Tuesday morning arrived with all the excitement of a lukewarm cup of coffee. Traders are on edge, eagerly awaiting the October job openings data, a mere appetizer before the main course—the November jobs report—arrives on Friday. The Labor Department's Job Openings and Labor Turnover Survey is expected to show a modest increase to 7.51 million from September's 7.443 million. It's the highlight of today's economic calendar, though "highlight" might be overstating it.

Meanwhile, Asian and European markets are enjoying a pleasant shade of green. The S&P 500 is barely in the black, while the Nasdaq and Dow Jones are each as flat as a pancake in premarket trading. Adding some spice to the day are speeches from Federal Reserve luminaries, including Governor Adriana Kugler and Chicago Fed President Austan Goolsbee.

Western equity markets are on a roll so far in 2024. The S&P 500 has hit a high for the 54th time this year. Yes, you read that right—54 times. The US equity market is like the Energizer Bunny, just keeps going and going. Ruchir Sharma's article in yesterday's Financial Times, titled ‘The mother of all bubbles’, is a must-read. Sharma argues that despite America's political circus, global investors are showering the US financial markets with unprecedented confidence, leading to a historic overvaluation of equities and the dollar. The US now makes up nearly 70% of the MSCI World Index, a stark contrast to 30% in the 1980s. The valuation gap between US equities and the rest of the world is at an all-time high. Sharma's observation that "while most observers believe the world is increasingly multipolar, investors believe it is increasingly unipolar" is particularly striking. "Thoroughly dominating the mind space of global investors, America is over-owned, overvalued and overhyped to a degree never seen before. As with all bubbles, it is hard to know when this one will deflate, or what will trigger its decline."  If you haven't read it yet, do yourself a favor.

While Wall Street speeds ahead in a Ford Mustang, Europe is cruising along in a Honda Civic. Political jitters in France are causing some unease. The potential collapse of the Barnier government on a motion of censure is creating a cautious atmosphere. It's not a done deal, but things aren't looking rosy unless some last-minute negotiations happen before the votes on Wednesday or Thursday.

In other news, the odds of a Fed rate cut in December have jumped from 52.3% a week ago to 75.4% today. Fed Governor Christopher Waller's support for monetary easing at the December 17-18 meeting has naturally boosted these odds. Waller, a "mini hawk" in the Fed's aviary, is slightly less dovish than his peers. His opinion carries weight, especially with Fed Chair Jerome Powell set to speak tomorrow after the US market closes. The growing likelihood of a rate cut has put some pressure on the dollar, which has slipped a bit.

The Asia-Pacific region is taking cues from the US. In China, indices rallied after the latest US restrictions on the Chinese microelectronics industry were announced. Observers had braced for harsher measures, so there was a sigh of relief. The Hang Seng and CSI300 indices, which started the day in the red, turned positive. Bloomberg also reported a rumor about a major economic conference organized by the Chinese Communist Party on December 11 and 12. The tech stock rebound helped Tokyo gain 2% this morning, while Seoul rose 1.8% and Taipei 1.3%. Sydney and Mumbai edged up by 0.5%. Europe's leading indices are slightly up, with the Stoxx Europe 600 rising 0.5%.

Economic highlights:

The JOLTS survey of monthly job openings is today's main indicator. The full calendar is here.

In corporate news:

