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Futures mostly higher, Tesla reveals Cybertruck pricing - what's moving markets

Published Dec 01, 2023 05:34
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Investing.com -- Traders look ahead to the start of the final month of trading in 2023 following a positive November for stocks on Wall Street. Elsewhere, Tesla (NASDAQ:TSLA) reveals a price tag for the cheapest model of its futuristic-looking Cybertruck that is well above boss Elon Musk's initial estimates, and a private survey shows Chinese manufacturing activity unexpectedly expanded last month.

1. Futures inch mostly higher; Powell appearances ahead

U.S. stock futures edged broadly higher on Friday after equities on Wall Street finished off their best month since 2022 in the previous session (more below).

By 04:59 ET (09:59 GMT), the Dow futures contract had added 80 points or 0.2%, S&P 500 futures had gained 7 points or 0.1%, and Nasdaq 100 futures were mostly unchanged.

In the last day of trading of November, the 30-stock Dow Jones Industrial Average jumped by 1.5% to its highest close since January of last year and the benchmark S&P 500 advanced by 0.4%, while the tech-heavy Nasdaq Composite dipped by 0.2%. Both the Dow and S&P are on track to post a winning week, although the Nasdaq is on pace to snap four consecutive positive weeks.

Investors were pouring through data on Thursday that showed the Federal Reserve's preferred inflation gauge cooled in October. The figures helped to bolster bets that the U.S. central bank may have completed its long-standing campaign of interest rate hikes.

Heading into the start of a new month of trading, markets will be keeping an eye on statements from Fed Chair Jerome Powell, who is slated to participate in two separate discussions on Friday. 

2. U.S. stocks rally in November

Throughout November, hopes that the Fed's tightening cycle could be over boosted U.S. equities and relieved some of the upward pressure on Treasury yields seen earlier in the year.

Keen to corral red-hot inflation back down to its 2% target, the Fed has elevated interest rates to more than two-decade highs, a move that has threatened to weigh on risk assets.

Investors subsequently welcomed the prospect of loosening financial conditions last month, with markets even pricing in a possible rate cut by the Fed as soon as May next year.

The S&P and Nasdaq registered their biggest monthly percentage increase since July 2022, while the Dow soared to its best month since October 2022.

Support for stocks came from U.S. Treasury yields, which saw their best month since 2011, Reuters reported. The benchmark 10-year note in particular fell by 52.2 basis points in November, recovering from a spike in October that pushed yields to a 16-year peak of 5.02%. Yields typically move inversely to prices.

3. Tesla unveils Cybertruck pricing as deliveries begin

Tesla has revealed a starting price of nearly $61,000 for its highly-anticipated Cybertruck, as the electric carmaker started deliveries of the science-fiction-inspired pickup.

The rear-wheel drive base model of the shiny stainless steel Cybertruck will cost $60,990, more than 50% over what Tesla Chief Executive Elon Musk had first touted in 2019. Speaking at a launch event in Texas, Musk claimed the Cybertruck is "a better truck than a truck while also being a better sports car than a sports car."

Meanwhile, two other versions of the vehicle -- the all-wheel drive and Cyberbeast -- will come with price tags of $79,990 and $99,990, respectively.

Shares in Tesla were slightly lower in premarket U.S. trading on Friday.

4. Chinese manufacturing activity unexpectedly expands in November - Caixin data

Chinese factory activity unexpectedly moved back into expansion territory in November, a private survey showed on Friday, as a mild increase in domestic demand helped offset a persistent decline in overseas orders.

The Caixin manufacturing purchasing managers' index (PMI) rose to 50.7 in November, topping expectations for a reading of 49.3, and improving sharply from 49.5 in the prior month.

A reading above 50 indicates expansion, with the Caixin survey now coming back into growth after a surprise contraction in October.

The figure stood in contrast to government PMI data released on Thursday, which showed a bigger-than-anticipated decline in manufacturing activity.

But the Caixin survey differs from the government data in its scope, focusing more on smaller, private enterprises as opposed to the bigger, state-run firms covered by the official survey. Investors usually use both surveys to get a broader picture of the Chinese economy.

5. Oil slips amid skepticism over OPEC+ output reductions

Oil prices retreated Friday, adding to the previous session’s losses, in a sign that markets were skeptical of the efficacy of fresh voluntary crude output cuts agreed by OPEC+ producers.

By 04:57 ET, the U.S. crude futures traded 0.2% lower at $75.83 a barrel, while the Brent contract dropped 0.2% to $80.68 per barrel. Both contracts shed over 6% each in November.

The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, agreed on Thursday to a voluntary output reduction of 900,000 barrels per day in addition to extending 1.3 million barrels per day in production slashes already in place.

Unusually, however, OPEC officials said that the cuts will be announced by individual members and not by the secretariat as a whole, an announcement that reportedly fed concerns over fraught relations within the coalition. The OPEC+ meeting was initially slated to occur in person last Sunday, but was postponed and shifted online following internal disagreements over production targets, reports said.

Futures mostly higher, Tesla reveals Cybertruck pricing - what's moving markets
 

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