Pre-Market Brief: Stocks Climb Ahead of Key U.S. PPI Data

December S&P 500 futures (ESZ22) are trending up +0.73% this morning after three major US benchmark indices finished the regular trading session in the red as last week’s optimism about slowing inflation pressures faded, with investors digesting comments from the Fed’s Brainard and Waller. Three major U.S. stock indexes were weighted down primarily by losses in the Financials, Consumer Goods, and Utilities sectors. 

Wall Street ended Monday's trading session lower, with real estate and discretionary sectors leading broad declines, as market participants reacted to Federal Reserve Gov. Christopher Waller's comments about Fed's policy path. However, stocks briefly erased losses after Fed Vice Chair Lael Brainard said on Monday that it probably would be “appropriate soon to move to a slower pace of increases” but emphasized the Fed still had more work to do.

"There is still a sensitivity to Fed speak... One was a little hawkish, one was a little dovish," said Eric Kuby, a chief investment officer at North Star Investment Management Corp.

Meanwhile, U.S. rate futures have priced in an 80.6% chance of a 50 basis point rate increase and a 19.4% chance of a 75 basis point hike at December's monetary policy meeting. 

Today, all eyes are focused on the U.S. Producer Price Index (PPI) data in a couple of hours. Economists, on average, forecast that October U.S. PPI will stand at +0.4% m/m, compared to the September figure of +0.4% m/m.

Also, market participants are likely to focus on a batch of comments from Fed officials Harker, Cook, and Barr, for further clues on the Fed's plans for monetary policy.

"It just makes sense the market wants to pause and really both try to make sense of the trajectory of Fed policy and what the next drivers are going to be,” said Yung-Yu Ma, a chief investment strategist at BMO Wealth Management.

U.S. Core PPI data will be reported today as well. Economists estimate this figure to come in at +0.3% m/m in October, in line with the previous value of +0.3% m/m.

In the bond markets, United States 10-Year rates are at 3.812%, down -1.41%.

The Euro Stoxx 50 futures are up +0.21% this morning, with a batch of economic data offering a view of the outlook for the region and the global economy. In addition, dovish comments from European Central Bank policymaker Fabio Panetta and Cypriot policymaker Constantinos Herodotou helped European equities on Monday, sending European bond yields lower. However, the ECB still has a lot of work to do with its rate hikes to return inflation to the target.

U.K. Average Earnings Index +Bonus, Claimant Count Change, U.K. Unemployment Rate, France CPI, Spain CPI, Germany ZEW Economic Sentiment, and Eurozone GDP (preliminary) data were released today.

U.K. September Average Earnings Index +Bonus has been reported at 6.0%, stronger than expectations of 5.9%.

U.K. October Claimant Count Change stood at 3.3K, stronger than expectations of 17.3K. 

U.K. September Unemployment Rate was at 3.6%, weaker than expectations of 3.5%.

The French October CPI came in at +6.2% y/y, weaker than expectations of +7.1% y/y.

The Spanish October CPI stood at +7.3% y/y, in line with expectations. 

The German November ZEW Economic Sentiment has been reported at -36.7, stronger than expectations of -50.0.

Eurozone GDP stood at +0.2% q/q in Q3, in line with expectations.

Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +1.64%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.10%.

China’s Shanghai Composite today closed sharply higher as investors held out for more stimulus measures by the government to withstand the economic pressure from COVID-19 restrictions. The People’s Bank of China held interest rates steady on Tuesday but pumped a significant amount of liquidity into the market to support the Chinese economy. Soft industrial production and retail sales data released on Tuesday also bolstered hopes that the government will roll out more spending measures to support growth.

At the same time, Japan’s Nikkei 225 Stock Index closed slightly higher today after data disclosed the world’s third-largest economy unexpectedly shrank in the third quarter, with Japan's GDP standing at -0.3% q/q and -1.2% y/y in Q3. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down 2.17% and hit a new 1-month low of 19.87.

Pre-Market U.S. Stock Movers

Azenta Inc (AZTA) jumped about +35% in pre-market trading after the company reported upbeat Q4 earnings and provided above-consensus guidance.

Shoals Technologies Group Inc (SHLS) spiked over +20% in pre-market trading after the company released an upbeat Q3 report and provided favorable FY22 revenue guidance.

Nu Holdings Ltd (NU) gained more than +14% in pre-market trading after the company reported better-than-expected Q3 earnings.

ImmunoGen Inc (IMGN) rose about +10% in pre-market trading after the U.S. Food and Drug Administration granted accelerated approval for ELAHERE.

Taiwan Semiconductor Manufacturing (TSM) climbed about +10% in pre-market trading after Warren Buffett's Berkshire Hathaway showed a new 60,060,880 share position.

Getty Images Holdings Inc (GETY) plunged about -13% in pre-market trading after the company announced weaker-than-expected Q3 results.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - November 15th

Walmart (WMT), Home Depot (HD), Prudential Public ADR (PUK), Rosneft DRC (OJSCY), Infineon ADR (IFNNY), Lonza Group AG (LZAGY), Fortescue Metals (FSUMF), Vodafone Group ADR (VOD), Alcon (ALC), Citic ADR (CTPCY), Sea (SE), Techtronic Industries ADR (TTNDY), Imperial Brands (IMBBY), Trip.com ADR (TCOM), Surgutneftegaz ADR (SGTZY), Polyus ADR (OPYGY), Shaw B (SJR), Siemens Gamesa ADR (GCTAY), Brookfield Renewable (BEPC), Advance Auto Parts (AAP), Sonic Healthcare ADR (SKHHY), Brambles ADR (BXBLY), Aramark Holdings (ARMK), Kepco ADR (KEP), ASX ADR (ASXFY), Koc Holdings AS (KHOLY), Tencent Music Entertainment Group (TME), Woori Financial (WF), KT (KT), Berry Global (BERY), Nedbank Group Ltd (NDBKY), Allkem (OROCF), Valvoline (VVV), Evoqua Water (AQUA), Grupo Simec ADR (SIM), Endava (DAVA), San Miguel ADR (SMGBY), Beijing Capital Airport ADR (BJCHY), Autogrill ADR (ATGSY), Renew Energy Global (RNW), Ozon (OZON), Krispy Kreme (DNUT), Aperam PK (APEMY), iQIYI (IQ), IHS Holding (IHS), Energizer (ENR), YY A (YY), HUTCHMED DRC (HCM), FLEX LNG (FLNG), Paladin Energy (PALAF), Banco Macro B ADR (BMA), Bumi Resources ADR (PBMRY), Embotelladora Andina B ADR (AKOb), Cresco Labs (CRLBF), Meridian (VIVO), Sabine Royalty Trust (SBR), Oaktree Specialty Lending (OCSL), Oaktree Specialty Lending (OCSL), Ferroglobe (GSM), Seabridge Gold (SA).

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