Markets Today: Stock Indexes Climb on Positive Earnings News

Morning Markets

December S&P 500 futures (ESZ22) this morning are up +0.49%, and December Nasdaq 100 E-Mini futures (NQZ22) are up +0.39%.

Stock indexes are moderately higher this morning.   A +3% gain in Analog Devices in pre-market trading is leading gains in technology stocks after the company reported better-than-expected Q4 earnings and raised its forecast for Q1 earnings.  Also, Best Buy jumped more than +7% in pre-market trading after raising its profit forecast for the year.  In addition, energy stocks are climbing in pre-market trading, with crude up nearly +2% after Saudi Arabia pushed back on talk of higher OPEC+ crude production.

In a supportive factor, the 10-year T-note yield this morning is down -4.3 bp at 3.784%.  The 10-year yield is trading at a comfortable half-percentage-point below the mid-October 15-year high of 4.34%.

Bitcoin (^BTCUSD) is up more than +3% this morning as prices recover from Monday’s new 2-year low on modest short covering. 

In a negative factor for global stocks, China reported 27,307 new Covid infections on Monday, the most in more than 6-3/4 months and just below the record 28,793 from April. Covid control restrictions now cover 20% of China's economy, up from 15.6% last Monday, according to Nomura.

The Organization for Economic Co-operation and Development (OECD) predicts global economic growth will slow to 2.2% in 2023 from 3.1% in 2022.

Overseas stocks are mostly higher today, providing carry-over support for U.S. stocks.  The Euro Stoxx 50 index today is up +0.18%.  Gains in energy and mining stocks are leading the overall market higher, while losses in consumer products stocks are weighing on the market.  BP Plc is up more than +6% to lead gains in oil stocks after being upgraded at Citigroup, and Vodaphone Group Plc fell more than -2% after being double-downgraded at Credit Suisse Group AG.

ECB Governing Council member and Bundesbank President Nagel said the ECB will deliver another "robust" interest-rate increase in December and begin quantitative tightening (QT) in early 2023.

China’s Shanghai Composite closed up +0.13%, and Japan’s Nikkei Stock Index closed up +0.61%.  Hopes that regulatory reforms in China may be coming to an end gave technology stocks a boost on reports that Chinese authorities plan to impose a fine of more than $1 billion on Ant Group.  Gains in Chinese stocks were limited by concern Covid restrictions may be extended after China reported 27,307 new Covid infections on Monday, the most in more than 6-3/4 months and just below the record 28,793 from April.

Japan’s Nikkei Stock Index posted moderate gains today as a rally in the mega-cap stocks of Toyota Motor, Sony Group, and Mitsubishi led the overall market higher.  Also, Monday’s decline in the yen to a 1-week low against the dollar gave Japanese exporter stocks a boost. 

Pre-Market U.S. Stock Movers

Analog Devices (ADI) climbed more than +3% in pre-market trading after reporting Q4 adjusted EPS of $2.73, better than the consensus of $2.59, and forecasting Q1 adjusted EPS of $2.50-$2.70, well above the consensus of $2.39.

Walgreens Boots Alliance (WBA) gained more than +1% in pre-market trading after Cowen upgraded the stock to outperform from market perform.

Best Buy (BBY) jumped more than +7% in pre-market trading after raising its adjusted operating income forecast for the year to “slightly higher than 4%” of sales, up from a previous forecast of 4%.

GameStop (GME) rose more than +2% in pre-market trading after Bloomberg reported that billionaire investor Carl Icahn held a large short position in the stock. 

Energy stocks and energy service providers are climbing in pre-market trading, with the price of crude oil up more than +1.5% after Saudi Arabia Energy Minister Prince Abdulaziz bin Salman said Monday, “the current cut of 2 million bpd by OPEC+ will continue until the end of 2023.” Devon Energy (DVN), Marathon Oil (MRO), Haliburton (HAL), Diamondback Energy (FANG), and  ConocoPhillips (COP) are up more than +1%.

Zoom Video Communications (ZM) sank more than -9% in pre-market trading after reporting Q3 revenue of $1.10 billion, below the consensus of $1.11 billion and forecasting Q4 revenue of $1.10 billion-$1.11 billion, weaker than the consensus of $1.12 billion.

U.S.-listed Chinese stocks are trading lower in pre-market trading as increased Covid restrictions reduce optimism about a rapid economic reopening.  Alibaba (BABA), JD.com (JD), Pinduoduo (PDD), and Baidu (BIDU) are down more than -2%.

Dell Technologies (DELL) fell nearly -2% in pre-market trading after forecasting Q4 revenue of as much as $24.0 billion, below the consensus of $24.9 billion.

Medtronic (MDT) is down more than -2% in pre-market trading after reporting Q2 revenue of $7.59 billion, weaker than the consensus of $7.72 billion, and cutting its full-year adjusted EPS forecast to $5.25-$5.30 from a prior forecast of $5.53-$5.65, below the consensus of $5.55.

Airbnb (ABNB) slipped nearly -2% in pre-market trading after Baird downgraded the stock to neutral from outperform.

Today’s U.S. Earnings Reports (11/22/2022)

Analog Devices Inc (ADI), Autodesk Inc (ADSK), Best Buy Co Inc (BBY), Dollar Tree Inc (DLTR), 

HP Inc (HPQ), Medtronic PLC (MDT).

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