December S&P 500 E-Mini futures (ESZ24) are down -0.02%, and December Nasdaq 100 E-Mini futures (NQZ24) are down -0.10% this morning as market participants awaited the outcome of one of the most closely contested elections in U.S. history, a fresh batch of corporate earnings reports, and the Federal Reserve’s policy meeting later in the week.
In Friday’s trading session, Wall Street’s major averages closed in the green. Amazon.com (AMZN) gained over +6% after the e-commerce and cloud giant reported stronger-than-expected Q3 results and provided solid guidance for the holiday quarter. Also, Intel (INTC) climbed more than +7% and was the top percentage gainer on the Dow after the semiconductor giant reported better-than-expected Q3 revenue and gave an upbeat Q4 revenue forecast. In addition, Atlassian (TEAM) surged about +19% and was the top percentage gainer on the Nasdaq 100 after the software firm posted better-than-expected FQ1 results and issued above-consensus FQ2 revenue guidance. On the bearish side, Apple (AAPL) slid more than -1% after the iPhone maker reported weaker-than-anticipated quarterly sales in China and offered a tepid FQ1 sales forecast.
The U.S. Labor Department’s report on Friday showed that nonfarm payrolls increased by a mere 12K in October, weaker than expectations of 106K and the smallest increase in 3-3/4 years. Also, the U.S. October unemployment rate was unchanged at 4.1%, in line with expectations. In addition, U.S. average hourly earnings came in at +0.4% m/m and +4.0% y/y in October, compared to expectations of +0.3% m/m and +4.0% y/y. Finally, the U.S. October ISM manufacturing PMI unexpectedly fell to a 15-month low of 46.5, weaker than expectations of 47.6.
“We’re in the midst of a hectic stretch with economic data, earnings, the Fed, and the US election,” said Bret Kenwell at eToro. “There’s been some additional volatility around these events, but so far nothing has changed the big-picture view. Until that changes, the long-term drivers of the bull market remain intact.”
Meanwhile, the U.S. presidential election that is set to culminate on Tuesday will draw significant attention from market watchers, with the outcome expected to influence the economy’s direction over the next four years. Harris received some positive signs from an ABC News and Ipsos poll that gave her a 49%-46% lead nationally over Trump in the White House race, while the New York Times/Siena survey released Sunday placed the Democratic nominee ahead in five of seven swing states.
Market participants will also be closely watching the U.S. Federal Reserve’s interest rate decision and Fed Chair Jerome Powell’s post-policy meeting press conference this week. Fed officials are expected to lower interest rates by a quarter percentage point on Thursday as inflation continues to move closer to their 2% target. Investor attention will likely center on Powell’s press conference, where he is anticipated to offer guidance on the Fed’s trajectory for interest rate cuts in the upcoming quarters.
Third-quarter earnings season continues, and investors await new reports from notable companies this week, including Qualcomm (QCOM), Palantir (PLTR), Arm Holdings (ARM), Gilead Sciences (GILD), Marriott International (MAR), NXP Semiconductors (NXPI), Take-Two Interactive (TTWO), CVS Health (CVS), Arista Networks (ANET), Yum! Brands (YUM), Airbnb (ABNB), Warner Bros. Discovery (WBD), and Duke Energy (DUK). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +4.3% increase in quarterly earnings for Q3 compared to the previous year, down from +7.9% growth projected in mid-July.
In addition, investors will monitor a spate of economic data releases this week, including the U.S. S&P Global Composite PMI, the S&P Global Services PMI, the ISM Non-Manufacturing PMI, Trade Balance, Exports, Imports, Crude Oil Inventories, Initial Jobless Claims, Nonfarm Productivity (preliminary), Unit Labor Costs (preliminary), Wholesale Inventories, Consumer Credit, and the University of Michigan’s Consumer Sentiment Index (preliminary).
Today, investors will focus on U.S. Factory Orders data, which is set to be released in a couple of hours. Economists, on average, forecast that September Factory Orders will stand at -0.4% m/m, compared to the previous figure of -0.2% m/m.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.303%, down -1.38%.
The Euro Stoxx 50 futures are up +0.31% this morning, with investors looking forward to the U.S. presidential election. Mining and energy stocks outperformed on Monday, while technology stocks retreated. A survey released on Monday showed that the Eurozone manufacturing downturn moderated slightly in October, even as new factory orders and production volumes continued to decline. Meanwhile, market participants will also keep an eye on corporate earnings, crucial economic data, and an interest rate decision from the Bank of England this week. Economists anticipate the BoE will reduce its benchmark rate by a quarter point to 4.75%. The Riksbank and the Norges Bank also have policy meetings scheduled this week. In corporate news, STMicroelectronics NV (STMPA.P.DX) fell about -0.5% after Morgan Stanley downgraded the stock to Underweight from Equal Weight. At the same time, Burberry Group Plc (BRBY.LN) gained more than +3% after a media report over the weekend suggested that Italy’s Moncler might be contemplating a bid for the luxury firm.
