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. Market participants are gearing up for the latest reading on U.S. job openings and 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. Carnival (CCL) rose more than +4%, and American Airlines Group (AAL) advanced over +3%. In addition, ON Semiconductor (ON) gained more than +1% after reporting better-than-expected Q3 results.
Stock index futures are treading water as the market awaits the release of the U.S. JOLTs report and Alphabet’s earnings. On the negative side, Boeing (BA) dropped over 2%, becoming the top percentage loser on the Dow, following the announcement of a $19 billion share sale.
Investors are also preparing for the potential return of Donald Trump to the White House, with polls showing a tight race against Vice President Kamala Harris. A Trump victory could be more favorable for stocks and Bitcoin, while a Harris presidency might offer some relief in housing costs, according to a Bloomberg Markets Live Pulse survey.
The third-quarter corporate earnings season is in full swing, with market participants expecting new reports from major companies such as Alphabet (GOOGL), Visa (V), Advanced Micro Devices (AMD), McDonald’s (MCD), Pfizer (PFE), and PayPal (PYPL).
Stock index futures are currently stable ahead of the U.S. JOLTs report and Alphabet’s earnings release. Bloomberg Intelligence anticipates an average earnings increase of 4.3% for S&P 500 companies in Q3, a decrease from the 7.9% growth forecasted in mid-July. Charu Chanana, chief investment strategist at Saxo Markets, notes that the focus is on megacap earnings, starting with Google, and maintains an expectation that AI spending will continue to drive equity momentum.
Economic data is also under scrutiny, with the U.S. JOLTs Job Openings data due for release shortly. The consensus among economists is that the September JOLTs Job Openings will be at 7.980M, slightly lower than the August figure of 8.040M. Investors are keenly watching this data for insights into the labor market’s health.
Furthermore, Alphabet’s earnings are expected to provide further direction for market sentiment, as they are a significant indicator of the tech sector’s performance and overall market trends.
The U.S. Conference Board’s Consumer Confidence Index for September was recorded at 98.7, with economists predicting an October figure of 99.5.
The U.S. S&P/CS HPI Composite – 20 n.s.a. is due today, with economists anticipating an August figure of +4.9% y/y, down from the previous +5.9% y/y.
U.S. Wholesale Inventories’ preliminary data is also set to be released today, with estimates suggesting a September increase of +0.2% m/m, compared to August’s +0.1% m/m.
U.S. rate futures currently indicate a 96.4% probability of a 25 basis point rate cut and a 3.6% chance of no rate change following the Fed’s November meeting.
In bond market news, the yield on the 10-year U.S. Treasury note has risen to 4.314%, an increase of +0.75%.
Euro Stoxx 50 futures have risen by +0.40% this morning as investors process the latest corporate earnings reports.
Bank stocks outperformed on Tuesday while mining stocks retreated.
A survey on Tuesday showed German consumer sentiment is expected to continue its recovery in November as households are optimistic about income prospects though pessimism about economic outlook persists. European Central Bank Vice President Luis de Guindos stated on Monday that the ECB has made considerable progress in reducing inflation but can’t declare victory. He said, ‘The incoming information shows that the disinflationary process is on track. However, the outlook is surrounded by substantial risks.’ Investors will focus on Eurozone third-quarter GDP and October inflation data later in the week to shape expectations regarding the central bank’s future interest rate cuts.The stock market is currently stable ahead of the U.S. JOLTs report and Alphabet’s upcoming earnings announcement.
In corporate news, HSBC Holdings Plc (HSBA.LN) saw its shares increase by over 4% after the company reported better-than-expected Q3 results and announced a $3 billion share buyback program.
Adidas Ag (ADS.D.DX) also experienced a rise in its stock, gaining about 1%, following the announcement of a 71% increase in Q3 net profit.
The German November GfK Consumer Climate Index was released today, showing a value of -18.3, which was stronger than the anticipated -20.4.
Asian stock markets closed with mixed results today. China’s Shanghai Composite Index (SHCOMP) ended the day down by 1.08%, while Japan’s Nikkei 225 Stock Index (NIK) finished up by 0.77%.
China’s Shanghai Composite Index closed lower, ending a two-day winning streak as investors are cautiously waiting for 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 indicated that investors pulled money from exchange-traded funds investing in Chinese stocks last week, ending a run of inflows as the latest stimulus measures didn’t impress investors. Meanwhile, market participants are preparing for a meeting of the National People’s Congress Standing Committee scheduled from November 4th to 8th. Nomura analysts think 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 completed 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, China’s largest oil refiner, slid over -3% after reporting 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.In the political arena, Ishiba has pledged to restore political stability as a means of retaining power. On the monetary policy front, Yuichiro Tamaki, the leader of the opposition Democratic Party for the People, advised against the Bank of Japan (BOJ) overhauling its ultra-loose monetary policy at this juncture. Corporate news highlights include Nippon Paint Holdings’ stock surge of over 14% following the announcement of their acquisition of global chemicals formulator AOC for $2.3 billion. Investors are now looking ahead to the BOJ’s policy decision on Thursday, where the central bank is widely anticipated to maintain its policy interest rate unchanged. The Nikkei Volatility, which reflects the implied volatility of Nikkei 225 options, closed up by 13.84% at 29.44. Economic indicators show that the Japanese September Unemployment Rate was at 2.4%, which is stronger than the expected 2.5%. The Jobs/applications ratio for September in Japan stood at 1.
The stock index futures are steady ahead of the release of the U.S. JOLTs report and Alphabet’s earnings.
In pre-market trading, Ford (F) saw a significant decline of over -6% after the company revised its full-year adjusted EBIT forecast downward.
On a positive note, V.F. Corporation (VFC) experienced a surge of about +21% in pre-market trading following the announcement of better-than-expected Q2 results.
F5 Networks (FFIV) climbed by more than +12% in pre-market trading after reporting strong Q4 results, issuing above-consensus Q1 revenue guidance, and announcing a new $1 billion share buyback program.
Cadence Design Systems (CDNS) gained over +5% in pre-market trading after reporting stronger-than-expected Q3 results and raising its full-year EPS forecast.
Keurig Dr Pepper (KDP) fell by more than -4% in pre-market trading after disclosing that a subsidiary of JAB Holding Company intends to sell 60 million shares of KDP common stock through a registered public offering.
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). You can see more pre-market stock movers here.
