Markets Today: Stocks Climb on Lower T-note Yields and Meta Rally

Morning Markets

December S&P 500 futures (ESZ22) this morning are up +0.21%, and December Nasdaq 100 E-Mini futures (NQZ22) are up +0.23%.  Stocks indexes are seeing support from a +3% rally in Meta.  Also, lower T-note yields are supportive for stocks, with the 10-year T-note yield down -1.8 bp at 4.157%

Technology stocks are finding support this morning from a rally of more than +3% in Meta Platforms in pre-market trading after the Wall Street Journal reported the company would begin laying off thousands of workers this week, thus reducing expenses and boosting profits.  Also, Okta is up more than +3% after Guggenheim Securities upgraded the stock to buy.  Gains in technology stocks were limited, with Apple down more than -2% in pre-market trading, on reports it will cut its iPhone production due to weak demand.

The Euro Stoxx 50 index today is up by +0.65% and posted a 2-1/2 month high.  European stocks are climbing today on better-than-expected Eurozone economic data on Eurozone Sep industrial production and the Nov Sentix investor confidence index.  European stocks are also climbing on optimism that the recent euro weakness will boost the earnings prospects of European exporters. 

The Eurozone Nov Sentix investor confidence index rose +7.4 to -30.9, stronger than expectations of -35.0.

Eurozone Sep industrial production rose +0.6% m/m, stronger than expectations of +0.1% m/m.

Comments today from ECB Governing Council member Villeroy de Galhau were bearish for stocks when he said the ECB shouldn't stop raising interest rates until underlying inflation "has clearly peaked." 

Asian markets today closed higher.  China’s Shanghai Composite closed up +0.23%, and Japan’s Nikkei Stock Index closed up +1.21%.

China’s Shanghai Composite today extended last Friday’s rally to a 2-1/2 week high.  However, Chinese stocks fell back from their best levels today as companies tied to reopening declined after Chinese health officials Saturday said the country will “unswervingly” adhere to its Covid Zero strategy.  Also, China reported 5,436 new Covid infections on Sunday, the most in 6 months.   In addition, weak Chinese trade data was bearish for economic growth prospects and stock prices after both Chinese Oct exports and imports unexpectedly declined.

China Oct exports unexpectedly fell -0.3% y/y, weaker than expectations of +4.5% y/y and the first decline in nearly 2-1/2 years.  China Oct imports unexpectedly fell -0.7% y/y, weaker than expectations of no change and the first decline in 2 years.

Japanese stocks posted moderate gains on carry-over support from last Friday’s rally in U.S. stocks. Also, strong corporate quarterly earnings results from Japanese companies boosted investor sentiment. 

Pre-Market U.S. Stock Movers

Meta Platforms (META) climbed more than +3% in pre-market trading after the Wall Street Journal reported the company is planning to start cutting thousands of workers this week. 

NOV Inc (NOV) jumped more than +7% in pre-market trading after Wells Fargo Securities upgraded the stock to equal weight from underweight. 

U.S.-listed Chinese stocks are moving higher in pre-market trading amid reopening optimism even after Chinese health officials said the country would “unswervingly” adhere to its Covid Zero strategy.  Baidu (BIDU) is up more than +2%.  Also, Pinduoduo (PDD), JD.com (JD), Alibaba Group Holding (BABA), and NetEase (NTES) are up more than +1%. 

DoorDash (DASH) is up more than +3% in pre-market trading after Oppenheimer upgraded the stock to outperform from market perform. 

Okta (OKTA) climbed more than +3% in pre-market trading after Guggenheim Securities upgraded the stock to buy, citing a “compelling” valuation. 

Workday (WDAY) rose more than +2% in pre-market trading after Guggenheim Securities upgraded the stock to neutral from sell. 

Apple (AAPL) fell more than -2% in pre-market trading after cutting its iPhone14 production estimate by 3 million to 87 million this year, citing weaker demand and China Covid lockdowns. 

Costco Wholesale (COST) dropped more than -5% in pre-market trading after Wells Fargo Securities downgraded the stock to equal weight from overweight.

Redfin (RDFN) sank more than -8% in pre-market trading after Oppenheimer downgraded the stock to underperform, saying the company’s business model is “fundamentally flawed.” 

Dominion Energy (D) fell nearly -2% in pre-market trading after Credit Suisse downgraded the stock to neutral from outperform.

Ruth’s Hospitality Group (RUTH) slid more than -1% in pre-market trading after Raymond James downgraded the stock to market perform from strong buy. 

Today’s U.S. Earnings Reports (11/7/2022)

Activision Blizzard Inc (ATVI), Alliant Energy Corp (LNT), Diamondback Energy Inc (FANG), International Flavors & Fragra (IFF), Mosaic Co/The (MOS), NiSource Inc (NI), NRG Energy Inc (NRG), SolarEdge Technologies Inc (SEDG), Take-Two Interactive Software (TTWO), Viatris Inc (VTRS), 

Welltower Inc (WELL).

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