Markets Today: Stocks Little Changed After Mixed Earnings and Economic News

Morning Markets

December S&P 500 futures (ESZ22) this morning are up +0.02%, and December Nasdaq 100 E-Mini futures (NQZ22) are up +0.07%.

Stock indexes this morning are steady to slightly higher.  On the positive side, Deere & Co is up more than +4% in pre-market trading after reporting stronger-than-expected Q4 net income and raising its 2023 net income forecast.  Also, Tesla is up more than +2% after Citigroup upgraded the stock to neutral from sell. 

On the bearish side, Nordstrom fell -7% after it reported weaker-than-expected Q3 net sales.  Also, Autodesk is down more than -9% after reporting fewer-than-expected Q3 billings and cutting its full-year billings estimate. In addition, energy producers are under pressure this morning, with crude prices down more than -2% as the EU discusses a price cap on Russian oil of between $65 and $70 a barrel.

In a bearish factor, the 10-year T-note yield this morning is up +3.2 bp at 3.787%.  The markets are eagerly await the minutes of the Nov 1-2 FOMC meeting later this afternoon for confirmation of market expectations that the FOMC at its next meeting on December 13-14 will dial back to a +50 bp rate hike from the +75 bp rate hike seen at the last four meetings. 

Bitcoin (^BTCUSD) is up more than +2% this morning as prices continue to recover from Monday’s 2-year low on modest short covering.  The crypto market is watching to see if there will be more fall-out from the FTX debacle.

In a negative factor for global stocks, China reported 28,183 new Covid infections on Tuesday, the most in nearly 7 months and just below April’s record of 28,793.  Covid control restrictions now cover 20% of China's economy, up from 15.6% last Monday, according to Nomura.

U.S. economic news today is mixed for stocks.  On the positive side, Oct capital goods new orders nondefense ex-aircraft rose +0.7% m/m, stronger than expectations of unchanged.  Conversely, weekly initial unemployment claims rose +17,000 to a 3-1/4 month high of 240,000, showing a weaker labor market than expectations of 225,000.

Overseas stocks are mostly higher today, providing carry-over support for U.S. stocks.  The Euro Stoxx 50 index today climbed to a 7-month high and is up +0.21%.  Better-than-expected Eurozone economic news today on manufacturing and services activity is giving stocks a boost.  Also, mining stocks are moving higher today, led by a gain of more than +4% in Glencore Plc, after Bernstein upgraded the stock to outperform from market perform.   Gains in the overall market were limited after ECB Vice President Guindos said the Eurozone economy is likely to contract in Q4 and Q1-2023.

The Eurozone Nov S&P Global manufacturing PMI unexpectedly rose +0.9 to 47.3, stronger than expectations of a decline to 46.0.  Also, the Eurozone Nov S&P Global composite PMI unexpectedly rose +0.5 to 47.8, stronger than expectations of a decline to 47.0.

China’s Shanghai Composite closed up +0.26%, and Hong Kong’s Hang Seng Index closed up +0.57%.  Japanese markets were closed today for the Labor Thanksgiving holiday. Chinese stocks found support today on signs the government may boost stimulus measures after China’s State Council vowed to ramp up support for the economy.  However, gains in the overall market were limited by concern Covid restrictions may be extended after China reported 28,183 new Covid infections on Tuesday, the most in more than 6-3/4 months and just below the record 28,793 from April.

China's State Council said today that tools such as cutting banks' required reserve ratio would be used "in a timely and appropriate manner" to maintain reasonably ample liquidity.  The PBOC usually follows such statements from the country's cabinet within days by cutting the amount of cash banks are forced to maintain in reserves.

Pre-Market U.S. Stock Movers

Tesla (TSLA) gained more than +2% in pre-market trading after Citigroup upgraded the stock to neutral from sell. 

Deere & Co (DE) jumped more than +4% in pre-market trading after reporting Q4 net income of $2.25 billion, stronger than the consensus of $2.13 billion, and forecasting 2023 net income of $8.0 billion to $8.5 billion, higher than the consensus of $7.81 billion.

U.S. cryptocurrency-exposed stocks are moving higher in pre-market trading, with the price of Bitcoin up more than +2%.  Coinbase Global (COIN), Riot Blockchain (RIOT), and Marathon Digital (MARA) are up more than +3%.  Also, Bit Digital (BTBT) is up more than +2%.   

HP Inc (HPQ) rose more than +3% in pre-market trading after it said it would cut as many as 6,000 jobs over the next three years amid weakening demand for personal computers and printers. 

Zimmer Biomet Holdings (ZBH) rose nearly +2% in pre-market trading after Wells Fargo Securities upgraded the stock to equal weight from underweight.

Manchester United Plc (MANU) surged more than +11% in pre-market trading on reports the owners of the club are working with financial advisers on a partial sale of the club or investments, including stadium and infrastructure redevelopment. 

Nordstrom (JWN) tumbled more than -7% in pre-market trading after reporting Q3 net sales of $3.43 billion, below the consensus of $3.47 billion.

Energy stocks and energy service providers are weaker in pre-market trading, with the price of crude oil down more than -2% after the European Union said it is discussing a price cap on Russian oil of between $65 and $70 a barrel.  Devon Energy (DVN), Marathon Oil (MRO), Haliburton (HAL), Diamondback Energy (FANG), and  ConocoPhillips (COP) are down more than -1%.

Autodesk (ADSK) sank more than -9% in pre-market trading after reporting Q3 billings of $1.36 billion, below the consensus of $1.42 billion, and cutting its full-year billings forecast to $5.57 billion-$5.67 billion from a prior estimate of $5.71 billion-$5.81 billion, weaker than the consensus of $5.73 billion. 

Medtronic (MDT) is down more than -1% in pre-market trading after Citigroup downgraded the stock to neutral from buy. 

Southern Copper (SCCO) slipped nearly -2% in pre-market trading after Deutsche Bank downgraded the stock to sell from hold.

Today’s U.S. Earnings Reports (11/23/2022)

Deere & Co (DE), Latch Inc (LTCH), Vinco Ventures Inc (BBIG).

• Why Return to Work Could Be a Killer for Zoom Video Communications (ZM)
• How To Buy BAC Stock For An 8% Discount Or Achieve An 18% Return
• Pre-Market Brief: Stocks Climb Ahead of FOMC Meeting Minutes
• Is Hasbro a Buy Now That It’s Selling eOne?