Pre-Market Brief: Stocks Move Higher Ahead of U.S. Midterm Elections

December S&P 500 futures (ESZ22) are trending up +0.17% after three major US benchmark indices finished the regular session higher as investors focused on midterm elections that will determine control of Congress. Three major U.S. stock indexes were fueled primarily by gains in the Oil & Gas, Technology, and Industrials sectors.

In Monday's trading session, Meta Platforms Inc jumped more than +6% to lead big tech higher following a report that the social media giant was planning to start large-scale layoffs this week, easing investors' worries about spiraling costs.

Ahead in Tuesday’s session, market participants will be closely eying the outcome of the midterm election, which could potentially herald changes in the country’s economic policies. Republicans are favored to win a majority in the House of Representatives in the elections, with the Senate rated a toss-up by nonpartisan forecasters. 

"The likelihood that the Republicans take the House or the Senate is pretty high, therefore guaranteeing some form of gridlock over the next couple of years. That would probably take tax hikes off the table, and any sort of big spending potentially perceived as inflationary off the table," said Ross Mayfield, an investment strategy analyst at Baird.

Meanwhile, U.S. rate futures have priced in a 52.0% chance of a 50 basis point rate increase and a 48.0% chance of a 75 basis point hike at December's monetary policy meeting. Although new data showed another month of robust job gains and a little decrease in inflation, four Fed policymakers on Friday indicated they would consider a smaller rate hike at their policy meeting in December.

"All else equal, whether the terminal rate sits at 4.5%, 5% or beyond, monetary policy is poised to have a negative effect on the economy heading into 2023," Glenmede's investment strategists wrote in a note. 

The U.S. economic data slate is largely empty on Tuesday. 

In the bond markets, United States 10-Year rates are at 4.210%, down -0.10%.

The Euro Stoxx 50 futures are up +0.11% this morning as investors digested a number of corporate earnings ahead of the crucial U.S. midterm elections. Europe's quarterly corporate earnings season is in full swing, with several significant companies reporting their third-quarter results. Associated British Foods Plc (ABF.LN) rose about +5% after the owner of fast fashion retailer Primark reported a 42% increase in operating profit. In addition, shares of Pandora A/S (PNDOR.C.DX) jumped over +7% after the Danish jeweler reported better-than-expected third-quarter profit.

France's Non-Farm Payrolls (preliminary), France's Trade Balance, and Eurozone Retail Sales data were released today.

The French Non-Farm Payrolls data has been reported at 0.4% q/q in the third quarter, in line with expectations.

The French September Trade Balance stood at -17.5B, weaker than expectations of -14.3B. 

Eurozone September Retail Sales came in at +0.4% m/m, in line with expectations.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.43%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.25%.

China’s Shanghai Composite today closed lower as traders dialed back expectations that Beijing would lift strict COVID restrictions soon. Chinese authorities said over the weekend that the country plans to unswervingly stick to its strict zero-COVID strategy, dismissing rumors over a potential removal of restrictions. Uncertainty over a Chinese reopening has also heavily affected investors' appetite for the country.

Japan’s Nikkei 225 Stock Index closed higher today, with technology stocks tracking the Wall Street rally on speculation over the Federal Reserve potentially slowing its pace of interest rate hikes. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down 2.27% and hit a new 1-month low of 21.08. 

Pre-Market U.S. Stock Movers

Take-Two Interactive Software Inc (TTWO) tumbled over -18% in pre-market trading after the company reported downbeat Q2 results and issued a weak FY2023 outlook.

SolarEdge Technologies Inc (SEDG) jumped more than +9% in pre-market trading after the company reported mixed Q3 results but provided favorable Q4 2022 revenue guidance.

LYFT Inc (LYFT) plunged about -19% in pre-market trading after the company delivered weaker-than-expected Q3 numbers.

TripAdvisor Inc (TRIP) slid over -19% in pre-market trading after the company announced a mixed Q3 report.

LivePerson Inc (LPSN) gained over +12% in pre-market trading after the company reported upbeat Q3 results and provided a favorable FY2022 revenue outlook.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - November 8th

