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Stock Index Futures Tread Water Ahead of U.S. JOLTs Report, Alphabet Earnings on Tap
December S&P 500 E-Mini futures (ESZ24) are up +0.06%, and December Nasdaq 100 E-Mini futures (NQZ24) are up +0.08% this morning as market participants geared up for the latest reading on U.S. job openings while also awaiting a deluge of corporate earnings reports from heavyweight names.
In yesterday’s trading session, Wall Street’s major indexes ended in the green. 3M Company (MMM) climbed over +4% and was the top percentage gainer on the Dow after JPMorgan raised its price target on the stock to $165 from $160. Also, airline and transportation stocks rallied as oil prices plunged, with Carnival (CCL) rising more than +4% and American Airlines Group (AAL) advancing over +3%. In addition, ON Semiconductor (ON) gained more than +1% after reporting better-than-expected Q3 results. On the bearish side, Boeing (BA) fell over -2% and was the top percentage loser on the Dow after the planemaker launched a $19 billion share sale.
Meanwhile, markets are bracing for the possibility of Donald Trump returning to the White House, with most major polls indicating he is in a close race with Vice President Kamala Harris. A win for Trump could be more advantageous for stocks and Bitcoin compared to his Democratic opponent, whereas a Harris presidency might provide slightly more relief in housing costs, according to a Bloomberg Markets Live Pulse survey.
Third-quarter corporate earnings season is in full swing, with investors awaiting new reports today from prominent companies such as Alphabet (GOOGL), Visa (V), Advanced Micro Devices (AMD), McDonald’s (MCD), Pfizer (PFE), and PayPal (PYPL). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +4.3% increase in quarterly earnings for Q3 compared to the previous year, down from +7.9% growth projected in mid-July.
“Near-term focus is shifting to megacap earnings that kick off today with Google. There is still an expectation that AI spending will be maintained and that could continue to be a significant driver of broader equity momentum,” said Charu Chanana, chief investment strategist at Saxo Markets.
On the economic data front, all eyes are focused on the U.S. JOLTs Job Openings data, which is set to be released in a couple of hours. Economists, on average, forecast that the September JOLTs Job Openings will stand at 7.980M, compared to the August figure of 8.040M.
Also, investors will focus on the U.S. Conference Board’s Consumer Confidence Index, which arrived at 98.7 in September. Economists foresee the October figure to be 99.5.
The U.S. S&P/CS HPI Composite - 20 n.s.a. will come in today. Economists expect August’s figure to be +4.9% y/y, compared to the previous number of +5.9% y/y.
U.S. Wholesale Inventories preliminary data will be reported today as well. Economists estimate this figure to arrive at +0.2% m/m in September, compared to +0.1% m/m in August.
U.S. rate futures have priced in a 96.4% chance of a 25 basis point rate cut and a 3.6% chance of no rate change at the conclusion of the Fed’s November meeting.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.314%, up +0.75%.
The Euro Stoxx 50 futures are up +0.40% this morning as investors digested the latest batch of corporate earnings reports. Bank stocks outperformed on Tuesday, while mining stocks retreated. A survey released on Tuesday showed that German consumer sentiment is expected to continue its recovery heading into November, as households feel more optimistic about their income prospects, although pessimism about the economic outlook persists. Meanwhile, European Central Bank Vice President Luis de Guindos stated Monday that the ECB has made considerable progress in reducing inflation but cannot yet declare victory. “The incoming information shows that the disinflationary process is now well on track. The outlook, however, is surrounded by substantial risks,” he said. Investors will focus on Eurozone third-quarter GDP and October inflation data due later in the week to shape expectations regarding the central bank’s future interest rate cuts. In corporate news, HSBC Holdings Plc (HSBA.LN) gained over +4% after Europe’s biggest lender reported stronger-than-expected Q3 results and announced a $3 billion share buyback. Also, Adidas Ag (ADS.D.DX) rose about +1% after the German sportswear maker reported a 71% surge in Q3 net profit.
Germany’s GfK Consumer Climate Index was released today.
The German November GfK Consumer Climate Index arrived at -18.3, stronger than expectations of -20.4.
Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed down -1.08% and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.77%.
China’s Shanghai Composite Index closed lower today, snapping a two-day winning streak as investors cautiously awaited a high-level meeting next week, where authorities are expected to announce additional stimulus measures. Energy and pharmaceutical stocks led the declines on Tuesday. Data showed that investors withdrew money from exchange-traded funds that invest in Chinese stocks last week, ending a streak of inflows as the latest stimulus measures failed to impress investors. Meanwhile, market participants are bracing for a meeting of the National People’s Congress Standing Committee scheduled to take place from November 4th to 8th. Nomura analysts believe that “markets have reached a consensus view that extra government bonds will be approved for state bank recapitalization and local hidden debt resolution.” In other news, the Biden administration finalized restrictions on investments by U.S. individuals and companies in advanced technology in China, including semiconductors, quantum computing, and artificial intelligence. In corporate news, Sinopec slid over -3% after China’s largest oil refiner reported lower Q3 revenue due to soft crude oil prices. At the same time, Wuxi AppTec rose about +1% in Hong Kong after reporting better-than-expected Q3 revenue.
