December S&P 500 futures (ESZ22) are trending down -0.74% this morning after three major US benchmark indices finished the regular session mixed as investors balanced mixed earnings reports from major technology companies and economic data. The NASDAQ Composite and S&P 500 indexes were weighted down primarily by losses in the Technology, Healthcare, and Consumer Services sectors, while the Dow Jones Industrial Average index ended higher as a rally in Caterpillar and Boeing offset a meltdown in Meta stock.
"There's a lot of pressure on tech and tech-plus names, higher growth names. On the flip side, you’re seeing a lot of strength in other sectors, in particular consumer staples, energy, financials, industrials, and utilities," said Tim Ghriskey, a senior portfolio strategist at Ingalls & Snyder in New York.
A third-quarter GDP data showed the U.S. economy returned to growth in the third quarter, rising +2.6% q/q. Data on Thursday also indicated the Federal Reserve's interest rate hikes hurt consumer spending. Investors continue to scan the economic data for evidence that the aggressive interest rate hikes from the Federal Reserve are beginning to have the desired effect.
Meanwhile, U.S. rate futures have priced in an 84.4% chance of a 75 basis point hike at November's monetary policy meeting and a 53.0% chance of a 50 basis point rate increase in December.
"The overriding theme is really the Fed. The Fed is going to control the direction of this market over the coming months," Ghriskey added.
Today, all eyes are focused on the U.S. Core PCE Price Index data in a couple of hours. Economists, on average, forecast that September Core PCE Price Index will grow +0.5% m/m compared to the previous value of +0.6% m/m.
Also, investors are likely to focus on Canada's August GDP data, which was at +0.1% m/m in July. Economists foresee the new figure to be +0.1% m/m.
U.S. September Pending Home Sales data will be reported today. Economists forecast this figure to stand at -5.0% m/m, compared to the previous value of -2.0% m/m.
The U.S. Michigan Consumer Sentiment Index (preliminary) will be reported today as well. Economists estimate this figure to come in at 59.8 in October, compared to the previous figure of 59.8.
In the bond markets, United States 10-Year rates are at 3.977%, up +0.97%.
The Euro Stoxx 50 futures are down -1.16% this morning, with sentiment hit by a soft report from e-commerce giant Amazon and a sharp drop in French quarterly growth as the earnings season continues.
"Fuel cost and the impacts of the Ukraine war are hitting the economies in Europe even harder than the U.S., and that's showing up in consumer spending," said Brian Olsavsky, Amazon's chief financial officer.
The European Central Bank hiked interest rates by 75 basis points on Thursday and said it expects to increase them further as the central bank aims to bring down inflation even as growth in the region slows.
France's Consumer Spending, France's GDP, France's CPI, Spain's GDP, Spain's CPI, and Germany's GDP data were released today.
The French September Consumer Spending has been reported at +1.2% m/m, stronger than expectations of +1.1% m/m.
The French GDP (preliminary) stood at +0.2% q/q in the third quarter, in line with expectations.Â
The French CPI (preliminary) was at +6.2% y/y, stronger than expectations of +5.7% y/y.
The Spanish GDP (preliminary) came in at +0.2% q/q in Q3, weaker than expectations of +0.3% q/q.
The Spanish CPI (preliminary) stood at +7.3% y/y, weaker than expectations of +8.0% y/y.
The German GDP (preliminary) stood at +0.3% q/q in Q3, stronger than expectations of -0.2% q/q.
Asian stock markets today settled in the red, dragged by a drop in technology stocks after a slew of weak earnings from U.S. big techs. China’s Shanghai Composite Index (SHCOMP) closed down -2.21%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.88%.
China’s Shanghai Composite today closed lower as Chinese cities introduced new COVID-19 restrictions to battle a rise in COVID cases. The country’s government recently reiterated its commitment to the strict zero-COVID policy, brewing fresh concerns over the Chinese economy. In addition, worries about the country’s political climate weighed on Chinese stocks this week.
