Stocks kicked off December on a down note, weighed down by both tariff concerns and weaker than expected domestic 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 reinstating 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 trade 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) dropped 15.15% 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) fell 3% 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 72.5% after it announced the sale of future royalties on KSI-301 for $225M. Also higher were U.S. Steel (X), AK Steel (AKS), and Timkensteel (TMST), which gained a respective 4.2%, 4.7%, and 4.1% after President Trump said that he is restoring tariffs on steel and aluminum from Brazil and Argentina.
Among the notable losers was Crowdstrike (CRWD), which slid 5.2% after Baird analyst Jonathan Ruykhaver cut his price target on the shares to $65 from $75, saying he sees potential pressure from the expiration of the company's lockup period on December 9. Also lower was Ollie's Bargain Outlet (OLLI), which fell 9.8% after the unexpected passing of CEO Mark Butler.
INDEXES: The Dow fell 268.37, or 0.96%, to 27,783.04, the Nasdaq lost 97.48, or 1.12%, to 8,567.99, and the S&P 500 declined 27.11, or 0.86%, to 3,113.87.