Nasdaq Futures Climb on Netflix Boost, U.S. Housing Data and Fed Speak on Tap

December Nasdaq 100 E-Mini futures (NQZ24) are trending up +0.40% this morning as upbeat results from streaming giant Netflix lifted market sentiment, while investors awaited fresh data on the U.S. housing market as well as comments from Federal Reserve officials.

Netflix (NFLX) climbed over +5% in pre-market trading after the streaming giant topped Wall Street’s expectations across all key metrics in its Q3 earnings report and provided solid Q4 guidance.

In yesterday’s trading session, Wall Street’s major indexes closed mixed, with the blue-chip Dow notching a new record high. Snap-on Inc. (SNA) surged about +10% and was the top percentage gainer on the S&P 500 after the maker of hand tools reported better-than-expected Q3 EPS. Also, chip stocks gained ground after Taiwan Semiconductor Manufacturing Co. posted upbeat Q3 results and raised its target for 2024 revenue growth, with Broadcom (AVGO) rising more than +2% to lead gainers in the Nasdaq 100 and Arm (ARM) advancing over +1%. In addition, Travelers Cos. (TRV) climbed +9% and was the top percentage gainer on the Dow after reporting stronger-than-expected Q3 results. On the bearish side, Elevance Health (ELV) tumbled more than -10% after the insurer cut its full-year adjusted EPS guidance.

Economic data released on Thursday showed that U.S. retail sales rose +0.4% m/m in September, stronger than expectations of +0.3% m/m, while core retail sales, which exclude motor vehicles and parts, climbed +0.5% m/m, beating the +0.1% m/m consensus. Also, the U.S. October Philadelphia Fed manufacturing index came in at 10.3, stronger than expectations of 4.2. In addition, U.S. industrial production fell -0.3% m/m in September, weaker than expectations of -0.1% m/m, while manufacturing production fell -0.4% m/m, weaker than expectations of -0.1% m/m. Finally, the number of Americans filing for initial jobless claims in the past week fell by -19K to 241K, in line with expectations.

“Retail sales came in well above expectations and continue to defy the weak economy thesis,” said Quincy Krosby at LPL Financial. “The implications for monetary policy center on whether the Fed worries that the renewed strength in the economy fuels an uptick in inflation, although expectations remain that there will be a 25 basis-point cut at the next meeting.”

Meanwhile, U.S. rate futures have priced in a 90.7% chance of a 25 basis point rate cut and a 9.3% chance of no rate change at November’s monetary policy meeting.

On the earnings front, notable companies like Procter & Gamble (PG), American Express (AXP), Schlumberger (SLB), Regions Financial (RF), and Ally Financial (ALLY) are set to report their quarterly figures today.

On the economic data front, investors will focus on the U.S. Building Permits (preliminary) and Housing Starts data. Economists forecast September Building Permits to be 1.450M and September Housing Starts to be 1.350M, compared to the previous numbers of 1.470M and 1.356M, respectively.

In addition, market participants will be anticipating speeches from Atlanta Fed President Raphael Bostic, Fed Governor Christopher Waller, and Minneapolis Fed President Neel Kashkari.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.106%, up +0.20%.

The Euro Stoxx 50 futures are up +0.48% this morning as investors digested the European Central Bank’s interest rate cut as well as economic news from China. Mining and technology stocks led the gains on Friday. Data from the Office for National Statistics showed on Friday that Britain’s monthly retail sales unexpectedly rose in September, buoyed by a 35% surge in spending on computers & telecommunications. Meanwhile, the ECB lowered the deposit facility rate by 25 basis points to 3.25% on Thursday, as widely anticipated, and although President Christine Lagarde refrained from providing hints on future moves, Reuters reported that a fourth reduction in December is probable unless key data turns around in the coming weeks. ECB Governing Council member Francois Villeroy de Galhau said on Friday that the risk of Eurozone inflation falling below the central bank’s target is now equal to the risk of exceeding it. In corporate news, Elisa Oyj (ELISA.H.DX) slumped over -6% after the company reported weaker-than-expected Q3 revenue.

U.K.’s Retail Sales and U.K.’s Core Retail Sales data were released today.

