markit's manufacturing PMI rose to 52.6 in the final November print, up from the 52.2 preliminary reading and the 51.3 figure for October. However, the ISM manufacturing index slipped 0.2 points to 48.1 in November, missing expectations for a pop over the 50 mark and and leaving a four-month string of readings in the sub-50 contraction zone. Construction spending undershot estimates with a 0.8% October drop that was spread across components.
In China, the official National Bureau of Statistics PMIs for November came in better than
expected for both manufacturing, at 50.2 versus the consensus forecast of 49.5, and non-manufacturing, at 54.4 versus 53.1. The Caixin manufacturing PMI was also firmer than expected at 51.8 versus the consensus forecast of 51.5.
In Europe, the final Eurozone manufacturing PMI for November was revised up to 46.9 from a prior reading of 46.6.
COMPANY NEWS: The Wall Street Journal's Sarah Nassauer reported, citing data from ShopperTrak, that foot traffic to U.S. stores fell about 6.2% on Black Friday as more people ordered online or went to stores on Thanksgiving Day, when visits increased 2.3%. She also noted that Adobe Analytics, which tracks hundreds of retail websites, said online sales reached $7.4B on Black Friday.
Shares of Roku (ROKU) have plunged 16% at midday after the stock was downgraded to Underweight at Morgan Stanley, as analyst Benjamin Swinburne tells investors that he thinks the company's revenue and gross profit growth could slow "meaningfully" in 2020.
Shares of Sprint (S) are down 5% near noon following the release of pre-trial briefs from the state attorneys general who are challenging its planned merger with T-Mobile (TMUS). After reading the pre-trial briefs, Cowen macro analyst Paul Gallant believes the states are likely to prevail in their case to block the proposed tie-up, he told investors. The trial starts next Monday, December 9, and the analyst pegs the chances of the states winning at 60%.
MAJOR MOVERS: Among the noteworthy gainers was Kodiak Sciences (KOD), which surged 69% after it announced the sale of future royalties on KSI-301 for $225M.
Also higher was Puma Biotechnology (PBYI), which rose 9% after it amended its license agreement with Pierre Fabre.
Among the notable losers was Just Energy (JE), which slid 14% after it announced the suspension of its dividend on Series A Preferred Shares.
Also lower was Apache (APA), which fell 13% after it provided an exploration update on its first exploratory well in Block 58 offshore Suriname. Credit Suisse analyst William Featherston said he believes expectations for this well are exceedingly high, so he thinks "no news will likely be seen as bad news."
INDEXES: Near midday, the Dow was down 190.31, or 0.68%, to 27,861.10, the Nasdaq was down 88.99, or 1.03%, to 8,576.49, and the S&P 500 was down 20.68, or 0.66%, to 3,120.30.