Five things you need to know before the market opens on Wednesday November 9:
1. -- Stock Futures Slip Lower As Mid-Term Elections Remain Too-Close-To-Call
U.S. equity futures slipped lower Wednesday, while the dollar remained steady against a basket of its global currency peers, as investors kept risky bets in check while they await a clear indication of results from last night's mid-term elections.
With all 435 House seats up for grabs, as well as 35 seats in the Senate, control of Congress remained in the balance in the early hours of Wednesday morning, with many tight races too close to call, and many others just getting their counting processes underway.
Nonetheless, media projections suggest the Democrats may have won a surprise victory in Pennsylvania, with John Fetterman toping Mehmet Oz for the state's vacant seat. That could prove crucial for Democrats if they want to hold onto control of the Senate -- where they current have the tie-breaking vote of Vice President Kamala Harris -- and thwart the expected Republican sweep of Congress.
Republicans are likely to take the House, however, tipping the current balance of power over the final two years of President Joe Biden's term and providing markets with the kind of 'gridlocked' government that typically supports stock performance. At the time of writing, GOP candidates looked to have picked up at least nine seats in the House, compared to three for the Democrats.
Investor focus is likely to shift quickly from election results to the Federal Reserve's inflation fight, however, given that markets will digest a key reading of October CPI tomorrow amid easing price pressures and the paring of big rate hike bets from the Fed's December meeting.
Overnight in China, in fact, data showed producer prices declining for the first time in nearly two years, suggesting that county's ability to 'export deflation' could be revived when its economy wriggles out from under its current 'zero Covid' health policies.
Benchmark Treasury bond yields slipped to 4.138% in overnight dealing ahead of a $40 billion auction later today, while the U.S. dollar index was marked 0.12% higher against a basket of its global peers at 109.763.
Bitcoin prices extended declines, falling around 2% to trade south of the $18,000 mark, following yesterday's shocking revelation that crypto trading platform Binance will buy its rival, FTX.com.
Early readings from U.S. equity futures suggest a cautious day of trading on Wall Street, with contracts tied to the S&P 500 priced for a 20 point opening bell decline and those linked to the Dow Jones Industrial Average looking at a 170 point pullback. The tech-focused Nasdaq is called 58 points lower.
In overseas markets, China stocks extended declines on the back of accelerating Covid infections and PPI date underscoring demand weakness in the world's second largest economy, pulling the region-wide MSCI ex-Japan index to a modest 0.38% gain.
In Europe, the Stoxx 600 fell 0.55% as it tracked U.S. equity futures while Britain's FTSE 100 was marked 0.314% lower in the opening hours of trading in London.
2. -- Tesla Edges Higher As Elon Musk Reveals Another $3.95 Billion Share Sale
Tesla (TSLA) shares inched modestly higher in pre-market trading Wednesday after Securities & Exchange Commission filings showed CEO Elon Musk has sold another $3.95 billion in company stock.
Musk, who is also financing part of the $44 billion required to buy the social media website Twitter, sold 19.5 million shares between November 4 and November 7, at prices ranging between $197.196 and $208.731 per share, across a total of twelve transactions.
Earlier this summer, Musk sold 7.92 million shares between August 5 and August 9, netting a total of around $6.9 billion, taking advantage of a 47% rally in Tesla shares from late May to August 5, when the first sale was made. He sold another $8.5 billion in April.
Tesla shares were marked 0.73% higher in pre-market trading to indicate an opening bell price of $192.70 each.
3. -- Disney Tumbles On Expensive Streaming Gains, Q3 Earnings Miss
Walt Disney (DIS) shares slumped lower in pre-market trading after the media and entertainment giant posted weaker-than-expected fourth quarter earnings but topped Street forecasts for new streaming subscribers and once again overtook Netflix NFLX as the world's biggest platform.
Disney said adjusted diluted earnings for the three months ending in September, the group's fiscal fourth quarter, came in at 30 cents per share, down 19% from the same period last year and firmly south of the Street forecast of 55 cents per share. Group revenues, Disney said, rose 9% to $20.15 billion.
Disney added 14.6 million subscribers over the whole of the quarter, with ESPN+ totaling 24.3 million paid subscribers and Hulu rising to 47.2 million. Disney's total subs of 235.7 million are now firmly ahead of the 223.1 million last tallied by Netflix (NFLX).
Revenue per user, however, was pegged at $3.91, falling shy of analysts' estimates of around $4.24, suggesting subscriber acquisition costs continue to rise. The direct-to-consumer business division, in fact, posted a loss of $1.5 billion for the quarter.
Disney shares were marked 8% lower in pre-market trading to indicate an opening bell price of $91.95 each.
4. -- Occidental Petroleum Rides Oil Price Wave, Delivers Warren Buffet Solid Q3 Profits
Occidental Petroleum (OXY) shares edged lower in pre-market trading after the oil group, which is a major portion of billionaire Warren Buffett's Berkshire Hathaway (BRK.A) investment vehicle,
Occidental said profits for the three months ending in September nearly tripled from last year to $2.55 billion, or $2.52 per share., firmly ahead of Street forecasts.
The country's biggest shale producer saw only a modest increase in production -- up 0.34% to 1,180 thousand barrels of oil equivalent per day (boepd) -- but a big posted in prices that lead to a 40% increase in revenues, which were pegged at $9.5 billion.
West Texas Intermediate crude prices traded between $108.40 and $79.50 per barrel over the three months ending in September, a range that was around 27% higher than the pandemic recovery levels recorded over the same period last year. Domestic U.S. gas prices were also higher, hovering around $3.95 per gallon compared to mid-summer 2021 levels of around $3.21 per gallon.
Occidental shares were marked 0.44% lower in pre-market trading to indicate an opening bell price of $74.50 each.
5. -- AMC Slides After Q3 Loss, Muted 'Ape' Share Sales
AMC Entertainment (AMC) shares moved lower in pre-market trading after the movie theatre chain posted a wider-than-expected third quarter loss and unveiled disappointing figures from the sale of preferred equity units earlier in the summer.
AMC, which has been courting retail investors since its stock was swept-up in the 'meme stock' craze that captivated markets in early 2021, raised on $36.4 million from its preferred unit sales, suggesting muted appetite from its key investor base, often referred to as 'Apes'.
CEO Adam Aron also decried a lack of new movie releases -- and indeed plans for blockbuster films over the holiday season -- as he unveiled a loss of $226.9 million for the three months ending in September. Revenues, however, were surprisingly solid at just over $1 billion, topping Street forecasts of $961 billion.
AMC shares were marked 3.4% lower in pre-market trading to indicate an opening bell price of $5.43 each.