Walt Disney (DIS), Nippon ADR (NTTYY), Occidental (OXY), Bayer AG PK (BAYRY), Nintendo ADR (NTDOY), Daikin Industries ADR (DKILY), Deutsche Post AG (DPSGY), Muenchener Rueckver Ges (MURGY), Lonza Group AG (LZAGY), Fortescue Metals (FSUMF), Banco Bradesco (BBD), DuPont De Nemours (DD), Constellation Energy (CEG), Globalfoundries (GFS), Citic ADR (CTPCY), Henkel AG & Co KGAA (HENKY), Henkel Ag A (HENOY), Royalty Pharma (RPRX), Naturgy Energy ADR (GASNY), Lucid Group (LCID), Ecopetrol ADR (EC), CNH Industrial NV (CNHI), Fannie Mae Pref S (FNMAS), Trip.com ADR (TCOM), STERIS (STE), PerkinElmer (PKI), Expeditors Washington (EXPD), Surgutneftegaz ADR (SGTZY), Surgutneftegaz OAO (SGTPY), NortonLifeLock Inc (NLOK), Ovintiv (OVV), Akamai (AKAM), Jack Henry&Associates (JKHY), Shaw B (SJR), Associated British Foods plc (ASBFY), Darling Ingredients (DAR), Siemens Gamesa ADR (GCTAY), New Fortress Energy (NFE), BB Seguridade Participacoes SA (BBSEY), Fidelity Financial (FNF), Axon Enterprise (AXON), Bentley (BSY), Brambles ADR (BXBLY), Carlyle Group (CG), Amdocs (DOX), News Corp (NWS), News Corp A (NWSA), Builders FirstSource (BLDR), ASX ADR (ASXFY), Switch (SWCH), Toray Industries ADR (TRYIY), Signify Health (SGFY), Norwegian Cruise Line (NCLH), CLARIVATE (CLVT), Masimo (MASI), Reynolds (REYN), Globus Medical (GMED), Halozyme (HALO), Engie Brasil (EGIEY), Elanco Animal Health (ELAN), R1 RCM (RCM), Allkem (OROCF), Nedbank Group Ltd (NDBKY), Dentsply (XRAY), Woori Financial (WF), Nexstar (NXST), Coty Inc (COTY), Grifols ADR (GRFS), Grifols ADR (GIKLY), Planet Fitness Inc (PLNT), Primerica (PRI), Perrigo (PRGO), Spirit Realty (SRC), Novanta (NOVT), Braskem A (BAK), Lumentum Holdings Inc (LITE), Grupo Simec ADR (SIM), Affirm Holdings (AFRM), Knowbe4 (KNBE), GXO Logistics (GXO), Cerevel Therapeutics Holdings (CERE), Natera Inc (NTRA), IAC/InterActiveCorp (IAC), IGT (IGT), DoubleVerify Holdings (DV), MSP Recovery (MSPR), Shizuoka Bank ADR (SHZUY), Oji ADR (OJIPY), Playtika (PLTK), Ziff Davis (ZD), Abcellera Biologics (ABCL), New Relic Inc (NEWR), Mirati Ther (MRTX), Buzzi Unicem ADR (BZZUY), Grocery Outlet (GO), Permian Resources (PR), Sprouts Farmers (SFM), SunPower (SPWR), Prospect Capital (PSEC), SSR Mining (SSRM), Fannie Mae (FNMA), Adapthealth (AHCO), Northern Oil&Gas (NOG), ViaSat (VSAT), AMC Entertainment (AMC), Alarm.com Holdings (ALRM), Lifestance Health Group (LFST), Squarespace (SQSP), Beijing Capital Airport ADR (BJCHY), Envestnet (ENV), Innospec (IOSP), National Health Investors (NHI), Sitio Royalties (STR), Array (ARRY), TransAlta Corp (TAC), Alpha Bank (ALBKY), Surgery Partners Inc (SGRY), Sunstone Hotel Investors (SHO), International Seaways (INSW), Xenon Pharmaceuticals (XENE), Cervecerias ADR (CCU), Goodrx (GDRX), Sage Therapeutic (SAGE), Rogers (ROG), iQIYI (IQ), Flywire (FLYW), Sweetgreen (SG), Lundin Gold Inc (LUGDF), Cricut (CRCT), Supernus (SUPN), Caretrust Inc (CTRE), Liberty Latin America C (LILAK), Liberty Latin America (LILA), Bridge Investment Group Holdings (BRDG), Revance The (RVNC), Beauty Health Co (SKIN), Everi Holdings (EVRI), The Hain Celestial (HAIN), Custom Truck One Source (CTOS), CarGurus (CARG), Vivid Seats (SEAT), Celldex Therapeutics (CLDX), First Advantage (FA), Embotelladora Andina (AKOa), Freddie Mac (FMCC), Silk Road Medical (SILK), Northwest Natural Gas (NWN), MultiPlan (MPLN), Novavax (NVAX), Vivint Smart Home (VVNT), Clean Energy (CLNE), Veritiv Cor (VRTV), Upstart (UPST), Opko Health (OPK),  Saul Centers (BFS), Lemonade (LMND), Model N Inc (MODN), V2X Inc (VVX), W&T Offshore (WTI), Reata Pharma (RETA), Rhythm Pharma (RYTM), Sabine Royalty Trust (SBR), Two Harbors (TWO), Marathon Digital (MARA), ProAssurance (PRA), Montrose (MEG), Treace Medical Concepts (TMCI), Inter and Co A (INTR), Furukawa Electric ADR (FUWAY), EW Scripps A (SSP), Avid (AVID), Arcutis (ARQT), Liveramp (RAMP), Aclaris Therapeutics Inc (ACRS), Diamond Offshore Drilling (DO), Moneygram (MGI), Emergent Biosolutions (EBS), 3D Systems (DDD), Armada Hflr Pr (AHH).

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