Pre-Market Brief: Stocks Climb Ahead of FOMC Meeting Minutes

December S&P 500 futures (ESZ22) are trending up +0.15% after three major US benchmark indices finished the regular session higher, with the S&P 500 closing at its highest level in 2-1/2 months, as investors proved optimistic amid easing inflation pressures and prospects of smaller interest rate increases from the U.S. Federal Reserve. Three major U.S. stock indexes were fueled primarily by gains in the Oil & Gas, Basic Materials, and Technology sectors.

In Tuesday's trading session, Best Buy (BBY) shot up nearly 13% after the retailer lifted full-year guidance and expressed confidence a ramp-up in deals and discounts would attract more customers. Also, energy stocks closed higher after two sessions of declines as oil prices continued to rise after Saudi Arabia said OPEC+ was sticking with output cuts. Tech stocks closed in the green as well, boosted by lower Treasury yields ahead of the release of the minutes from the Federal Reserve’s November meeting.

Cleveland Fed President Loretta Mester reiterated on Tuesday that cooling off inflation remains critical for the central bank, supporting a smaller rate hike in December a day earlier. Kansas City President Esther George said the Fed might need to hike interest rates to a higher level and hold them for longer to cool inflation.

The spotlight of Wednesday's trading session is likely to be the release of the Fed minutes from the last meeting. The report will be closely watched for further clues on the central bank’s future monetary policy path amid increasing speculation of a smaller 50 basis point hike in December as inflation pressures relief.

Also, investors are likely to focus on the U.S. Core Durable Goods Orders data, which was at -0.5% m/m in September. Economists foresee the October figure to be +0.1% m/m.

U.S. Michigan Consumer Sentiment Index will be reported today. Economists foresee this figure to stand at 55.0 in November, compared to the previous number of 54.7.

U.S. Building Permits and U.S. New Home Sales data will also be closely watched today. Economists forecast Building Permits to be at 1.526M and October New Home Sales to come in at 570K.

U.S. Initial Jobless Claims data will be reported today. Economists, on average, forecast that Initial Jobless Claims will come in at 225K, compared to the last week's figure of 222K.

Also, S&P Global will release PMI preliminary data for November today. Economists expect Manufacturing PMI to stand at 50.0 and Services PMI at 47.9.

U.S. Crude Oil Inventories data will be reported today as well. Economists estimate this figure to come in at -1.055M, compared to last week's value of -5.400M.

In the bond markets, United States 10-Year rates are at 3.745%, down -0.36%.

The Euro Stoxx 50 futures are up +0.15% this morning, boosted by stronger-than-expected PMI readings in the region. At the same time, investors digested new COVID-19 restrictions in China, awaiting the release of the minutes from the last Federal Reserve meeting. China's Covid situation is weighing on risk appetite as investors fret about the potential induction of harsh lockdown conditions, hitting economic activity in the major export market from European companies.

France Manufacturing PMI, France Services PMI, Germany Manufacturing PMI, Germany Services PMI, Eurozone Manufacturing PMI, Eurozone S&P Global Composite PMI, Eurozone Services PMI, U.K. Composite PMI, U.K. Manufacturing PMI, and U.K. Services PMI preliminary data were released today. 

The French November Manufacturing PMI stood at 49.1, stronger than expectations of 47.0.

The French November Services PMI was 49.4, weaker than expectations of 50.6.

The German November Manufacturing PMI has been reported at 46.7, stronger than expectations of 45.0.

The German November Services PMI stood at 46.4, stronger than expectations of 46.2.

Eurozone November Manufacturing PMI came in at 47.3, stronger than expectations of 46.0.

Eurozone November S&P Global Composite PMI was at 47.8, stronger than expectations of 47.0.  

Eurozone November Services PMI stood at 48.6, stronger than expectations of 48.0.

U.K. Composite PMI has been reported at 48.3, stronger than expectations of 47.2.

U.K. Manufacturing PMI came in at 46.2, stronger than expectations of 45.7.

U.K. Services PMI stood at 48.8, stronger than expectations of 48.0.

Asian stock markets today settled in the green, tracking a recovery in Wall Street. China’s Shanghai Composite Index (SHCOMP) closed up +0.26%, while the Japanese market was closed for the holidays. 

China’s Shanghai Composite today closed higher as market participants awaited more cues on U.S. monetary policy. However, rising COVID-19 cases in the country limited the index's gains as traders feared more disruptions. Case numbers are rising steadily in several major cities, including Beijing and Shanghai, prompting authorities to introduce new restrictions. A resurgence in COVID-19 cases is likely to slow economic growth in the second-largest economy in the coming months.

"The biggest story for investors in Asia is still the China reopening," said Suresh Tantia, Credit Suisse's senior investment strategist in Singapore.

Pre-Market U.S. Stock Movers

Manchester United Ltd (MANU) climbed over +8% in pre-market trading after the company's board launched a process to explore strategic alternatives for the club, including a sale.

Carvana Co (CVNA) gained about +4% in pre-market trading after the company's chief product officer acquired 133,000 class A shares of the company.

Nordstrom Inc (JWN) plunged over -9% in pre-market trading after the company posted a stronger-than-expected Q3 report but issued weak full-year guidance.

Autodesk Inc (ADSK) dropped about -9% in pre-market trading after the company reported in-line Q3 results and provided a soft Q4 and FY23 outlook.

HP Inc (HPQ) rose about +1% in pre-market trading after the company reported upbeat Q4 results and provided a job cuts plan.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - November 23rd

Deere&Company (DE), Prudential Public ADR (PUK), Fortescue Metals (FSUMF), Lonza Group AG (LZAGY), Citic ADR (CTPCY), Naspers ADR (NPSNY), Techtronic Industries ADR (TTNDY), Trip.com ADR (TCOM), Li Auto (LI), Campbell Soup (CPB), Polyus ADR (OPYGY), Surgutneftegaz ADR (SGTZY), Siemens Gamesa ADR (GCTAY), Bank Hapoalim ADR (BKHYY), Brambles ADR (BXBLY), Sonic Healthcare ADR (SKHHY), Koc Holdings AS (KHOLY), ASX ADR (ASXFY), United Utilities ADR (UUGRY), Legend Bio (LEGN), Nedbank Group Ltd (NDBKY), Allkem (OROCF), Ayala ADR (AYALY), Ackermans Van Haaren ADR (AVHNY),Grupo Simec ADR (SIM), Johnson Matthey (JMPLY), UOL ADR (UOLGY), Lufax (LU), Beijing Capital Airport ADR (BJCHY), Autogrill ADR (ATGSY), Manchester United (MANU), Britvic ADR (BTVCY), Kenon Holdings (KEN), Banco Macro B ADR (BMA), Partner ADR (PTNR), Telkom SA SOC (TLKGY), Up Fintech (TIGR), Kingsoft Cloud (KC), Mesoblast (MESO), Mesoblast (MEOBF), IQE (IQEPF), Cango (CANG), Aurora Mobile (JG), Avaya (AVYA), ImmunoCellular (IMUC), AstroNova (ALOT), Viomi Technology (VIOT), Sunlands Tech (STG), Via Optronics (VIAO).

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