  • Apple is embroiled in multiple legal challenges including a UK class action over App Store commissions, allegations of employee privacy violations, and workplace restrictions, alongside a reported $1 billion investment commitment to Indonesia and integrating Apple Pay with Coinbase for crypto transactions.
  • A Delaware judge ruled against reinstating Elon Musk's $56 billion compensation package, while Tesla faced a 4.3% drop in China-made electric vehicle sales, yet shares rose following positive digital shopping trends and a stock upgrade from Roth, amidst settling lawsuits with JPMorgan Chase and launching a new Tesla app for the Apple Watch.
  • European equity markets are up, particularly in France, while BlackRock's acquisitions of HPS Investment Partners and data provider Preqin face regulatory scrutiny from the UK's Competition and Markets Authority.
  • Intel CEO Pat Gelsinger's departure, whether termed as retirement or ouster, has cast uncertainty on the company's recovery strategy, despite his $12 million payout and the subsequent rise in tech stocks, as the company appoints interim co-CEOs.
  • Zscaler reported strong Q1 earnings and revenue growth, surpassing estimates, provided optimistic financial guidance for FY 2025, and announced the retirement of CFO Remo Canessa, although its shares still fell.
  • Honeywell has reduced its fourth-quarter and full-year financial forecasts and adjusted its 2024 earnings and sales projections downward due to its agreement to supply advanced aviation technology to Bombardier, negatively affecting its stock performance.
  • Microsoft is facing a 1 billion pound antitrust lawsuit in the U.K. over allegations that it imposes excessive licensing fees on customers using rival cloud software services, amidst other news of tech stock gains and internal share sales by a Microsoft executive.

Analyst recommendations:

  • Alphabet Inc.: Baptista Research upgrades to buy from outperform with a target price raised from USD 207.90 to USD 208.
  • Applied Materials, Inc.: President Capital Management Corp downgrades to neutral from buy with a target price reduced from USD 290 to USD 200.
  • Axon Enterprise, Inc.: Morgan Stanley upgrades to overweight from equal weight with a price target raised from USD 500 to USD 700.
  • Citigroup Inc.: Keefe Bruyette & Woods upgrades to outperform from market perform with a price target raised from USD 70 to USD 82.
  • Crane Company: Stifel downgrades to hold from buy with a target price of USD 176.
  • Eqt Corporation: RBC Capital upgrades to sector perform from not rated with a target price of USD 49.
  • Fedex Corporation: Bernstein downgrades to market perform from outperform with a price target reduced from USD 337 to USD 316.
  • Intuitive Surgical, Inc.: Mirae Asset Securities downgrades to hold from accumulate with a target price raised from USD 504 to USD 550.
  • Kroger Co. (The): Jefferies upgrades to buy from hold with a price target raised from USD 54 to USD 73. 
  • Parker-Hannifin Corporation: Stifel downgrades to hold from buy with a target price of USD 691.
  • Reddit, Inc.: Baptista Research downgrades to hold from outperform with a price target raised from USD 69.30 to USD 155.80.
  • Ross Stores, Inc.: Baptista Research downgrades to hold from outperform with a target price reduced from USD 173.30 to USD 171.30.
  • State Street Corporation: Keefe Bruyette & Woods upgrades to outperform from market perform with a price target raised from USD 105 to USD 120.
  • Synchrony Financial: Wells Fargo upgrades to overweight from equalweight with a price target raised from USD 60 to USD 85.
  • Bill Holdings, Inc.: Baird maintains a neutral recommendation with a price target raised from 74 to USD 100.
  • Block, Inc.: President Capital Management Corp maintains its buy recommendation and raises the target price from USD 86 to USD 109.
  • The Goldman Sachs Group, Inc.: Keefe Bruyette & Woods maintains its outperform rating and raises the target price from USD 570 to USD 686.
  • Wells Fargo & Company: Piper Sandler & Co maintains a neutral recommendation with a price target raised from USD 62 to USD 75. 
  • Ashtead Group Plc: RBC Capital upgrades to outperform from sector perform with a price target raised from GBX 5200 to GBX 7450.
  • Asos Plc: AlphaValue/Baader Europe downgrades to reduce from add with a price target raised from GBX 394 to GBX 401.
  • Currys Plc: Deutsche Bank downgrades to hold from buy with a target price reduced from GBX 95 to GBX 85.
  • Discoverie Group Plc: Shore Capital upgrades to hold from sell.
  • Persimmon Plc: Citi upgrades to buy from neutral with a price target reduced from 15.40 to GBP 14.50.