Markets Today: Stock Indexes Surge After U.S. Consumer Prices Subside

Morning Markets

December S&P 500 futures (ESZ22) this morning are up +2.71% at a 3-month high, and December Nasdaq 100 E-Mini futures (NQZ22) are up +3.76% at a 3-month high. 

Stock indexes this morning added to overnight gains and surged after U.S. November consumer prices rose less than expected.  U.S. Nov CPI rose +7.1% y/y, a slower pace of increase than expectations of +7.3% y/y and the smallest pace of increase in 11 months.

T-note yields tumbled on the bullish U.S. CPI news as the 10-year T-note yield fell -16.1 bp to 3.450%. The markets are awaiting the status of the Fed’s rate-hike regime after the outcome of the Tuesday/Wednesday FOMC meeting and Fed Chair Powell’s regular post-meeting press conference.   Fed officials have recently signaled that the Fed will downshift to a +50 bp rate hike at the conclusion of this week’s 2-day FOMC meeting on Wednesday after four straight +75 bp increases.

Positive corporate news is also pushing stocks higher in pre-market trading.  Moderna is up more than +7% after reporting the results of ots Phase2 trial of its cancer vaccine with Merck’s KEYTRUDA reduced the risk of relapse or death from melanoma.  Also, Oracle is up more than +2% after reporting stronger-than-expected Q2 revenue.  In addition, Boeing is up more than +2% after United Airlines said it would purchase 100 Dreamliners and another 56 Boeing 737 Max planes.

U.S. Nov CPI rose +0.1% m/m and +7.1% y/y, a slower pace of increase than expectations of +0.3% m/m and +7.4% y/y with the +7.1% y/y gain the smallest pace of increase in 11 months. Also, Nov CPI ex-food & energy rose 0.2% m/m and +6.0% y/y, a slower pace of increase than expectations of +0.3% m/m and +6.1% y/y.

Overseas stocks today are mixed.  The Euro Stoxx 50 index is up +1.58% at an 8-1/2 month high.  European stocks are moderately higher today, led by gains in technology and bank stocks.  Also, airline stocks rose after Deutsche Lufthansa AG jumped more than +3% after raising its full-year earnings estimate for the second time in as many months.   In addition, stocks also garnered support after today’s economic news showed the German Dec ZEW survey expectations of economic growth rose more than expected to a 10-month high.   European stock gains accelerated after U.S. Nov CPI rose less than expected.

The German Dec ZEW survey expectations of economic growth rose +13.4 to a 10-month high of -23.3, stronger than expectations of -26.4.

China’s Shanghai Composite closed down -0.09%, and Japan’s Nikkei Stock Market Index closed up by +0.40%.  The Shanghai Composite fell to a 1-week low today as weakness in Chinese semiconductor stocks weighed on the overall market after Japan and the Netherlands agreed in principle to join the U.S. in tightening controls over the export of advanced chipmaking machinery to China.  However, Chinese semiconductor stocks recovered from their worst levels on a Reuters report that said China is working on a support package of more than 1 trillion yuan ($143 billion) for the semiconductor industry.  Also, Asian airlines and casino stocks gained after Hong Kong eased some Covid restrictions. 

Japan’s Nikkei Stock Index today climbed to a 1-1/2 week high and closed moderately higher. Japanese stocks moved higher today on speculation that U.S. consumer price news on Tuesday will show inflation pressures are subsiding.  Also, Japanese electronics and game makers moved higher after Sony reported that PlayStation 5 sales surged by 45% in the U.S. in November as supply woes eased.

Pre-Market U.S. Stock Movers

Oracle (ORCL) is up more than +2% in pre-market trading after reporting Q2 adjusted revenue of $12.28 billion, above the consensus of $12.02 billion. 

Moderna (MRNA) jumped more than +7% in pre-market trading after reporting a Phase 2b trial of its cancer vaccine with Merck’s KEYTRUDA demonstrated a statistically significant and clinically meaningful improvement of patients with stage III/IV melanoma following complete resection. 

Boeing (BA) climbed nearly +2% in pre-market trading after United Airlines Holdings announced that it agreed to buy 100 Boeing 787 Dreamliners and 56 Boeing 737 Max planes. 

Pfizer (PFE) gained more than +1% in pre-market trading after Goldman Sachs upgraded the stock to buy from neutral.

Pinterest (PINS) jumped more than +3% in pre-market trading after Piper Sandler upgraded the stock to overweight from neutral.

Equinix (EQIX) gained more than +1% in pre-market trading after Cowen upgraded the stock to outperform from market perform.

Fiverr International Ltd (FVRR) rose more than +2% in pre-market trading after Citigroup initiated coverage on the stock upgraded with a buy rating and a price target of $45. 

NetApp (NTAP) fell more than -2% in pre-market trading after Morgan Stanley downgraded the stock to underweight from equal weight. 

Eli Lilly (LLY) slid nearly -2% in pre-market trading after forecasting 2023 adjusted EPS of $8.10-$8.30, well below the consensus of $9.13. 

Huntington Bancshares (HBAN) fell more than -1% in pre-market trading after JPMorgan Chase downgraded the stock to underweight from neutral.   

Norwegian Cruise Line Holdings Ltd (NCLH) fell more than -1% in pre-market trading after UBS downgraded the stock to neutral from buy on cost uncertainty.

KeyCorp (KEY) slid more than -1% in pre-market trading after JPMorgan Chase downgraded the stock to underweight from neutral. 

Today’s U.S. Earnings Reports (12/13/2022)

ABM Industries Inc (ABM), Alico Inc (ALCO), Core & Main Inc (CNM), F&G Annuities & Life Inc (FG), IronNet Inc (IRNT), Photronics Inc (PLAB), Value Line Inc (VALU).

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