Japan’s Nikkei 225 Stock Index closed higher today, marking its second consecutive session of gains as investors continued to evaluate the implications of the recent election. Financial and conglomerate stocks led the gains on Tuesday. Data showed on Tuesday that Japan’s labor market tightened in September, with the unemployment rate dropping to its lowest since January and the job-to-applicant ratio increasing slightly, signaling continued pressure on companies to increase wages ahead of the Bank of Japan meeting. Prime Minister Shigeru Ishiba’s coalition lost its parliamentary majority in Sunday’s election, which analysts view as a negative for Japanese equities due to increased policy uncertainties and complications for the BOJ’s rate hike plans. Ishiba pledged to restore political stability in an effort to retain power. Meanwhile, Yuichiro Tamaki, leader of the opposition Democratic Party for the People, stated on Tuesday that the BOJ should refrain from overhauling its ultra-loose monetary policy at this time. In corporate news, Nippon Paint Holdings surged over +14% after announcing plans to acquire global chemicals formulator AOC for $2.3 billion. Investors now await the BOJ’s policy decision on Thursday, with the central bank widely expected to keep its policy interest rate unchanged. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +13.84% to 29.44.
The Japanese September Unemployment Rate was at 2.4%, stronger than expectations of 2.5%.
The Japanese September Jobs/applications ratio stood at 1.24, stronger than expectations of 1.23.
Pre-Market U.S. Stock Movers
Ford (F) slumped over -6% in pre-market trading after the company lowered its full-year adjusted EBIT forecast.
V.F. Corporation (VFC) soared about +21% in pre-market trading after the company posted better-than-expected Q2 results.
F5 Networks (FFIV) climbed more than +12% in pre-market trading after the networking delivery company posted upbeat Q4 results, issued above-consensus Q1 revenue guidance, and announced a new $1 billion share buyback program.
Cadence Design Systems (CDNS) gained over +5% in pre-market trading after the company reported stronger-than-expected Q3 results and raised its full-year EPS forecast.
Keurig Dr Pepper (KDP) slid more than -4% in pre-market trading after announcing that a subsidiary of JAB Holding Company plans to sell 60 million shares of KDP common stock through a proposed registered public offering.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - October 29th
Alphabet (GOOGL), Visa (V), AMD (AMD), McDonald’s (MCD), Pfizer (PFE), Stryker (SYK), Chubb (CB), American Tower (AMT), Mondelez (MDLZ), PayPal (PYPL), Chipotle Mexican Grill (CMG), Ecolab (ECL), Enterprise Products Partners LP (EPD), Republic Services (RSG), DR Horton (DHI), ONEOK (OKE), Royal Caribbean Cruises (RCL), Phillips 66 (PSX), MSCI (MSCI), Corning (GLW), Electronic Arts (EA), Sysco (SYY), Extra Space Storage (EXR), Edison (EIX), FirstEnergy (FE), Hubbell (HUBB), Check Point Software (CHKP), EQT (EQT), First Solar (FSLR), Essex Property (ESS), Zebra (ZBRA), Masco (MAS), Snap (SNAP), Stanley Black Decker (SWK), BXP Inc (BXP), IDEX (IEX), AMH 4 Rent (AMH), Reddit (RDDT), Tenet Healthcare (THC), Biomarin Pharma (BMRN), DaVita (DVA), W P Carey Inc (WPC), Incyte (INCY), SoFi Technologies (SOFI), ITT (ITT), Unum (UNM), Expand Energy (EXE), Eagle Materials (EXP), Caesars (CZR), Qorvo Inc (QRVO), Chemed (CHE), Graphic Packaging (GPK), Allison Transmission (ALSN), DT Midstream (DTM), Exelixis (EXEL), ATI Inc (ATI), FMC (FMC), Modine Manufacturing (MOD), STAG Industrial (STAG), Meritage (MTH), ESAB Corp (ESAB), Varonis Systems (VRNS), Landstar (LSTR), Littelfuse (LFUS), ExlServices (EXLS), Zurn Water Solutions (ZWS), Armstrong World Industries (AWI), CommVault (CVLT), PJT Partners Inc (PJT), Rithm Capital (RITM), UMB Financial (UMBF), Caretrust Inc (CTRE), Franklin Electric (FELE), Asbury Automotive (ABG), Kadant (KAI), IPG Photonics (IPGP), CBIZ (CBZ), Hayward Holdings (HAYW), Park Hotels & Resorts (PK), Scorpio Tankers (STNG), Adtalem Education (ATGE), JetBlue (JBLU), Provident (PFS), HNI (HNI), Werner (WERN), New Gold (NGD), Inventrust Properties (IVT), The Cheesecake (CAKE), Alignment Healthcare LLC (ALHC), American Assets (AAT), Standex (SXI), Enovix (ENVX), H&E Equipment (HEES), Harmony Bio (HRMY), Kiniksa Pharma (KNSA), O-I Glass (OI).
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On 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 solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
