Stocks Climb Before the Open With Focus on U.S. Retail Sales Data and Netflix Earnings

December S&P 500 E-Mini futures (ESZ24) are up +0.36%, andDecember Nasdaq 100 E-Mini futures (NQZ24) are up +0.68% this morning as upbeat results from Taiwan Semiconductor Manufacturing Co. boosted sentiment, while investors awaited a fresh batch of U.S. economic data as well as an earnings report from streaming giant Netflix.

U.S.-listed shares of Taiwan Semiconductor Manufacturing Co. (TSM) rose over +7% in pre-market trading after the world’s biggest contract chipmaker reported better-than-expected Q3 results and raised its full-year revenue growth forecast.

In yesterday’s trading session, Wall Street’s major indices ended in the green. United Airlines Holdings (UAL) surged over +12% and was the top percentage gainer on the S&P 500 after the carrier posted upbeat Q3 results and announced a $1.5 billion stock buyback program. Also, Morgan Stanley (MS) climbed more than +6% after the lender reported better-than-expected Q3 revenue. In addition, Cisco Systems (CSCO) rose over +4% and was the top percentage gainer on the Dow after Citigroup upgraded the stock to Buy from Neutral with a price target of $62. On the bearish side, Intel (INTC) slid more than -1% and was the top percentage loser on the Dow after Reuters reported that the CyberSecurity Association of China recommended conducting a review of the chipmaker’s products sold in the country. 

Economic data released on Wednesday showed that the U.S. import price index fell -0.4% m/m in September, weaker than expectations of -0.3% m/m. Also, the U.S. September export price index fell -0.7% m/m, weaker than expectations of -0.4% m/m.

Meanwhile, U.S. rate futures have priced in a 92.1% chance of a 25 basis point rate cut and a 7.1% chance of no rate change at the next central bank meeting in November.

Third-quarter earnings season picks up pace, and investors look forward to new reports from prominent companies today, including Netflix (NFLX), Blackstone (BX), Intuitive Surgical (ISRG), Elevance Health (ELV), Marsh & McLennan Companies (MMC), Travelers (TRV), M&T Bank (MTB), and KeyCorp (KEY). 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.

On the economic data front, all eyes are focused on U.S. Retail Sales data, which is set to be released in a couple of hours. Economists, on average, forecast that September Retail Sales will stand at +0.3% m/m, compared to the August figure of +0.1% m/m.

Also, investors will focus on U.S. Core Retail Sales data, which came in at +0.1% m/m in August. Economists foresee the September figure to be +0.1% m/m.

The U.S. Philadelphia Fed Manufacturing Index will be reported today. Economists foresee this figure to stand at 4.2 in October, compared to the previous value of 1.7. 

U.S. Initial Jobless Claims data will come in today. Economists expect this figure to be 241K, compared to last week’s number of 258K.

U.S. Industrial Production and Manufacturing Production data will be closely monitored today. Economists forecast September Industrial Production to be -0.1% m/m and September Manufacturing Production to stand at -0.1% m/m, compared to the August numbers of +0.8% m/m and +0.9% m/m, respectively.

U.S. Crude Oil Inventories data will be reported today as well. Economists estimate this figure to be 1.800M, compared to last week’s value of 5.810M.

In addition, market participants will be looking toward a speech from Chicago Fed President Austan Goolsbee.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.035%, up +0.48%.

The Euro Stoxx 50 futures are up +0.77% this morning as investors digested fresh earnings reports and looked ahead to the European Central Bank’s interest rate decision. Bank stocks led the gains on Thursday. Final data from Eurostat released Thursday showed that the Eurozone’s annual inflation rate fell further below the ECB’s target than initially thought in September. Meanwhile, the ECB is widely anticipated to cut interest rates for the second consecutive meeting later today, following data that indicated slowing inflation alongside a worsening economy. The deposit rate is expected to be lowered by another quarter-point to 3.25%. In corporate news, Nordea Bank Abp (NDA.S.DX) climbed over +6% after the Finnish bank raised its full-year return on equity forecast and announced a new share buyback program. At the same time, Nokia Oyj (NOKIA.H.DX) slumped more than -5% after the Finnish telecom firm reported weaker-than-expected Q3 net sales.

