Morning Markets
The S&P 500 is slightly higher this morning and the Nasdaq is being weighed down by a slump in mega-cap technology stocks.
Alphabet is down more than -6% after reporting Q3 Google advertising revenue of $54.48 billion, weaker than the consensus of $56.98 billion. Also, Microsoft is down more than -5% after saying it expects weak PC and ad demand to continue in Q2 and forecasts Q2 dollar strength to cut sales growth by 5%.
Chip stocks are also falling, with Texas Instruments down more than -1% after forecasting Q4 revenue of $4.40 billion-$4.80 billion, below the consensus of $4.93 billion.
On the positive side for stocks, shares of Hilton Worldwide Holdings, Kraft Heinz, and Bunge Ltd are climbing in pre-market trading after reporting better-than-expected Q3 earnings results. Also, a decline in T-note yields is supportive for stocks as the 10-year T-note yield today is down -3.9 bp at 4.063%.
This morning's U.S. inventory news is supportive for stocks after Sep wholesale inventories rose +0.8% m/m, weaker than expectations of +1.0% m/m. Also, Sep retail inventories rose +0.4% m/m, weaker than expectations of +1.2% m/m. Still, the rise in the inventories is negative for the economy since it suggests weak demand and excess production.
The Euro Stoxx 50 today is down by -0.45%. The Euro Stoxx 50 today fell back from a 6-week high and is moderately lower. Weakness in technology stocks is leading the overall market lower after Alphabet, Microsoft, and Texas Instruments reported disappointing earnings results. Food and beverage stocks were also moving lower today after Heineken NV tumbled after beer sales slumped and the company warned of softer demand. In addition, stocks are under pressure on the outlook for the ECB to raise interest rates by 75 bp at Thursday’s policy meeting.
Eurozone Sep M3 money supply rose +6.3% y/y, stronger than expectations of +6.0% y/y and the fastest pace of increase in 7 months.
French Oct consumer confidence unexpectedly rose +3 to 82, stronger than expectations of a decline to 77.
Asian markets today closed higher. China’s Shanghai Composite closed up +0.78%, and Japan’s Nikkei Stock Index closed up +0.67%.
Chinese stocks moved higher today, and the yuan climbed to a 1-week high against the dollar on comments from the People’s Bank of China (PBOC) and the State Administration of Foreign Exchange, which said they would enhance coordination with other agencies to ensure the soundness of the equity, bond, and real estate markets. Also, the China Securities Regulatory Commission said it will accelerate the building of capital markets that are “regulated, transparent, open, robust and resilient.” The comments were made to alleviate pressure on Chinese stocks and the yuan, which fell to a 14-year low against the dollar this week, on concern China will shift toward more state control versus a market-driven economy after Chinese President Xi Jinping moved to stack his leadership ranks with loyalists.
Japan’s Nikkei Stock Index today rallied to a 5-week high and closed moderately higher. Expectations for increased government stimulus gave stocks a boost today after Kyodo news reported Japan’s upcoming economic stimulus package would be 67.1 trillion yen ($454 billion). Also, optimism that the recent yen weakness will boost corporate earnings is giving equity markets a boost.
The Japan Aug leading index CI was revised upward by +0.4 to a 4-month high of 101.3 from the previously reported 100.9.
Pre-Market U.S. Stock Movers
Alphabet (GOOGL) tumbled more than -6% in pre-market trading after reporting Q3 Google advertising revenue of $54.48 billion, weaker than the consensus of $56.98 billion. Other mega-cap tech stocks are also sliding, with Amazon.com (AMZN) and Meta Platforms (META) down more than -3%. Tesla (TSLA) is down more than -1%.
Microsoft (MSFT) dropped more than -5% in pre-market trading after saying it expects weak PC and ad demand to continue in Q2 and forecasts Q2 dollar strength to cut sales growth by 5%.
