December S&P 500 results (ESZ23) up +0.02%, and December Nasdaq 100 E-Mini futures (NQZ23) is down -0.09% this morning as market participants anticipated a new round of US economic data and speeches from Fed officials.
In Wednesday’s trading session, Wall Street’s major averages ended higher, with the benchmark S&P 500 and blue-chip Dow posting 2-1/2-month highs and the tech-heavy Nasdaq 100 notching a 3-3/4-month high maximum Target Corporation (TGT) rose more than +17% and was the top percentage gainer on the S&P 500 after the big-box retailer reported upbeat Q3 results. Also, Sirius XM Holding Inc (SIRI) climbed more than +6% after Warren Buffett’s Berkshire Hathaway revealed an investment in the audio entertainment company. In addition, VF Corporation (VFC) soared over +14% after JPMorgan Chase upgraded the stock to Neutral from Underweight. On the bearish side, TJX Companies Inc (TJX) fell more than -3% after the company offered disappointing guidance for the all-important holiday quarter.
Economic data on Wednesday showed that the US October producer price index came in at -0.5% m/m and +1.3% y/y, weaker than expectations of +0.1% m/m and +1.9% y/y. Also, US core PPI decreased to +2.4% y/y in October from +2.7% y/y in September, weaker than expectations of +2.7% y/y. In addition, US October retail sales fell -0.1% m/m, a smaller decline than expectations of -0.3% m/m. Finally, the US NY Empire State manufacturing index, a measure of manufacturing activity in New York State based on current business conditions, rose to a 7-month high of 9.10 in November, stronger than expectations of -2.80.
“Given the strong consumer spending – which is not surprising given the employment picture – it is only reasonable to assume that corporate profits will continue to grow, and this should only add fuel to the fire for the year-end rally. Inflation, for now, is coming back down, and the economy, currently, continues to grow at a robust pace, so the only logical direction for stocks is higher,” said Chris Zaccarelli, chief investment officer of the Independent Advisor Alliance.
Meanwhile, Richmond Fed President Thomas Barkin said Wednesday that he remains unconvinced that inflation is definitely heading toward the central bank’s 2% target despite acknowledging “real progress” in curbing the pressures in recent months. “I’m just not convinced that inflation is on any smooth glide path to 2%,” Barkin said.
US futures prices have a 100% chance of no hike at the December monetary policy meeting and a 100% chance of no hike at the January FOMC meeting.
In the revenue, famous companies like Walmart (WMT), Applied Materials (AMAT), Copart (CPRT), and Ross Stores (ROAST) are set to report their quarterly earnings today.
Today, all eyes are focused on the US Philadelphia Fed manufacturing index in a few hours. Economists, on average, expect the Philadelphia Fed’s November manufacturing index to come in at -9.0, compared to the previous value of -9.0.
US Export and Import Price Indices for October will also be in focus today. Economists predict that the export price index will be at -0.5% m/m and the import price index stood at -0.3% m/m.
US Industrial Production data will be reported today. Economists expect this figure to stand at -0.3% m/m in October, compared to the previous number of +0.3% m/m.
US Manufacturing Production data is due today. Economists expect the October figure to be -0.3% m/m, compared to the previous value of +0.4% m/m.
US data on Initial Jobless Persons will also be reported today. Economists estimate this figure at 220K, compared to last week’s value of 217K.
In addition, market participants will watch a series of speeches from Fed officials Cook, Williams, Waller and Mester.
In the bond markets, US 10-year yields are at 4.502%, down -0.75%.
Euro Stoxx 50 futures are down -0.14% this morning as enthusiasm for a possible dovish pivot from central banks has waned, with investor focus shifting to the Eurozone inflation print scheduled for release on Friday. Services stocks topped Thursday while energy stocks lost ground. Meanwhile, European Central Bank president Christine Lagarde is scheduled to deliver a speech later in the session. In corporate news, Burberry Group Plc (BRBY.LN) plunged more than -8% after its warning that this year’s revenue target may be unattainable. Also, Hellofresh Se (HFG.D.DX) fell more than -22% after the German meal kit maker cut its full-year core profit guidance and narrowed its revenue growth forecast. At the same time, Hotel Chocolat Group Plc (HOTC.LN) increased about +164% after Mars Inc. agreed to buy the company for 534 million pounds ($662 million).