At the same time, Japan’s Nikkei 225 Stock Index closed lower today as the government was preparing around $490 billion in stimulus spending to support the Japanese economy. The index's downward momentum was fueled by losses in the Chemical, Petroleum & Plastic, Railway & Bus, and Shipbuilding sectors. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down 1.80% to 23.44.
Pre-Market U.S. Stock Movers
Amazon.com Inc (AMZN) plunged over -13% in pre-market trading after the company reported mixed Q3 results and provided weak Q4 revenue guidance.
Gilead Sciences Inc (GILD) climbed over +3% in pre-market trading after the company delivered upbeat Q3 earnings results.Â
Intel Corporation (INTC) jumped about +5% in pre-market trading after the company reported better-than-expected EPS but slightly missed revenue estimates.
Pinterest Inc (PINS) spiked about +10% in pre-market trading after the company reported better-than-anticipated EPS and revenue numbers in Q3.
Edwards Lifesciences Corp (EW) plunged over -10% in pre-market trading after the company declared a downbeat Q3 report and provided a weak FY2022 EPS outlook.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Friday - October 28th
Exxon Mobil (XOM), Chevron (CVX), AbbVie (ABBV), Industrial Commercial Bank of China (IDCBY), PetroChina ADR (PTR), Equinor ADR (EQNR), Sanofi ADR (SNY), Volkswagen 1/10 ADR (VWAGY), Airbus Group NV (EADSY), Sony ADR (SONY), Volkswagen Pref 1/10 ADR (VWAPY), Glencore ADR (GLNCY), Glencore (GLCNF), Charter Communications (CHTR), Colgate-Palmolive (CL), Aon (AON), Natwest Group (NWG), Safran SA (SAFRY), ENI ADR (E), Hitachi ADR (HTHIY), Denso ADR (DNZOY), United Overseas Bank ADR (UOVEY), Imperial Oil (IMO), China Life Insurance ADR (LFC), China Citic Bank ADR (CHCJY), BBVA ADR (BBVA), WW Grainger (GWW), Fomento Economico Mexicano (FMX), Coterra Energy (CTRA), Swiss Re (SSREY), Mitsubishi Electric ADR (MIELY), Anhui Conch Cement Co (AHCHY), Church&Dwight (CHD), Fortis Inc (FTS), Surgutneftegaz ADR (SGTZY), Surgutneftegaz OAO (SGTPY), W P Carey Inc (WPC), China Eastern Airlines (CEA), Avantor (AVTR), Booz Allen Hamilton (BAH), OMV AG PK (OMVKY), Danske Bank A/S ADR (DNKEY), Royal Caribbean Cruises (RCL), Banco De Chile (BCH), Dr. Reddy’s Labs ADR (RDY), Impala Platinum Holdings Ltd PK (IMPUY), Santander Chile ADR (BSAC), IAG ADR (ICAGY), Newell Brands (NWL), Shell Midstream Partners LP (SHLX), Gentex (GNTX), Allkem (OROCF), Toto (TOTDY), Makita (MKTAY), Seiko Epson ADR (SEKEY), Balchem (BCPC), Industrias Penoles (IPOAF), Air France KLM SA (AFLYY), PNM Resources (PNM), Rithm Capital (RITM), Fuchs Petrolub ADR (FUPBY), Electrolux B ADR (ELUXY), TFS Financial (TFSL), First Hawaiian (FHB), Proximus ADR (BGAOY), Arbor (ABR), Enel Chile ADR (ENIC), Piper Sandler (PIPR), Newmark Group (NMRK), Itau CorpBanca ADR (ITCB), Usinas Siderurgicas de Minas Gerais (USNZY), Barnes (B), Alps Electric (APELY), Provident (PFS), Granite Construction (GVA), ImmunoGen (IMGN), Dime Community (DCOM), Virtus (VRTS), Greenbrier (GBX), Southside (SBSI), Controladora Vuela ADR (VLRS), WisdomTree (WETF), Gorman-Rupp (GRC), Peapack-Gladstone (PGC).
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