Morning Markets
Dec E-Mini S&P 500 futures (ESZ23) are down -0.24%, and Dec Nasdaq 100 E-Mini futures (NQZ23) are down -0.37%.
Stock index futures are moderately lower due to some disappointing corporate earnings results. Also, long liquidation pressure is weighing on the overall market after Monday’s rally. The markets await the minutes of the FOMC meeting from October 31-November 1 later today to see the Fed’s assessment of the economy and the future direction of the Fed’s policy.
Stocks were subdued today after Goldman Sachs sent a note to clients that said the recent rally in stocks increased the risk of “disappointment in the near term” amid persistent concerns about economic growth and inflation.
On the downside for stocks, Best Buy is down more than -4% in premarket trading after reporting Q3 revenue below consensus and cutting its full-year revenue forecast. Also, Lowe’s is down more than -4% after reporting a bigger-than-expected decline in Q3 same-store sales and cutting its full-year adjusted revenue forecast. In addition, Kohl’s is down more than -4% after reporting a bigger-than-expected drop in Q3 same-store sales.
On the positive side, Dick’s Sporting Goods jumped more than +8% after reporting Q3 net sales above consensus and raising its 2024 comparable sales forecast. Also, Agilent rose more than +6% after reporting stronger-than-expected Q4 net income
The US eight Chicago Fed national activity index fell -0.47 to a seven-month low of -0.49, weaker than expectations of zero.
The markets are discounting a 0% chance for a +25 bp rate at the next FOMC meeting on December 12-13 FOMC and a 2% chance for that +25 bp rate at the next FOMC meeting on December 30-31 on January 2024. The markets are then discounting a +31% chance for a -25 bp rate cut at the March 19-20, 2024, FOMC meeting and a 76% chance for that same -25 bp- rate cut at the April 30-May 1, 2024 FOMC meeting.
US and European government bond yields are lower today. The 10-year T-note yield is down -1.2 bp at 4.408%. The 10-year German bund yield is down -2.6 bp at 2.585%. The 10-year UK gilt yield is down -2.3bp at 4.101%.
Foreign stock markets are lower. The Euro Stoxx 50 is down -0.22%. China’s Shanghai Composite Index closed down -0.01%. Japan’s Nikkei Stock Index closed down -0.10%.
The Euro Stoxx 50 is moderately lower today. Weakness in bank stocks is weighing on the overall market, led by a -4% decline in Banca Monte del Paschi di Siena SpA after Italy sold about 25% of its stake for about 920 million euros ($1 billion) as part of its plan. divest from the bailed out lender. Also, MorphoSys sank -20% after it announced that the results of a trial of its pelabresib drug to treat myelofibrosis were “mixed.” On the positive side, European carmakers rallied after Eurozone new car registrations rose for the fifteenth consecutive month. Also, mining stocks gained as iron ore prices rose to a 9-month high on optimism over China’s latest stimulus.
Comments from ECB Governing Council member Simkus suggest he prefers to keep ECB policy steady when he said, “There is no reason to talk about a further hike this December, and market expectations that there will be ECB interest rate cuts in a few months , are too optimistic in my opinion.”
Eurozone Oct new car registrations rose +14.6% y/y to 855,000 units, the fifteenth consecutive monthly registration increase.
China’s Shanghai Composite fell back from a 5-week high today and closed little changed. The strength of Chinese real estate today supported the general market after authorities drafted a list of 50 properties that would be eligible for a range of financing as the government looks to support the ailing property sector. Also, Bloomberg News reported that China plans to provide at least one trillion yuan worth of low-cost financing to certain affordable housing units to help the market.
The yuan rose to a 3-3/4-month high against the dollar today on the back of the new government stimulus measures. However, the Shanghai Composite gave up all of its gains as Chinese bank stocks retreated on a report that the PBOC is urging lenders to limit the amount of new loans they issue from early 2024 to grapple with shrinking profit margins and rising bad loans. For China’s biggest banks, net interest margins fell to a record low of 1.74% at the end of the first half of 2023, below the 1.8% industry threshold considered necessary to maintain a reasonable amount of profit.
