Markets Today: Stocks Rocket Higher as U.S. Inflation Concerns Ease

Morning Markets

December S&P 500 futures (ESZ22) this morning are up +3.18%, and December Nasdaq 100 E-Mini futures (NQZ22) are up +4.14%.  U.S. stock indexes surged this morning to 1-week highs, and bond yields tumbled after U.S. October consumer prices rose less than expected.  The 10-year T-note yield dropped to a 2-week low of 3.897%

A sharp recovery in cryptocurrencies today after their 2-day plunge is another positive factor for stocks, with Bitcoin up sharply by more than 11%.  Bitcoin and other cryptocurrencies plunged Tuesday and Wednesday after crypto exchange Binance said that it would not pursue an initial offer to acquire FTX.com. FTX.com CEO Bankman-Fried said his company faces a shortfall of up to $8 billion and needs $4 billion in fresh capital to remain solvent.  FTX.com is attempting to raise rescue financing in the form of debt, equity, or a combination of both.

U.S. Oct CPI rose +7.7% y/y, weaker than expectations of +7.9% y/y and the slowest pace of increase in 9 months.  U.S. Oct CPI ex-food & energy rose +6.3% y/y, weaker than expectations of +6.5% y/y.

U.S. weekly initial unemployment claims rise +7,000 to 225,000, showing a slightly weaker labor market than expectations of an increase to 220,000.

The Euro Stoxx 50 index today is up sharply by +2.13% at a 2-3/4 month high.  European stocks today are sharply higher.  Strength in healthcare stocks is giving the overall market a boost, with AstraZeneca Plc up more than 4% after reporting better-than-expected Q3 earnings results. Also, a decline in European government bond yields supported gains in stocks after the 10-year German bund yield fell to a 1-1/2 week low of 1.999%.  European stocks extended their gains after U.S. stock indexes jumped when U.S. Oct consumer prices rose less than expected. 

ECB Executive Board member Schnabel said the risk of inflation persistence had risen further, and the ECB needs to raise interest rates into restrictive territory.

Italy Sep industrial production fell -1.8% m/m, weaker than expectations of -1.5% m/m.

Asian markets today closed lower.  China’s Shanghai Composite closed down -0.39%, and Japan’s Nikkei Stock Index closed down -0.98%.

China’s Shanghai Composite today closed moderately lower for the third day.  Chinese stocks retreated as optimism has dampened that China’s economy will be able to fully reopen anytime soon due to flareups of new Covid infections.  Also, in a meeting of the new Politburo Standing Committee today, leaders called for “more decisive” measures to curb the spread of Covid, which may lead to additional lockdowns and restrictions.  China reported 8,494 new Covid infections on Tuesday, the most in over six months.

Japan’s Nikkei Stock Index today closed moderately lower.  Japanese stocks were under pressure on negative carry-over from Wednesday’s plunge in U.S. equity markets.  Also, economic concerns weighed on stocks after today’s news showed Japan Oct machine tool orders fell -5.4% y/y, the biggest decline in 2 years. 

Pre-Market U.S. Stock Movers

Unity Software (U) climbed more than +3% in pre-market trading after reporting Q3 revenue of $322.9 million, above the consensus of $322.8 million and raising its full-year revenue forecast to $1.37 billion-$1.39 billion from a previous forecast of $1.30 billion-$1.35 billion, stronger than the consensus of $1.32 billion. 

Cryptocurrency-exposed stocks are moving higher in pre-market trading, with the price of Bitcoin up sharply more than +11% as it recovers from its 2-day plunge.  Coinbase Global (COIN) is up more than +5%.  Also, MicroStrategy (MSTR), Marathon Digital (MARA), and  Riot Blockchain (RIOT) are up more than +4% 

Digital Turbine (APPS) surged more than +20% in pre-market trading after reporting Q2 adjusted Ebitda of $48.2 million, higher than the consensus of $46.3 million. 

Datadog (DDOG) rose more than +2% in pre-market trading on signs of insider buying after an SEC filing showed Matthew Jacobson, a board member, bought $50 million of the company’s stock on Monday.

Coupang (CPNG) jumped more than +10% in pre-market trading after reporting an unexpected Q3 EPS profit of 5.0 cents versus the consensus of a loss of -3.6 cents per share.   

Palo Alto Networks (PANW) gained more than +1% in pre-market trading after Loop Capital Markets upgraded the stock to buy from hold.

Rivian Automotive (RIVN) jumped more than +6% in pre-market trading after reporting a Q3 adjusted loss per share of -$1.57, narrower than the consensus of -$1.86 per share.

ZipRecruiter (ZIP) surged more than +13% in pre-market trading after reporting Q3 revenue of $227.0 million, stronger than the consensus of $220.2 million, and raising its full-year revenue forecast to $897 million-$903 million from a previous forecast of $883 million-$897 million. 

Altria Group (MO) slid nearly -2% in pre-market trading after UBS downgraded the stock to sell from hold.

Bumble (BMBL) sank -15% in pre-market trading after reporting Q3 revenue of $232.6 million, below the consensus of $237.9 million, and forecasting Q4 revenue of $232 million-$237 million, weaker than the consensus of $254 million.

AppLovin (APP) dropped more than -5% in pre-market trading after cutting its full-year revenue forecast to $2.80 billion-$2.81 billion from a previous forecast of $2.84 billion-$3.14 billion.

Beckton Dickinson (BDX) slid more than -1% in pre-market trading after forecasting full-year 2023 adjusted EPS of $11.85 to $12.10, weaker than the consensus of $12.19.

Today’s U.S. Earnings Reports (11/10/2022)

Becton Dickinson and Co (BDX), Ralph Lauren Corp (RL), Tapestry Inc (TPR), TransDigm Group Inc (TDG), Westrock Co (WRK).

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