Markets Today: Stocks Extend Thursday’s Rally as Risk Sentiment Improves

Morning Markets

December S&P 500 futures (ESZ22) this morning are up +0.40% at an 8-week high, and December Nasdaq 100 E-Mini futures (NQZ22) are up +0.49% at a 7-week high.  U.S. stock indexes this morning are extending Thursday’s sharp rally, which occurred after a softer-than-expected U.S. Oct consumer prices improved the prospects for the Fed to slow its pace of interest rate hikes. There is no trading in the cash U.S. Treasury securities market today, which is closed for Veteran’s Day.

Global equity markets are also moving higher today on carry-over support from a +1.69% rally in China’s Shanghai Composite to a 7-week high after the Chinese government eased some of its pandemic travel restrictions. The measures also validate market expectations for an easing of China’s strict Covid Zero policies.

Bitcoin is down more than -2% this morning on concerns about crypto-contagion from the liquidity crisis that has ensnarled crypto-exchange FTX.com.  The exchange is being investigated by the U.S. Securities and Exchange Commission. Also, the Bahamas, where FTX.com is based, froze the assets of FTYX Digital Markets and “related parties.” In addition, crypto lender BlockFi was pausing withdrawals and said it could no longer operate business as usual, citing “a lack of clarity” on the status of FTX.com, FTX, and Alameda Research. 

The Euro Stoxx 50 index today is up by +0.62% and posted a 6-1/2 month high.  European airlines and travel stocks today are climbing after China eased some of its pandemic travel restrictions.  Also, consumer, commodity, and technology stocks rose on the heels of Thursday’s sharp rally in U.S. stocks.  European stocks fell back from their best levels as government bond yields rose after the European Commission raised its 2022 and 2023 Eurozone CPI forecasts.  The 10-year German bund yield is up +13.2 bp to 2.141%. 

The EU Commission raised its Eurozone 2022 GDP forecast to +3.2% from a July forecast of +2.6% and raised its Eurozone 2022 CPI forecast to +8.5% from +7.6%.  Also, the EU Commission cut its Eurozone 2023 GDP forecast to +0.3% from a July forecast of +1.4% and raised its Eurozone 2023 CPI forecast to +6.1% from a July forecast of +4.0%.

Asian markets today closed higher.  China’s Shanghai Composite closed up +1.69%, and Japan’s Nikkei Stock Index closed up +2.98%.

China’s Shanghai Composite today rallied to a 7-week high after the Chinese government eased pandemic travel restrictions.  Chinese airlines and travel companies surged today to lead gainers in the overall market after the government reduced the amount of time inbound travelers must spend in quarantine and scrapped a system that penalized airlines for bringing Covid-positive passengers into the country.  Ctrip.com reported that booking for flights into China doubled in the hour after the government announced an easing of restrictions for inbound travelers.

China cut the time foreign travelers into China must quarantine to five days in a hotel or government facility, followed by three days confined at home from the current policy of 10 days in quarantine.  The same shortened quarantine length will also be applied to close contacts of infected people in China. 

Japan’s Nikkei Stock Index today rallied to an 8-week high on carry-over support from Thursday’s surge in U.S. stocks.  Gains in chipmakers and technology stocks led the overall market higher.  Also, an easing of producer price pressures was positive for equities after today’s news showed Japan's Oct PPI eased to +9.1% y/y from +10.2% y/y in Sep.

Pre-Market U.S. Stock Movers

Mega-cap technology stocks are moving higher in pre-market trading, looking to extend Thursday’s sharp rally.  Amazon.com (AMZN), Alphabet (GOOGL), Apple (AAPL), Microsoft (MSFT), and Nvidia (NVDA) are up +1% or more. 

Walgreens Boots Alliance (WBA) rose more than +2% in pre-market trading after Deutsche Bank upgraded the stock to buy with a price target of $50.

U.S.-listed Chinese stocks are climbing in pre-market trading after China eased some of its Covid Zero policies.  Pinduoduo (PDD), Baidu (BIDU), Alibaba Group Holding (BABA), JD.com (JD), and NetEase (NTES) are up +3% or more.

U.S casino stocks with exposure to Macau are moving higher in pre-market trading after China eased some pandemic travel restrictions.  Las Vegas Sands (LVS), Wynn Resorts (WYNN), and MGM Resorts International (MGM) are up more than +3%.

Doximity (DOCS) surged more than +20% in pre-market trading after reporting Q2 adjusted Ebitda of $46.0 million, better than the consensus of $40.3 million, and forecasts full-year adjusted Ebitda of $178 million-$186 million, the midpoint above the consensus of $181.4 million. 

Toast (TOST) jumped more than +9% in pre-market trading after reporting Q3 revenue of $752 million, stronger than the consensus of $721.4 million, and raising its full-year revenue forecast to $2.69 billion-$2.72 billion from a previous estimate of $2.62 billion-$2.66 billion, well above the consensus of $2.66 billion. 

Intel (INTC) slid nearly -2% in pre-market trading after JPMorgan Chase downgraded the stock to underweight from rating suspended. 

Cryptocurrency-exposed stocks are moving lower in pre-market trading, with the price of Bitcoin down more than +2% on concerns about contagion from the FTX.com liquidity crisis.  Coinbase Global (COIN), MicroStrategy (MSTR), Marathon Digital (MARA), and  Riot Blockchain (RIOT) are all down more than -1%. 

Rexford Industrial Realty (REXR) dropped more than -3% in pre-market trading after the company announced an 11.5 million share offering via Goldman Sachs, JPMorgan Chase, Mizuho Financial, and Bank of America.

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

Boston Omaha Corp (BOC), Celularity Inc (CELU), Fluence Energy Inc (FLNC), Hyzon Motors Inc (HYZN), Innovid Corp (CTV), Inspirato Inc (ISPO), Meridian Bioscience Inc (VIVO), National Energy Services Reunited Corp (NESR), Piedmont Lithium Inc (PLL), Point Biopharma Global Inc (PNT), Provident Bancorp Inc (PVBC), Terawulf Inc (WULF).

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