Japan’s Nikkei Stock Index closed slightly lower today. Strength in the yen today weighed on exporting stocks and weighed on the general market as the yen rose to a 2-1/4 month high against the dollar. Stock losses were limited as Japanese tech stocks moved higher on carryover support from Monday’s rally in US tech stocks. Also, a decline in Japanese government bond yields supported stocks after the 10-year JGB bond yield fell to a 2-1/4-month low today at 0.695%.
Premarket US stock transferors
Best Buy (BBY) fell more than -4% in premarket trading after reporting Q3 revenue of $9.76 billion, below consensus of $9.90 billion, and cut its full-year revenue forecast to $43.1 billion – $43.7 billion from a previous forecast of $43.8 billion-$44.5 billion.
Lowe’s (LOW) fell more than -4% in premarket trading after reporting a -7.4% drop in Q3 same-store sales, weaker than the -4.9% consensus, and lowered its full-year adjusted revenue forecast to a decline. from -5% of front view from 02% to -4%.
Kohl’s ( KSS ) fell more than -4% in premarket trading after reporting Q3 same-store sales fell -5.5%, a bigger decline than the consensus of -3.45%.
Analog Devices (ADI) fell more than -2% in premarket trading after forecasting Q1 adjusted EPS of $1.60-$1.80, below the $1.92 consensus.
Moderna ( MRNA ) slid more than -2% in premarket trading after Reuters reported that BioNTech said the European Patent Office had declared invalid an mRNA patent invoked by Moderna in a lawsuit.
Jacobs Solutions (J) fell more than -4% in premarket trading after forecasting 2024 adjusted Ebitda of $1.53 billion – $1.60 billion, weaker than the $1.61 billion consensus.
Dick’s Sporting Goods (DKS) jumped more than +8% in premarket trading after reporting Q3 net sales of $3.04 billion, above the consensus of $2.95 billion, and raised its 2024 comparable sales forecast to +0.5% to +2.0% from + previous view of 0% to + 2.0%, the midpoint above the consensus of + 1.02%.
Hibbett (HIBB) rose more than +13% in premarket trading after reporting Q3 EPS of $2.05, well above the consensus of $1.18, and raising its 2024 EPS forecast to $8.00-$8.30 from a previous estimate of $7.00- $7.75, stronger than. the $7.27 consensus.
Symbotic (SYM) soared more than +19% in premarket trading after reporting Q4 revenue of $391.9 million, well above consensus of $307 million, and forecast Q1 revenue of $350 million – $370 million, above consensus of $ 346 million.
Agilent (A) climbed more than +6% in premarket trading after reporting Q4 net income of $1.69 billion, better than the consensus of $1.67 billion.
Burlington Stores (BURL) rallied more than +10% in premarket trading after reporting Q3 comparable sales rose +6.00%, above the consensus of +5.88%.
Medtronic Plc (MDT) rose more than +2% in premarket trading after reporting Q2 adjusted EPS of $1.25, stronger than the consensus of $1.18.
Cloudflare (NET) gained more than +1% in premarket trading after Oppenheimer upgraded the stock to outperform with a price target of $85.
Earnings Reports (11/21/2023)
Analog Devices Inc (ADI), Autodesk Inc (ADSK), Best Buy Co Inc (BBY), Burlington Stores Inc (BURL), Dick’s Sporting Goods Inc (DKS), HP Inc (HPQ), Jacobs Solutions Inc (J), Kohl’s Corp (KSS), Lowe’s Cos Inc (ALBA), Medtronic PLC (MDT), Nordstrom Inc (JWN), NVIDIA Corp (NVDA).
More Stock Market News from Barchart
As of the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. For more information, please see Barchart’s Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.