Pre-Market Brief: Stocks Mostly Lower Ahead of Key U.S. GDP Data

March S&P 500 futures (ESH23) are trending down -0.10% this morning after three major U.S. benchmark indices rallied on Wednesday, notching their biggest one-day percentage gains this month as upbeat corporate earnings from Nike and FedEx, and strong consumer confidence data soothed recession fears. Three major U.S. stock indexes were fueled primarily by gains in the Oil & Gas, Industrials, and Technology sectors.

In Wednesday’s trading session, shares of Nike Inc (NKE) jumped over +12% after the athletic apparel maker topped profit expectations and said consumer demand remained strong as it continues to make progress with its inventory issues. FedEx Corp (FDX) gained about +3.4% after the company reported better-than-expected quarterly results and announced plans to cut a further $1 billion in costs.

“Nike made progress moving through excess inventory in North America and ended 2Q with inventory up 54% year-on-year vs. 65% at the end of 1Q,” Deutsche Bank said in a note.

Data on Wednesday showed that U.S. consumer confidence increased to an eight-month high in December as inflation retreated and the labor market remained robust, easing fears about a recession. However, U.S. existing home sales dropped 7.7% m/m to a 2-1/2-year low in November, hurt by higher mortgage rates.

“Consumer expectations for any potential deterioration in the labor market, more modest expectations for wage gains, and concern about a recession have seemingly retreated,” Jefferies said in a note.

Today, all eyes are focused on the U.S. GDP data in a couple of hours. Economists, on average, forecast that U.S. GDP will stand at +2.9% q/q in the third quarter, compared to the second-quarter value of -0.6% q/q.

Also, investors will likely focus on the U.S. GDP Price Index, which was at +9.1% q/q in the second quarter. Economists foresee the new figure to be +4.3% q/q.

U.S. Initial Jobless Claims data will be reported today as well. Economists estimate this figure to be 222K, compared to last week’s value of 211K.

In the bond markets, United States 10-Year rates are at 3.640%, down -1.21%.

The Euro Stoxx 50 futures are down -0.23% this morning, with market participants digesting the latest growth data from the U.K. The data showed that Britain’s gross domestic product stood at -0.3% q/q and +1.9% y/y in the third quarter, weaker than expectations of -0.2% q/q and +2.4% y/y, as the country’s economy head towards the recession the Bank of England signaled last month. The BoE hiked interest rates last week to curb multi-decade high inflation. In addition, the central bank warned in November that tightening monetary policy could plunge the U.K. economy into the longest recession in 100 years.

U.K. Current Account data was also released today.

U.K. Current Account has been reported at -19.4B in Q3, stronger than expectations of -20.8B.

Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.46%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.46%.

China’s Shanghai Composite today closed lower as uncertainty over a Chinese economic reopening amid a surge of Covid infections continued to chip away at the sentiment. At the same time, investors face an increasing number of signs that Beijing plans to fully scale back its strict zero-COVID strategy by 2023.

Japan’s Nikkei 225 Stock Index closed higher after the country’s government revised its growth forecast upward for the next fiscal year on hopes for higher business expenses and significant wage increases. The index’s upward momentum was fueled by gains in the Retail, Transport, and Communication sectors. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down 3.08% to 20.74.

Pre-Market U.S. Stock Movers

IsoPlexis Corp (ISO) jumped about +65% in pre-market trading after announcing that Berkeley Lights would acquire the company in an all-stock transaction valued at $57.8M.

Micron Technology Inc (MU) slid over -2% in pre-market trading after the company reported weaker-than-expected Q1 results and issued soft Q2 guidance.

Lam Research Corp (LRCX) dropped about -2% in pre-market trading following results and guidance from Micron.

Mirati Therapeutics (MRTX) climbed more than +3% in pre-market trading after the company announced that the FDA granted BTD to adagrasib in combination with cetuximab in patients with KRASG12C-mutated, advanced CRC whose cancer has progressed following prior treatment with chemotherapy and anti-VEGF therapy.

Oric Pharmaceuticals Inc (ORIC) gained over +49% in pre-market trading after the company entered into clinical development collaboration with Pfizer for a potential Phase 2 study of ORIC-533 in multiple myeloma.

Lexicon Pharmaceuticals Inc (LXRX) plunged about -8% in pre-market trading after the company announced topline results of RELIEF-PHN-1, its Phase 2 proof-of-concept study of LX9211 in postherpetic neuralgia.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - December 22nd

Paychex (PAYX), Siemens Gamesa ADR (GCTAY), CarMax (KMX), Sprott Physical Gold and Silver Trust (CEF), Neogen (NEOG), Mission Produce (AVO), Apogee (APOG), Mitek (MITK), GoGold Resources Inc. (GLGDF), Oramed (ORMP), Gold Royalty (GROY), Blade Air Mobility (BLDE), Limoneira (LMNR), Mesabi Trust (MSB), Byrna Technologies (BYRN), Citius Pharma (CTXR), Inotiv (NOTV), CEL-SCI (CVM), BeyondSpring (BYSI), RF Industries (RFIL), MOGU (MOGU).

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