Chip stocks are falling in pre-market trading, led by a -4% fall in Texas Instruments (TXN) after it forecasted Q4 revenue of $4.40 billion-$4.80 billion, below the consensus of $4.93 billion. Nvidia (NVDA) is down more than -2%, and Advanced Micro Devices (AMD) and Qualcomm (QCOM) are down more than -1%.
Mattel (MAT) tumbled more than -5% in pre-market trading after cutting its full-year adjusted EPS forecast to $1.32-$1.42 from a previous forecast of $1.42-$1.48, weaker than the consensus of $1.48.
Skechers (SKX) plunged -14% in pre-market trading after reporting Q3 adjusted EPS of 64 cents, below the consensus of 72 cents, and forecasting Q4 EPS of 30 cents to 40 cents, well below the consensus of 51 cents.
Invesco (IVZ) fell more than -1% in pre-market trading after Credit Suisse downgraded the stock to underperform from neutral.
Harley-Davidson (HOG) climbed more than +3% in pre-market trading after reporting Q3 revenue of $1.65 billion, well above the consensus of $1.37 billion.
Hilton Worldwide Holdings (HLT) rose more than +1% in pre-market trading after reporting Q3 adjusted Ebitda of $732 million, above the consensus of $687.4 million.
Bunge Ltd (BG) jumped more than +5% in pre-market trading after reporting Q3 adjusted EPS of $3.45, well above the consensus of $2.47, and raised its full-year adjusted EPS forecast to at least $13.50 from a previous estimate of at least $12.00.
Waste Management (WM) climbed +3% in pre-market trading after reporting Q3 adjusted EPS of $1.56, better than the consensus of $1.51.
Kraft Heinz (KHC) rose more than +3% in pre-market trading after reporting Q3 net sales of $6.50 billion, stronger than the consensus of $6.28 billion.
Humana (HUM) gained more than +1% in pre-market trading after Deutsche Bank upgraded the stock to buy from neutral Jeffries initiated coverage of the stock with a buy rating and a $190 price target.
Today’s U.S. Earnings Reports (10/26/2022)
Align Technology Inc (ALGN), Amphenol Corp (APH), Automatic Data Processing Inc (ADP), Avery Dennison Corp (AVY), Boeing Co/The (BA), Boston Scientific Corp (BSX), Bristol-Myers Squibb Co (BMY), CME Group Inc (CME), Digital Realty Trust Inc (DLR), EQT Corp (EQT), Essex Property Trust Inc (ESS), Everest Re Group Ltd (RE), Ford Motor Co (F), Fortive Corp (FTV), Fortune Brands Home & Security (FBHS), Garmin Ltd (GRMN), General Dynamics Corp (GD), Globe Life Inc (GL), Hess Corp (HES), Hilton Worldwide Holdings Inc (HLT), Invitation Homes Inc (INVH), IQVIA Holdings Inc (IQV), KLA Corp (KLAC), Kraft Heinz Co/The (KHC), Masco Corp (MAS), Meta Platforms Inc (META), Mid-America Apartment Communit (MAA), Molina Healthcare Inc (MOH), Norfolk Southern Corp (NSC), Old Dominion Freight Line Inc (ODFL), O'Reilly Automotive Inc (ORLY), Otis Worldwide Corp (OTIS), Raymond James Financial Inc (RJF), Rollins Inc (ROL), Roper Technologies Inc (ROP), Seagate Technology Holdings PL (STX), ServiceNow Inc (NOW), Teledyne Technologies Inc (TDY), Thermo Fisher Scientific Inc (TMO), Twitter Inc (TWTR), Tyler Technologies Inc (TYL), UDR Inc (UDR), United Rentals Inc (URI), VF Corp (VFC), Waste Management Inc (WM).
More Stock Market News from Barchart
- Bear Call Spread Screener Results For October 26th
- Pre-market Brief: Stocks Mixed As Big Tech Earnings Disappoint
- Stocks Rally on Lower Bond Yields and Positive Q3 Corporate Earnings
- Unusual Options Activity Points to a Bold Move on Hertz (HTZ)
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