December Nasdaq 100 E-Mini futures (NQZ24) are trending up +0.43% this morning as positive earnings from Intel and Amazon boosted sentiment, with the focus now shifting to the all-important U.S. jobs report that will help clarify the Federal Reserve’s interest rate trajectory.
Amazon (AMZN) climbed over +5% in pre-market trading after the e-commerce and cloud giant reported stronger-than-expected Q3 results and provided solid guidance for the holiday quarter. Also, Intel (INTC) gained more than +5% in pre-market trading after the semiconductor giant reported better-than-expected Q3 revenue and issued an upbeat Q4 revenue forecast.
In yesterday’s trading session, Wall Street’s major indexes closed lower. Huntington Ingalls Industries (HII) plummeted over -26% and was the top percentage loser on the S&P 500 after reporting weaker-than-expected Q3 results. Also, Super Micro Computer (SMCI) tumbled about -12% and was the top percentage loser on the Nasdaq 100, adding to Wednesday’s -32% plunge, after accounting firm Ernst & Young LLP resigned as the company’s auditor. In addition, Microsoft (MSFT) slumped over -6% and was the top percentage loser on the Dow after the tech giant provided a disappointing FQ2 cloud revenue growth forecast. On the bullish side, Paycom Software (PAYC) soared more than +21% and was the top percentage gainer on the S&P 500 after posting upbeat Q3 results and raising the lower end of its annual revenue guidance.
Data from the U.S. Department of Commerce released on Thursday showed that the core PCE price index, a key inflation gauge monitored by the Fed, came in at +0.3% m/m and +2.7% y/y in September, compared to expectations of +0.3% m/m and +2.6% y/y. Also, U.S. September personal spending rose +0.5% m/m, stronger than expectations of +0.4% m/m, while personal income grew +0.3% m/m, in line with expectations. In addition, the U.S. employment cost index, a key gauge of U.S. labor costs, rose +0.8% q/q in the third quarter, weaker than expectations of +0.9% q/q and the slowest pace of increase in 3 years. Finally, the number of Americans filing for initial jobless claims in the past week unexpectedly fell by -12K to a 5-month low of 216K, compared with the 229K expected.
“We view the data overall as suggesting that upside inflation risks from a strong economy and labor market remain to date muted, and while the Fed and investors will need to keep this under ongoing review given the strength in the data, it is fundamentally constructive for risk and for the ‘soft landing,’” Evercore ISI Vice Chairman Krishna Guha wrote in a note.
Meanwhile, U.S. rate futures have priced in a 93.2% chance of a 25 basis point rate cut and a 6.8% chance of no rate change at the upcoming monetary policy meeting.
On the earnings front, notable companies like Exxon Mobil (XOM), Chevron (CVX), Dominion Energy (D), Charter Communications (CHTR), and Wayfair (W) are set to report their quarterly figures today. 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.
Today, all eyes are focused on the U.S. monthly payroll report, which is set to be released in a couple of hours. Economists, on average, forecast that October Nonfarm Payrolls will come in at 106K, compared to September’s figure of 254K.
Investors will also focus on the U.S. ISM Manufacturing PMI and the S&P Global Manufacturing PMI. Economists foresee the October ISM Manufacturing PMI to arrive at 47.6 and the S&P Global Manufacturing PMI to be 47.8, compared to the previous values of 47.2 and 47.3, respectively.
U.S. Average Hourly Earnings data will be closely watched today. Economists expect October figures to be +0.3% m/m and +4.0% y/y, compared to the previous numbers of +0.4% m/m and +4.0% y/y.
U.S. Construction Spending data will come in today. Economists forecast this figure to be unchanged m/m in September, compared to the previous number of -0.1% m/m.
The U.S. Unemployment Rate will be reported today as well. Economists foresee this figure to remain steady at 4.1% in October.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.300%, up +0.30%.
The Euro Stoxx 50 futures are up +0.64% this morning, starting November on a positive note, while investors awaited the key U.S. jobs report. Energy stocks led the gains on Friday. Meanwhile, investors keep an eye on new corporate earnings and the monetary and economic outlook, with robust results from Amazon and Intel boosting market sentiment. Market participants are also gearing up for the upcoming U.S. presidential election, whose outcome could impact the European corporate sector. In corporate news, Reckitt Benckiser Group Plc (RKT.LN) surged about +10% after the consumer goods group was cleared of liability in a preterm formula case. Also, Ap Moller Maersk A/S (MAERB.C.DX) rose more than +4% after Barclays and JPMorgan raised their price targets on the stock.
The European economic data slate is mainly empty on Friday.
Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.24% and Japan’s Nikkei 225 Stock Index (NIK) closed down -2.63%.
China’s Shanghai Composite Index ended lower today despite positive economic data from the country as caution prevailed ahead of next week’s U.S. presidential election and a key leadership meeting. Technology and automobile stocks weighed on the index on Friday, while energy stocks outperformed. A private-sector survey showed on Friday that China’s manufacturing activity unexpectedly picked up in October, driven by an expansion in new orders that spurred an increase in production growth. Separately, preliminary data from China Real Estate Information Corp. showed that the country’s residential property sales increased in October, marking the first year-over-year rise of 2024. The value of new-home sales from the 100 largest real estate companies increased by 7.1% year-over-year to 435.5 billion yuan ($61.2 billion), rebounding from a 37.7% decline in September. The data indicated that Beijing’s recent stimulus measures are starting to have an effect. Meanwhile, market participants are now focusing on a meeting of the National People’s Congress Standing Committee set to take place from November 4th to 8th, where announcements regarding debt and fiscal initiatives are expected. Reuters reported that authorities were considering the approval of 10 trillion yuan ($1.4 trillion) in additional borrowing over the coming years to support the economy and address local government debt risks. In corporate news, Li Auto plunged over -9% in Hong Kong after the electric vehicle maker provided a weak Q4 revenue forecast. Also, CSPC Pharmaceutical slumped more than -8% in Hong Kong after posting a drop in its preliminary net profit for the first nine months.
The Chinese October Caixin Manufacturing PMI arrived at 50.3, stronger than expectations of 49.7.
Japan’s Nikkei 225 Stock Index closed sharply lower today, tracking overnight losses on Wall Street. Local stocks also faced pressure as the yen strengthened following increased expectations of a Bank of Japan rate hike after hawkish remarks from the central bank’s chief. BOJ Governor Kazuo Ueda stated on Thursday that the current political situation in Japan would not prevent him from raising rates if prices and the economy align with the central bank’s projections. Electronics and technology-related stocks led the declines on Friday. Automobile stocks also lost ground. However, the benchmark index notched a modest weekly gain, breaking a two-week streak of declines. Meanwhile, a private-sector survey released on Friday showed that Japan’s factory activity contracted at the quickest rate in three months in October as weak domestic and international demand weighed on sales and output. In other news, the BOJ stated Friday that the country’s rising minimum wage is expected to drive inflation primarily through higher service prices. In corporate news, Lasertec tumbled over -16% after the company reported weaker-than-expected earnings for the July-September period and said it would no longer disclose quarterly orders. Also, Renesas Electronics slid over -5% after reporting weak Q3 results. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +1.09% to 26.03.
The Japanese October au Jibun Bank Japan Manufacturing PMI came in at 49.2, stronger than expectations of 49.0.
Pre-Market U.S. Stock Movers
Amazon (AMZN) climbed over +5% in pre-market trading after the e-commerce and cloud giant reported stronger-than-expected Q3 results and provided solid guidance for the holiday quarter.
Intel (INTC) gained more than +5% in pre-market trading after the semiconductor giant reported better-than-expected Q3 revenue and issued an upbeat Q4 revenue forecast.
Apple (AAPL) fell about -1% in pre-market trading after the iPhone maker reported weaker-than-anticipated quarterly sales in China.
Atlassian (TEAM) soared about +20% in pre-market trading after the software firm posted upbeat FQ1 results and issued above-consensus FQ2 revenue guidance.
LendingTree (TREE) rose over +6% in pre-market trading after reporting better-than-expected Q3 results and raising its full-year revenue guidance.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Friday - November 1st
Exxon Mobil (XOM), Chevron (CVX), Enbridge (ENB), Simon Property (SPG), Ares Management (ARES), Charter Communications (CHTR), Dominion Energy (D), Imperial Oil (IMO), LyondellBasell Industries (LYB), Cardinal Health (CAH), Church&Dwight (CHD), T Rowe (TROW), PPL (PPL), Cboe Global (CBOE), Waters (WAT), nVent Electric (NVT), Magna Intl (MGA), RBC Bearings (RBC), Essent Group Ltd (ESNT), Moog (MOGa), Madison Square Garden Sports (MSGS), Wayfair Inc (W), TXNM Energy (TXNM), Telephone&Data Systems (TDS), Arbor (ABR), Digitalbridge Group (DBRG), Alpha Metallurgical Resources (AMR), Brightspring Health Services (BTSG), ArcBest Corp (ARCB), Oxford Lane (OXLC), Costamare (CMRE), Pediatrix Medical (MD), Interface (TILE), AdvanSix (ASIX), Proto Labs (PRLB).
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