Morning Markets
December S&P 500 futures (ESZ22) are trending down -0.51% this morning, retreating after three major US benchmark indices advanced for the third successive day, as weaker-than-anticipated house price data boosted hopes of smaller interest rate hikes from U.S. Federal Reserve policymakers. Three major U.S. stock indexes were fueled primarily by gains in the Consumer Goods, Basic Materials, and Technology sectors.
All three major U.S. stock indexes lifted for the third consecutive session, with the S&P 500 reclaiming about 8% from the low of its Oct. 12th close. Economic data on Tuesday indicated signs of economic softness amid slowing home price growth and souring consumer confidence, raising expectations that the Fed could decelerate rate hikes after its November meeting. On the ground of this, yields of 10-year Treasuries pulled pack, bolstering the broad market rally.Â
"There’s increasing discussion about a light at the end of the tunnel for Fed rate hikes. We’re seeing a bit of a reprieve in the dollar, and long-term bond yields have come down a little bit. Those factors are combining to provide room for a bit of a rally," said Bill Merz, a head of capital market research at U.S. Bank Wealth Management in Minneapolis.Â
Meanwhile, U.S. rate futures have priced in a 5.5% chance of a 50 basis point rate increase and a 94.5% chance of a 75 basis point hike at November's monetary policy meeting.
In extended deals, Alphabet (GOOGL) and Microsoft (MSFT) reported weaker-than-expected earnings results that pushed U.S. stock futures down. At the same time, analysts expect third-quarter profits for S&P 500 companies to lift +3.3% on a year-over-year basis, compared to an +4.5% increase expected at the start of the month.
Today, all eyes are focused on the U.S. New Home Sales data in a couple of hours. Economists, on average, forecast that September New Home Sales will come in at 585K compared to the previous value of 685K.
Also, investors are likely to monitor BoC Interest Rate Decision, which was at 3.25% in September. Economists expect the new interest rate to be 4.00%.
U.S. Crude Oil Inventories data will be reported today as well. Economists estimate this figure to come in at +1.029M, compared to last week's figure of -1.725M.
In the bond markets, United States 10-Year rates are at 4.042%, down -1.65%.
The Euro Stoxx 50 futures are up +0.06% this morning as investors continue to digest quarterly earnings from the European banking sector. However, European equity markets have received a positive handover from Wall Street after U.S. tech giants Alphabet and Microsoft delivered disappointing earnings overnight.Â
France Consumer Confidence and Eurozone M3 Money Supply data were released today.
The French October Consumer Confidence has been reported at 82, stronger than expectations of 77.
Eurozone September M3 Money Supply stood at 6.3% y/y, stronger than expectations of 6.1% y/y
Asian stock markets today closed in the green amid growing expectations of a less aggressive Federal Reserve policy. China’s Shanghai Composite Index (SHCOMP) closed up +0.78%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.67%.
China’s Shanghai Composite today closed higher, rebounding from a sharp selloff earlier this week. However, concerns over China’s political climate and slowing economic growth persist, limiting the index's recovery. President Xi Jinping's new leadership team has bolstered worries that the government will increasingly prioritize the state at the cost of the private sector.
At the same time, Japan’s Nikkei 225 Stock Index closed in the green today on Fed pivot hopes. In addition, Japanese government bonds lifted sharply after the Bank of Japan again said it would expand its bond-buying operation. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down 4.63% to 23.87.
Pre-Market U.S. Stock Movers
Spotify Technology SA (SPOT) tumbled about -5% in pre-market trading after the company reported mixed Q3 results.Â
Alphabet Inc Class A (GOOGL) plunged about -6% in pre-market trading after the company delivered a downbeat Q3 earnings report.
Meta Platforms Inc (META) dropped over -3% in pre-market trading following Google's results.
Microsoft Corporation (MSFT) slid more than -5% in pre-market trading after the company delivered upbeat Q1 results but reported slower-than-expected growth in its cloud business Azure.
Texas Instruments Incorporated (TXN) dropped about -4% in pre-market trading after the company reported better-than-expected Q3 results but provided a soft Q4 outlook.
