Morning Markets
December S&P 500 futures (ESZ22) this morning are down by -0.86%. Stock indexes tumbled this morning as bond yields jumped after U.S. Sep nonfarm payrolls rose more than expected and the Sep unemployment rate unexpectedly declined. The stronger-than-expected payroll report will keep the pressure on the Fed to keep aggressively raising interest rates. The 10-year T-note yield this morning jumped to a 1-week high of 3.896%.Â
Chip stocks tumbled in pre-market trading, led by a -6% drop in Advanced Micro Devices, after it reported Q3 revenue of $5.6 billion, well below the consensus of $6.71 billion, citing weak PC sales and a build-up of inventory in the supply chain. The sell-off in chip stocks spread to Europe and Asia after Samsung Electronics today also reported disappointing Q3 earnings.Â
U.S Sep nonfarm payrolls rose +263,000, stronger than expectations of +255,000. The U.S. Sep unemployment rate unexpectedly fell -0.2 to 3.5%, stronger than expectations of no change at 3.7%.
U.S. Sep average hourly earnings rose +0.3% m/m and +5.0% y/y, right on expectations.
The Euro Stoxx 50 today is down by -0.47%. A slump in chipmakers is leading European technology stocks lower today after Advanced Micro Devices and Samsung Electronics reported disappointing quarterly earnings results. Today’s economic news on German Aug retail sales and German Aug industrial production was also bearish for stocks. Strength in European bank stocks limited losses in the overall market, with Credit Suisse Group AG up more than +5% after it announced a buyback of debt securities, a show of financial strength after market volatility earlier this week raised concerns about the bank’s finances.Â
German Aug retail sales fell -1.3% m/m, weaker than expectations of -1.2% m/m and the biggest decline in 4 months.
German Aug industrial production fell -0.8% m/m, weaker than expectations of -0.5% m/m and the biggest decline in 5 months.
The German Aug import price index rose +32.7% y/y, stronger than expectations of 30.1% y/y and the largest increase in 48 years.
Asian markets today closed lower. Chinese markets are closed this week for the Golden Week holidays. Hong Kong’s Hang Seng Index closed down -1.51%, and Japan’s Nikkei Stock Index closed down -0.71%.Â
Hong Kong’s Hang Seng Index fell moderately today, led by losses in technology stocks. Asian chip stocks retreated today to lead technology stocks lower after Advanced Micro Devices preliminary Q3 sales missed projections. Losses in chip stocks accelerated after Samsung Electronics reported Q3 operating profit fell by -32% to 10.8 trillion won ($7.7 billion), well below the consensus of 12.1 trillion won and the first profit decline since 2019.Â
Japan’s Nikkei Stock Index today fell moderately. Weakness in Japanese chip stock led technology stocks lower after Advanced Micro Devices and Samsung Electronics reported weaker-than-expected earnings results.  Weakness in Japanese financial stocks also weighed on the overall market after comments Thursday from several Fed members signaled the Fed would continue with its aggressive rate hike campaign.
Japanese economic news today was mostly supportive of stocks. The Japan Aug leading index CI rose +2.0 to a 4-month high of 100.9, stronger than expectations of 100.3. Also, Japan Aug household spending rose +5.1% y/y, the biggest increase in 7 months but still weaker than expectations of +6.7% y/y.
Pre-Market U.S. Stock Movers
Chip stocks fell in pre-market trading after Advanced Micro Devices and Samsung reported disappointing earnings results.  Advanced Micro Devices (AMD) is down more than -6%.  Also, Nvidia (NVDA) is down more than -3%. In addition, Micron (MU), Intel (INTC), and Texas Instruments (TXN) are down more than -2%.
Levi Strauss (LEVI) dropped more than -4% in pre-market trading after it cut its full-year adjusted EPS estimate to $1.44-$1.49 from a prior estimate of $1.50-$1.56, weaker than the consensus of $1.54.Â
Lyft (LYFT) fell more than -3% in pre-market trading after RBC Capital Markets downgraded the stock to sector perform from outperform, saying the bull case for the stock looks increasingly less likely.Â
CVS Health (CVS) tumbled nearly -5% in pre-market trading, saying the percentage of Aetna Medicare Advantage members in 4+ Star plans is expected to drop to 21% from 87% y/y.
DraftKings (DKNG) surged more than +9% in pre-market trading after Bloomberg reported that Walt Disney’s ESPN is nearing a large new partnership with DraftKings.Â
Aehr Test Systems (AEHR) jumped +12% in pre-market trading after reporting Q1 net sales of $10.7 million, up +89% from the year-ago period.Â
Payoneer Global (PAYO) rallied more than +8% in pre-market trading on news that the company will join the S&P SmallCap 600 Index before trading opens on October 12.Â
Pot stocks rallied in pre-market trading after President Biden pardoned thousands of Americans for possession of marijuana and ordered a review of its legal status, fueling hopes that decriminalization of the drug was drawing nearer. Tilray Brands (TLRY) and Canopy Growth (CGS) were up more than +9%, and Cronos Group (CRON) was up more than +2%.Â
Progressive Corp (PRG) gained nearly +2% in pre-market trading after Jeffries upgraded the stock to buy from hold.
Ambac Financial Group (AMBC) surged more than +20% in pre-market trading following an agreement to settle all of its claims against Bank of America and related entities for $1.84 billion
Today’s U.S. Earnings Reports (10/7/2022)
Enochian Biosciences Inc (ENOB), Radiant Logistics Inc (RLGT).
More Stock Market News from Barchart
- 2 Bear Call Spread Trade Ideas For This Friday
- Pre-Market Brief: Stocks Mixed as Key U.S. Payrolls Data Looms
- Stocks Retreat as Fed Comments Signal Tighter Monetary Policy
- Brown-Forman’s Been Very Busy Allocating Capital This Fall
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