December 4th Market Overview

Happy Thursday

Not much movement today as the market waits on the Fed. Small caps are the exception, Russell beating the major indexes again.

Jobless claims came in at 191,000, the lowest in three years, which contradicts all the recent labor market weakness headlines.

My take, this is Thanksgiving noise, but it does put the Fed in an interesting spot heading into next week's decision. Do they cut into stronger data or wait? (likely cut)

Let's dig in...

Today's Big Picture

Labor Market Confuses Everyone J
obless claims dropped to 191,000, the lowest since September 2022. While Thanksgiving seasonality plays a role, this contradicts recent fears of a hiring freeze. The Fed now has a tricky data point right before their December decision.

Salesforce Proves AI Sales Are Real 
Salesforce $CRM beat expectations and raised its full-year revenue outlook. The company signed 1,500 more deals for its new AI agent platform than last quarter. This suggests enterprise customers are finally moving from testing AI to actually paying for it.

Japanese Rates Hit 17-Year Highs 
The 10-year yield in Japan climbed to levels not seen since 2007. Bank of Japan Governor Ueda hinted they aren't sure how high rates need to go. Rising rates there could pull capital back from U.S. markets as domestic yields become attractive.

Market Overview

Index Performance

Stock Spotlight

Meta Platforms $META ( ▲ 3.43% ) 
rallied after Bloomberg reported Zuckerberg plans to cut the metaverse division by nearly 30% in 2026. Investors love seeing cost discipline return to Reality Labs.

Dollar General $DG ( ▲ 14.01% ) 
lifted its full-year outlook after beating estimates. Traffic drove same-store sales higher.

Kroger $KR ( ▼ 4.62% ) 
dropped after swinging to a $1.32 billion quarterly loss. Revenue missed and same-store sales growth came in light at 2.6% versus expectations for 2.9%.

Big Name Updates

Salesforce $CRM ( ▲ 3.66% ) 
said its Agentforce AI product hit $540 million in annualized recurring revenue, still less than 2% of total revenue. The company raised fiscal 2026 revenue guidance to between $41.45 billion and $41.55 billion.

Snowflake $SNOW ( ▼ 11.41% ) 
reported revenue growth of 29%, down from 32% last quarter. The company struck a $200 million AI deal with Anthropic to make Claude models available on its platform.

Nvidia $NVDA ( ▲ 2.12% ) 
CEO Jensen Huang met with President Trump to discuss chip export restrictions. He argued against the GAIN AI Act, which would force chipmakers to prioritize U.S. buyers. Huang said he has no clue if China would even accept H200 chips after rejecting the cut-down H20.

Amazon $AMZN ( ▼ 1.41% ) 
is preparing to pull its parcels from USPS by end of 2026, stripping the Postal Service of more than $6 billion a year in revenue.

Other Notable Company News

Five Below $FIVE ( ▲ 3.23% ) 
beat estimates with earnings of 68 cents per share versus expectations of 24 cents.

Hims & Hers $HIMS ( ▲ 7.96% ) 
expanded into Canada after buying Livewell. The move sets them up for generic semaglutide sales when Novo Nordisk's Canadian patent expires next year.

Alaska Air $ALK ( ▲ 4.3% ) 
cut earnings guidance to about 10 cents from at least 40 cents due to an IT outage, shutdown-driven flight cuts, and higher fuel costs.

New America Acquisition $NWAXU ,
the SPAC backed by Eric and Donald Trump Jr., rose in its trading debut.

Sector Watch

Bond Market

The 10-year Treasury sits at 4.11%. Japan's 10-year hitting 1.941%, the highest since 2007, is putting upward pressure on global rates. Tomorrow brings the delayed September PCE reading, the Fed's preferred inflation gauge and the last data point before their December 10 decision.

Policy Watch

Fed 
87% odds of a quarter-point cut next Wednesday. The shutdown delayed both October and November jobs reports, so the Fed is deciding with incomplete labor data.

Trade & Geopolitics

• Canadian PM Mark Carney meets Trump on Friday, first time since Trump killed trade talks in October

• Bond investors privately warned Treasury against Kevin Hassett as Fed chair, per Financial Times. They're worried he'd cut rates to please Trump regardless of inflation

• U.S. holding back sanctions on China's Ministry of State Security despite Salt Typhoon telecom hack. Protecting the trade truce and rare earth access ahead of April's Beijing visit

Chip Policy 
Lawmakers considering the GAIN AI Act, which would force Nvidia $NVDA to sell to U.S. buyers before foreign customers. Huang is fighting it hard.

Japan

• BOJ Governor Ueda said Thursday he's uncertain how many more hikes are needed

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What to Watch

Friday PCE Report 
September PCE drops at 10 a.m. Eastern. Economists expect annual PCE at 2.8%, up slightly, with core at 2.9%. Anything above 3% could shake rate cut odds.

Consumer Sentiment 
University of Michigan's December survey hits Friday. Inflation expectations matter more than the headline number.

HPE Earnings Today
Hewlett Packard Enterprise $HPE reports after the close. After Salesforce's AI traction and Snowflake's slowdown, HPE's server demand commentary will show if infrastructure spending is holding up.

Natural Gas 
January futures hit $5.046 Thursday, highest since late December 2022. Up nearly 50% in Q4 on cold weather. Watch if this holds or if mild forecasts trigger profit-taking.

Thanks for reading 🙂

- John

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