Enphase Energy Inc (ENPH) climbed about +5% in pre-market trading after the company disclosed a better-than-anticipated Q3 earnings report.Â
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Wednesday - October 26th
Meta Platforms (META), Thermo Fisher Scientific (TMO), Bristol-Myers Squibb (BMY), ADP (ADP), Boeing (BA), ServiceNow Inc (NOW), China Petrol & Chemical ADR (SNP), Waste Management (WM), General Dynamics (GD), Canadian Pacific Railway (CP), CME Group (CME), Daimler (DDAIF), Iberdrola SA (IBDRY), Boston Scientific (BSX), Ford Motor (F), Norfolk Southern (NSC), O’Reilly Automotive (ORLY), Reckitt Benckiser ADR (RBGLY), Heineken NV (HEINY), Dassault Systemes SA (DASTY), Kraft Heinz (KHC), Santander ADR (SAN), Amphenol (APH), KLA Corp (KLAC), Hess (HES), BASF ADR (BASFY), Roper Technologies (ROP), IQVIA Holdings (IQV), Southern Copper (SCCO), Enphase (ENPH), Hilton Worldwide (HLT), Cognizant A (CTSH), Old Dominion Freight Line (ODFL), Bank Mandiri Persero ADR (PPERY), Digital (DLR), Otis Worldwide (OTIS), Barclays ADR (BCS), AvalonBay (AVB), Canon ADR (CAJ), Assa Abloy AB (ASAZY), Fortive (FTV), Raymond James Financial (RJF), eBay (EBAY), Molina Healthcare (MOH), Banco Santander Brasil ADR (BSBR), DTE Energy (DTE), Invitation Homes (INVH), United Rentals (URI), Agnico Eagle Mines (AEM), Deutsche Bank AG (DB), Standard Chartered (SCBFF), Mid-America Apartment (MAA), Arch Capital (ACGL), Rollins (ROL), EDP Energias de Portugal ADR (EDPFY), Align (ALGN), Biomarin Pharma (BMRN), Teledyne Technologies (TDY), Aspen (AZPN), Garmin (GRMN), Essex Property (ESS), Cincinnati Financial (CINF), United Microelectronics (UMC), Symrise Ag PK (SYIEY), Tyler Technologies (TYL), Avery Dennison (AVY), UDR (UDR), Bunge (BG), Wolfspeed (WOLF), Sodexo PK (SDXAY), Coca-Cola Femsa ADR (KOF), Telenor ASA ADR (TELNY), Everest (RE), VF (VFC), Graco (GGG), Masco (MAS), Antero Resources Corp (AR), Koninklijke ADR (KKPNY), Dynatrace Holdings LLC (DT), Morningstar (MORN), WPP ADR (WPP), Owens Corning (OC), Flex (FLEX), Nitto Denko Corp (NDEKY), Churchill Downs (CHDN), Penske Automotive (PAG), Annaly Capital Management (NLY), Fortune Brands (FBHS), Acadia Healthcare (ACHC), Olin (OLN), Invesco (IVZ), Healthcare of America (HTA), Murphy USA Inc (MUSA), Prosperity Bancshares (PB), CACI (CACI), Hess Midstream Partners (HESM), West Fraser Timber (WFG), Dolby Labs (DLB), OMRON ADR (OMRNY), Hitachi Metals ADR (HMTLY), Fresnillo (FNLPF), Accor SA (ACCYY), FirstService (FSV), Informatica (INFA), Popular (BPOP), Capcom ADR (CCOEY), Harley-Davidson (HOG), Driven Brands Holdings (DRVN), Pilgrims Pride (PPC), Silgans (SLGN), Encompass Health (EHC), TechnipFMC (FTI), Eagle Materials (EXP), Axis Capital (AXS), NewYork Community Bancorp (NYCB), Blackstone Mortgage (BXMT), Wingstop Inc (WING), OneMain Holdings (OMF), Ryder System (R), Allison Transmission (ALSN), Independence Realty Trust Inc (IRT), Integra (IART), New Oriental Education&Tech (EDU), Ubisoft (UBSFF), Mr. Cooper (COOP), Taylor Morn Home (TMHC), Alamos Gold (AGI), Plexus (PLXS), Meritage (MTH), Group 1 Automotive (GPI), CONMED (CNMD), Methanex (MEOH), Impinj (PI), Tronox (TROX), Sunnova Energy (NOVA), Empire State Realty (ESRT), Upwork (UPWK), Paramount Group Inc (PGRE), Century Communities (CCS), Getty (GTY), The Chefs Warehouse (CHEF), Ultra Cleans (UCTT), LendingClub Corp (LC), M/I Homes (MHO), Capitol Federal (CFFN), Oceaneering International (OII), Atos Origin ADR (AEXAY), AMERISAFE (AMSF), OceanaGold (OCANF).
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