Eurozone’s CPI and Eurozone’s Core CPI data were released today.

Eurozone September CPI has been reported at -0.1% m/m and +1.7% y/y, compared to expectations of -0.1% m/m and +1.8% y/y.

Eurozone September Core CPI came in at +0.1% m/m and +2.7% y/y, in line with expectations.

Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -1.05% and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.69%.

China’s Shanghai Composite Index closed lower today after a highly anticipated joint ministry briefing on property market support failed to deliver significant stimulus measures. Property stocks led the declines on Thursday. China’s Minister of Housing and Urban-Rural Development Ni Hong said Thursday that the government will expand a program to support “white list” projects to 4 trillion yuan ($562 billion) from approximately 2.23 trillion yuan already deployed. China is also considering permitting banks to issue loans to purchase idle land and enhance affordable housing support for families with two or more children. In addition, the government will renovate 1 million homes in so-called urban shantytowns. The plans disappointed, with some analysts calling them “incremental.” Meanwhile, investors are awaiting the release of China’s third-quarter GDP figures and additional data for September, including fixed asset investment, unemployment, industrial production, and retail sales, scheduled for Friday. In corporate news, Fujian Superpipe dropped over -3% after the company’s chief financial officer, Wang Hai, resigned, citing personal reasons.

Japan’s Nikkei 225 Stock Index closed lower today, with chip stocks leading the declines due to worries over the sector’s earnings outlook. Ministry of Finance data released Thursday showed that Japan’s exports declined for the first time in 10 months in September, with sluggish shipments to its key trading partners raising concerns about the country’s economic recovery trajectory. Also, data showed that Japan’s import growth slowed in September. Meanwhile, Bank of Japan policy board member Seiji Adachi stressed on Wednesday the necessity of gradually and cautiously increasing interest rates as the central bank unwinds prior easing measures, likely reinforcing market expectations that authorities will stand pat at this month’s meeting. “What we need to be careful of, in a gradual rate hike process, is that we raise it extremely gradually while keeping financial conditions accommodative” until the price trend reaches 2%, Adachi said. In corporate news, Japan Post rose nearly +2% after the Australian Financial Review reported that the company’s unit, Toll, is nearing a deal to purchase Pel-Air, the air ambulance business of Regional Express. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -2.75% to 26.55.

The Japanese September Trade Balance has been reported at -294.3B yen, weaker than expectations of -237.6B yen.

The Japanese September Exports stood at -1.7% y/y, weaker than expectations of +0.5% y/y.

The Japanese September Imports came in at +2.1% y/y, weaker than expectations of +3.2% y/y.

Pre-Market U.S. Stock Movers

Taiwan Semiconductor Manufacturing Co. (TSM) surged over +7% in pre-market trading after the world’s biggest contract chipmaker posted upbeat Q3 results and raised its full-year revenue growth forecast.

Alcoa (AA) climbed more than +4% in pre-market trading after the company reported stronger-than-expected Q3 adjusted EPS.

Expedia (EXPE) gained over +7% in pre-market trading after the Financial Times reported that Uber was considering a bid to acquire the company.

Vistra Corp. (VST) rose more than +1% in pre-market trading after JPMorgan initiated coverage of the stock with an Overweight rating and a $178 price target.

O-I Glass (OI) advanced over +1% in pre-market trading after BofA upgraded the stock to Buy from Neutral with a price target of $16.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - October 17th

Netflix (NFLX), Blackstone (BX), Intuitive Surgical (ISRG), Elevance Health (ELV), Marsh McLennan (MMC), Truist Financial Corp (TFC), Travelers (TRV), M&T Bank (MTB), Huntington Bancshares (HBAN), KeyCorp (KEY), Snap-On (SNA), Crown (CCK), Western Alliance (WAL), Webster Financial (WBS), Badger Meter (BMI), Commercial Metals (CMC), FNB (FNB), Bank Ozk (OZK), Texas Capital (TCBI), Iridium (IRDM), WD-40 (WDFC), ManpowerGroup (MAN), WNS Holdings (WNS), S&T Bancorp (STBA), OceanFirst (OCFC), Metropolitan Bank (MCB), Five Point (FPH), Insteel Industries (IIIN), Home Bancorp (HBCP), Alpine Income (PINE).

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