Monday, December 2, 2024

Both the S&P 500 and the Nasdaq indexes have closed Monday’s trading session at new market highs. The S&P opened the day slightly up and kept steady: +14 points to 6047. The Nasdaq, which outperformed the other major indexes on the day for its best trading session in nearly as month, grew +185 points to 19,403. The small-cap Russell 2000 also looked ready to set a new all-time closing high, but petered out in the final minutes of the session.

The Dow sank early today and could not gain traction. It closed down -128 points, or -0.29%. The blue-chip index is flat over the past five trading days, but +7% over the past month.

Manufacturing, Construction Data Better than Expected

This morning after the open, S&P final U.S. Manufacturing PMI and ISM Manufacturing reports for November were released, and both outperformed expectations. For the S&P side, +49.7% was nearly a full percentage point ahead of the +48.8% expected, and even better than the downwardly revised +48.5% reported for the previous month. ISM posted +48.4%, nearly 200 basis points better than the unrevised +46.5% for last month.

Neither print is yet at the 50 mark, however (though the S&P came close). This means both major manufacturing reports are still showing some contraction; they haven’t been above 50 since last June. Though today’s numbers are the closest to 50 they’ve been since then.

Construction Spending, for October this time, doubled expectations to +0.4% from +0.2% estimated, and even higher than the unrevised +0.1% reported for September. This is also the highest print we’ve seen on this metric since last April.

Zscaler Posts Q1 Earnings Beat

Cloud-based security firm Zscaler ZS kept its perfect streak of no earnings misses going back to its 2018 IPO. Earnings of 77 cents per share easily outpaced the 63 cents expected (and beat year-ago earnings by a solid dime). Revenues of $628 million beat the $605 million analysts were anticipating. 

Billings were up in the quarter, and the company has now surpassed half a trillion daily transactions. Guidance was also tweaked higher across the board. Yet shares of Zscaler are plummeting in after-hours trading, -12%. We don’t see a lot of blemishes on this report at first glance, and the stock has not grown expensive this year. It currently carried a Zacks Rank #3 (Hold) with a Value - Growth - Momentum score of C.

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