U.K. September Retail Sales arrived at +0.3% m/m and +3.9% y/y, stronger than expectations of -0.3% m/m and +3.2% y/y.

U.K. September Core Retail Sales stood at +0.3% m/m and +4.0% y/y, stronger than expectations of -0.3% m/m and +3.2% y/y.

Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +2.91%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.18%.

China’s Shanghai Composite Index closed sharply higher today as investors digested better-than-expected economic data and details of a stock buyback program from the country’s central bank. Semiconductor and securities stocks led the gains on Friday. Official data released on Friday showed that China’s economy grew more than expected in the third quarter but at the slowest rate since the first quarter of 2023. The country also posted better-than-expected figures for retail sales, industrial production, and fixed asset investment, while new home prices saw their largest decline since 2015. Meanwhile, the People’s Bank of China announced Friday that it kicked off a re-lending mechanism with an initial quota of 300 billion yuan ($42.1 billion) for bank loans used in share buybacks. China’s central bank also announced the launch of a swap facility that enables institutional investors to access liquidity from the central bank for stock purchases. According to a separate statement, the program has garnered applications exceeding 200 billion yuan. In addition, the PBOC said that it might reduce banks’ reserve requirements by year-end depending on liquidity conditions. In corporate news, Shenzhen Megmeet Electrical jumped +10% after announcing that it will supply power components to Nvidia.

The Chinese GDP has been reported at +0.9% q/q and +4.6% y/y in the third quarter, compared to expectations of +1.0% q/q and +4.5% y/y.

The Chinese September Industrial Production stood at +5.4% y/y, stronger than expectations of +4.6% y/y.

The Chinese September Retail Sales came in at +3.2% y/y, stronger than expectations of +2.5% y/y.

The Chinese Fixed Asset Investment arrived at +3.4% y/y in the January-September period, stronger than expectations of +3.3% y/y.

The Chinese September Unemployment Rate was at 5.1%, stronger than expectations of 5.3%.

Japan’s Nikkei 225 Stock Index closed slightly higher today, snapping a two-day losing streak. However, the benchmark index ended the week lower. Healthcare stocks outperformed on Friday, while utility and energy stocks slumped. Government data showed Friday that Japan’s core inflation slowed to a five-month low in September due to the rollout of energy subsidies, snapping four straight months of accelerating price growth and possibly giving the Bank of Japan more time to think about the timing of its next move. Meanwhile, the yen edged higher against the greenback after weakening beyond 150 per dollar in the previous session following the release of stronger-than-expected U.S. retail sales data. Japan’s top currency official, Atsushi Mimura, warned Friday that recent yen movements past 150 per dollar were “somewhat one-sided and rapid,” indicating worries about speculative trading. He noted that authorities are monitoring currency moves with urgency. In other news, Japan’s largest labor union group announced on Friday that it would seek wage increases of at least 5% in 2025. In corporate news, Vario Secure dropped about -1% after it reported a 4.1% year-over-year decline in its profit to 182 million yen for the six months ending August 31st. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -0.45% to 26.43.

The Japanese September National Core CPI stood at +2.4% y/y, stronger than expectations of +2.3% y/y.

Pre-Market U.S. Stock Movers

Netflix (NFLX) climbed over +5% in pre-market trading after the streaming giant topped Wall Street’s expectations across all key metrics in its Q3 earnings report and provided solid Q4 guidance.

Intuitive Surgical (ISRG) gained more than +6% in pre-market trading after the company posted better-than-expected Q3 results and raised its FY24 procedure growth forecast.

Datadog (DDOG) rose over +3% in pre-market trading after UBS upgraded the stock to Buy from Neutral with a price target of $150.

Western Alliance (WAL) slid more than -5% in pre-market trading after the regional lender reported weaker-than-expected Q3 EPS and said it expects its net interest income to fall sequentially in Q4.

Boston Scientific (BSX) fell over -1% in pre-market trading after Needham downgraded the stock to Hold from Buy.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - October 18th

P&G (PG), American Express (AXP), Schlumberger (SLB), Fifth Third (FITB), Regions Financial (RF), Ally Financial Inc (ALLY), Comerica (CMA), Autoliv (ALV), Simmons First National (SFNC), Acme United (ACU).

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