December Nasdaq 100 E-Mini futures (NQZ24) are trending up +1.33% this morning as market participants cheered forecast-beating quarterly results and guidance from semiconductor giant Micron, while also awaiting a flurry of U.S. economic data and remarks from Federal Reserve officials.
Micron Technology (MU) surged over +15% in pre-market trading after the memory chipmaker reported stronger-than-expected Q4 results and provided above-consensus Q1 guidance.
In yesterday’s trading session, Wall Street’s major indices closed mixed. Global Payments (GPN) slumped over -6% and was the top percentage loser on the S&P 500 after BTIG, William Blair, and Seaport Research downgraded the stock. Also, KB Home (KBH) slid more than -5% after the homebuilder reported weaker-than-expected Q3 EPS. In addition, General Motors (GM) fell over -4% after Morgan Stanley downgraded the stock to Underweight from Equal Weight with a price target of $42. On the bullish side, Vistra (VST) climbed about +6% and was the top percentage gainer on the S&P 500 after Morgan Stanley raised its price target on the stock to $132 from $110. Also, chip stocks advanced, with Intel (INTC) rising over +3% to lead gainers in the Dow and Nvidia (NVDA) gaining more than +2%.
Economic data released on Wednesday showed that U.S. new home sales fell -4.7% m/m to 716K in August, a smaller decline than expectations of 699K.
Fed Governor Adriana Kugler stated on Wednesday that she “strongly supported” the U.S. central bank’s decision last week, noting that it would be appropriate to implement additional rate cuts if inflation continues to ease as anticipated. “The labor market remains resilient, but the FOMC now needs to balance its focus so we can continue making progress on disinflation while avoiding unnecessary pain and weakness in the economy as disinflation continues in the right trajectory,” Kugler said.
U.S. rate futures have priced in a 39.3% chance of a 25 basis point rate cut and a 60.7% chance of a 50 basis point rate cut at November’s monetary policy meeting.
Meanwhile, Fed Chair Jerome Powell is scheduled to deliver pre-recorded opening remarks at the 2024 U.S. Treasury Market Conference later in the day. Also, a slew of other Fed officials will speak today, including Collins, Bowman, Williams, Kugler, Cook, and Kashkari.
On the earnings front, notable companies like Costco Wholesale (COST), Accenture (ACN), Jabil Circuit (JBL), and CarMax (KMX) are slated to release their quarterly results today.
On the economic data front, all eyes are on the Commerce Department’s final estimate of gross domestic product, which is set to be released in a couple of hours. Economists, on average, forecast that U.S. GDP will stand at +3.0% q/q in the second quarter, compared to the first-quarter figure of +1.4% q/q.
Also, investors will focus on U.S. Durable Goods Orders data, which came in at +9.9% m/m in July. Economists foresee the August figure to be -2.8% m/m.
U.S. Core Durable Goods Orders data will be reported today. Economists estimate this figure to come in at +0.1% m/m in August, compared to the previous number of -0.2% m/m.
U.S. Pending Home Sales data will come in today. Economists expect the August figure to be +0.9% m/m, compared to the previous figure of -5.5% m/m.
U.S. Initial Jobless Claims data will be reported today as well. Economists estimate this figure to be 224K, compared to last week’s number of 219K.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 3.776%, down -0.24%.
The Euro Stoxx 50 futures are up +1.68% this morning as an upbeat earnings report from Micron and China’s pledge for fiscal stimulus lifted global sentiment, while investors awaited remarks from European Central Bank President Christine Lagarde. Mining and technology stocks led the gains on Thursday. A survey released on Thursday indicated that German consumer sentiment is expected to improve slightly heading into October, fueled by better income expectations and a somewhat less pessimistic buying tendency among consumers. Meanwhile, the Swiss National Bank reduced its key interest rate by 25 basis points to 1.0% on Thursday. Investors are now anticipating speeches from numerous ECB board members later in the day, with remarks from President Christine Lagarde taking center stage. In corporate news, H & M Hennes & Mauritz Ab (HMB.S.DX) slumped over -3% after the world’s second-largest listed fashion retailer reported weaker-than-expected operating profit for the June-August period and abandoned its full-year earnings margin target.
Germany’s GfK Consumer Climate Index was released today.
The German October GfK Consumer Climate Index came in at -21.2, stronger than expectations of -22.4.
Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +3.61%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +2.79%.
China’s Shanghai Composite Index closed sharply higher today, surpassing the key 3,000 level for the first time since June, following pledges by top Chinese officials for additional stimulus, including potential fiscal support. Property and consumer products stocks led the gains on Thursday. In a rare declaration of direct aid, Chinese authorities announced on Wednesday that they would provide one-time cash handouts to individuals in extreme poverty ahead of a key national holiday next week, as reported by the state broadcaster CCTV. Meanwhile, China’s top leaders held an unexpected meeting to deliberate on stimulus measures, highlighting an increasing urgency among policymakers to bolster a faltering economy in the face of escalating challenges. The ruling Communist Party’s Politburo, China’s top decision-making body, vowed Thursday to provide increased fiscal and monetary support to the economy and take additional steps to stabilize the struggling housing sector. In other news, Bloomberg reported on Thursday that China is contemplating an injection of up to 1 trillion yuan ($142 billion) of capital into its largest state banks to enhance their ability to bolster the faltering economy. Such an action would mark the first time since the 2008 global financial crisis that Beijing has infused capital into its major banks. In corporate news, Do-Fluoride New Materials gained over +4% after it agreed to establish a 100 million yuan joint venture with Xianghe Kunlun New Energy Materials.
Japan’s Nikkei 225 Stock Index closed sharply higher today, reaching its highest level since July 31st. Semiconductor-related stocks led the gains on Thursday. Those moves occurred as Micron Technology soared in after-hours trading in the U.S. after reporting upbeat Q4 results and providing a strong Q1 forecast. Meanwhile, the yen traded at around 144.9 per dollar following a decline of more than 1% against the greenback on Wednesday. The minutes from the Bank of Japan’s July policy meeting, released on Thursday, revealed that members urged vigilance regarding upside inflation risks, yet cautioned against fostering excessive market expectations of future rate hikes. At least two of the nine-member board believed there was room to increase rates further, with one member suggesting that the BOJ should raise borrowing costs in a “timely and gradual” manner to prevent the necessity for rapid hikes later. However, several others cautioned against moving too quickly to phase out stimulus. Investors are now shifting their focus to Tokyo’s inflation data, scheduled for release on Friday. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +5.01% to 26.01.
Pre-Market U.S. Stock Movers
Micron Technology (MU) surged over +15% in pre-market trading after the memory chipmaker reported stronger-than-expected Q4 results and provided above-consensus Q1 guidance.
NRG Energy (NRG) climbed more than +7% in pre-market trading after raising its full-year adjusted EBITDA guidance.
Starbucks (SBUX) gained about +3% in pre-market trading after Bernstein upgraded the stock to Outperform from Market Perform with a price target of $115.
Bilibili (BILI) advanced over +9% in pre-market trading after Goldman Sachs upgraded the stock to Buy from Neutral with a price target of $22.60.
New York Community Bancorp (NYCB) rose more than +3% in pre-market trading after Barclays upgraded the stock to Overweight from Equal Weight with an unchanged price target of $14.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - September 26th
Costco (COST), Accenture (ACN), Jabil Circuit (JBL), CarMax (KMX), TD Synnex (SNX), Vail Resorts (MTN), BlackBerry (BB), Scholastic (SCHL).
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On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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