European economic data is mostly blank on Thursday.
Asian stock markets closed in the red today. China’s Shanghai Composite Index (SHCOMP) closed down -0.71%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.28%.
China’s Shanghai Composite closed lower today as market participants remained unimpressed by the results of the Xi-Biden summit, and investor sentiment was further dampened by data revealing prolonged weakness in the property sector. Official data showed on Thursday that new home prices in China experienced a fourth consecutive monthly decline in October, indicating continued weakness in the country’s real estate sector. Based on this, Hong Kong-listed property stocks plunged on Thursday. Tech giants listed in Hong Kong also fell. Meanwhile, US President Joe Biden and Chinese leader Xi Jinping agreed on Wednesday to open a presidential hotline, resume military-to-military communications and curb fentanyl production. On the positive side, China’s state planner announced Thursday its intention to step up efforts to attract foreign investment and improve domestic consumption among low- and middle-income groups, signaling increased support from Beijing for the economy.
Japan’s Nikkei 225 stock index closed lower today, snapping a three-day winning streak as investors decided to lock in profits after a significant rally in the previous session. Losses in non-cyclical consumer, health care and technology stocks led the overall market lower. Data from the Ministry of Finance showed on Thursday that Japanese exports experienced growth for the second consecutive month in October. However, the pace of growth has slowed significantly, mainly attributed to the decline in shipments of chips and steel to China, as the trade-dependent economy struggles with the impact of weakening external demand. In corporate news, Recruit Holdings Co Ltd is up over +9% after ValueAct Capital Management bought a stake in the company. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed +0.97% to 18.75.
Japan’s October Trade Balance was reported at -662.5B, stronger than expectations of -735.7B.
Japan’s October Exports stood at +1.6% y/y, stronger than expectations of +1.2% y/y.
Japan’s October Imports came in at -12.5% y/y, weaker than expectations of -12.2% y/y.
The Japanese September Core Machinery Orders arrived at +1.4% m/m and -2.2% y/y, stronger than expectations of +0.9% m/m and -3.6% y/y.
Premarket US stock transferors
Cisco Systems Inc (CSCO) plunged more than -10% in premarket trading after the Internet giant cut its full-year revenue guidance.
Palo Alto Networks Inc (PANW) slipped more than -5% in premarket trade after the company cut its FY24 billings forecast.
Advance Auto Parts Inc (AAP) fell more than -2% in premarket trading after BofA downgraded the stock to Underperform from Neutral.
Maxeon Solar Technologies Ltd (MAXN) slipped more than -3% in premarket trading after the company reported a bigger-than-expected Q3 loss and lowered its FY23 revenue guidance.
Plug Power Inc (PLUG) fell more than -3% in premarket trading after Citi downgraded the stock to Neutral from Buy.
StoneCo Ltd (STNE) gained more than +1% in premarket trading after BofA upgraded the stock to Buy from Neutral.
You can see more premarket shares here
Today’s US Earnings Spotlight: Thursday – November 16
Walmart (WMT), Applied Materials (AMAT), Copart (CPRT), Ross Stores (ROST), ZTO Express Cayman (ZTO), Warner Music (WMG), Williams-Sonoma (WSM), Dolby Labs (DLB), Woodward ( WWD), Globant SA (GLOB), Bath & Body Works (BBWI), Berry Global (BERY), Post (POST), Gap (GPS), UGI (UGI), Macy’s Inc (M), Spire (SR), PagSeguro Digital (PAGS), ESCO Technologies (ESE), Brady (BRC), Arcos Dorados (ARCO), Borr Drilling (BORR), Matthews (MATW), Dole (DOLE), Beazer Homes USA (BZH), Stratasys Ltd (SSYS) , BrightView Holdings (BV), Shoe Carnival (SCVL), Gogoro (GGR), Haynes (HAYN).
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As of the date of publication, Oleksandr Pylypenko 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.
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