Markets Today: Stock Indexes Higher on Positive Retailer and Chip News

Morning Markets

December S&P 500 futures (ESZ22) this morning are up +0.92, and December Nasdaq 100 E-Mini futures (NQZ22) are up +1.06%.

Stocks are higher this morning on positive earnings news for retailers and chip stocks.  U.S. stocks are also seeing some carry-over support from a +1.2% rally today in European stocks.  In addition, Bitcoin is up +0.53% today, adding to yesterday’s +0.90% gain and fostering an improved risk-on atmosphere. 

Retailers are seeing support from pre-market rallies in Gap, Ross Stores, and Footlocker on positive earnings and ratings news.

Chip stocks received some good news after chip-equipment maker Applied Materials rallied in pre-market trading after providing better-than-expected sales guidance.

Stock futures are higher this morning despite another day of rising T-note yields.  The 10-year T-note yield today is up +2.8 bp at 3.793%, adding to Thursday’s +8 bp rise.  Still the 10-year yield is trading at a comfortable half-percentage-point below the mid-October 15-year high of 4.34%.

The consensus is for this morning’s Oct existing home sales report to show a -6.6% decline to 4.40 million units.  The consensus is for this morning’s Oct leading economic indicators report to show a -0.4% m/m decline, matching September’s -0.4% decline.

The Euro Stoxx 50 index today is up +1.19%, with leaders including the energy and banking sectors. European stocks are higher this morning despite a +3 bp rise in the 10-year German bund yield to 2.05% and hawkish comments by ECB President Lagarde.

ECB President Lagarde today said, “We expect to raise rates further – and withdrawing accommodation may not be enough.”  She said that the “risk of a recession” has increased.

Asian markets today closed lower.  China’s Shanghai Composite closed down -0.58%, and Japan’s Nikkei Stock Index closed down -0.11%. 

Chinese stocks continue to see downward pressure from rising Covid rates and concern that Chinese authorities will impose new restrictions.  China reported 23,132 new Covid infections on Wednesday, the most in more than 6-1/2 months.   

Pre-Market U.S. Stock Movers

Applied Materials (AMAT) is up more than +4% in pre-market trading after the chip equipment maker issued sales guidance for the current quarter that was better than expected, driven by an improvement in supply-chain disruptions.

DraftKings (DKNG) is up more than +4% after Piper Sandler began coverage with an overweight rating.

Gap (GPS) is up more than +8% this morning on analyst upgrades after the company reported better-than-expected sales.

Ross Stores (ROST) is up more than +16% after the retailer reported better-than-expected Q3 earnings and raised its guidance for its full-year earnings due to sales momentum.

Footlocker (FL) is up more than +13% in pre-market trading after the company reported Q3 sales that indicated solid consumer demand despite inflation pressures.

JD.com (JD) is up +2.75% after the Chinese e-commerce company reported better-than-expected earnings.

Alibaba (BABA) is down more than -2% today after the company missed Q3 revenue estimates, although in a positive factor, the Chinese e-commerce company announced larger stock buybacks.

Today’s U.S. Earnings Reports (11/18/2022)

Atkore Inc (ATKR), Buckle Inc/The (BKE), Ermenegildo Zegna NV (ZGN), Foot Locker Inc (FL), Mitek Systems Inc (MITK), Spectrum Brands Holdings Inc (SPB), Twist Bioscience Corp (TWST).

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