Spain’s Manufacturing PMI, Italy’s Manufacturing PMI, France’s Manufacturing PMI, Germany’s Manufacturing PMI, Eurozone’s Manufacturing PMI, and Eurozone’s Sentix Investor Confidence Index were released today.
The Spanish October Manufacturing PMI stood at 54.5, stronger than expectations of 53.1.
The Italian October Manufacturing PMI came in at 46.9, weaker than expectations of 48.8.
The French October Manufacturing PMI arrived at 44.5, in line with expectations.
The German October Manufacturing PMI stood at 43.0, stronger than expectations of 42.6.
Eurozone October Manufacturing PMI has been reported at 46.0, stronger than expectations of 45.9.
Eurozone November Sentix Investor Confidence Index arrived at -12.8, weaker than expectations of -12.7.
China’s Shanghai Composite Index (SHCOMP) closed up +1.17%, while Japanese markets were closed for a holiday.
China’s Shanghai Composite Index closed higher today, recouping some of last week’s losses on expectations of additional stimulus amid the start of a major policy meeting in the country. Automobile stocks led the gains on Monday following robust October sales numbers. Broker stocks also gained ground. The country’s Standing Committee of the National People’s Congress convenes in Beijing from Monday to Friday, with investors on the lookout for any approval of fiscal stimulus to rejuvenate the slowing economy. Reuters reported last week that authorities were considering the approval of 10 trillion yuan ($1.4 trillion) in additional borrowing over the coming years. Meanwhile, investors remain cautious ahead of the U.S. presidential election. Chinese officials unveiled late Friday measures to attract foreign investment just days before U.S. elections that have sparked concerns about the impact on the world’s second-largest economy from a potential Donald Trump return to the White House. Foreign individuals are now permitted to provide capital for publicly traded companies as strategic investors, the China Securities Regulatory Commission, the Commerce Ministry, and four other regulators said in a statement. In corporate news, BYD gained over +3% in Hong Kong after China’s biggest EV maker reported record monthly sales for October.
Japan’s Nikkei 225 Stock Index was closed for the Culture Day holiday today. The markets will reopen on Tuesday.
Pre-Market U.S. Stock Movers
Nvidia (NVDA) rose over +2% in pre-market trading after S&P Dow Jones Indices announced on Friday that the company would replace Intel in the Dow Jones Industrial Average, effective November 8th.
Apple (AAPL) fell about -0.7% in pre-market trading after Warren Buffett’s Berkshire Hathaway reduced its holdings in the iPhone maker by around 25% in Q3.
Keysight Technologies (KEYS) gained more than +1% in pre-market trading after Barclays upgraded the stock to Overweight from Equal Weight with a price target of $180.
Roblox (RBLX) climbed over +4% in pre-market trading after Morgan Stanley upgraded the stock to Overweight from Equal Weight with a price target of $65.
Talen Energy (TLN) plunged more than -13% in pre-market trading after the Federal Energy Regulatory Commission rejected an amended interconnection service agreement in Pennsylvania for an Amazon data center with a nuclear power plant operated by the company.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Monday - November 4th
Vertex (VRTX), Palantir (PLTR), Zoetis (ZTS), Marriott (MAR), NXP (NXPI), Itau Unibanco (ITUB), Diamondback (FANG), Realty Income (O), AIG (AIG), Fidelity National Info (FIS), Public Service Enterprise (PEG), Sun Life Financial (SLF), AvalonBay (AVB), Illumina (ILMN), Eversource Energy (ES), Hologic (HOLX), Corebridge Financial (CRBG), Fox (FOX), Revvity (RVTY), Aspen (AZPN), Axa Equitable (EQH), Celanese (CE), Astera Labs (ALAB), BWX Tech (BWXT), Franklin Resources (BEN), Wynn Resorts (WYNN), Essential Utilities (WTRG), Viper Energy Ut (VNOM), NewYork Times (NYT), Brookfield Asset Management Reinsurance Partners (BNT), Fabrinet (FN), Vornado (VNO), Voya Financial Inc (VOYA), Bright Horizons (BFAM), Glaukos Corp (GKOS), Lattice (LSCC), GXO Logistics (GXO), Choice Hotels (CHH), Freshpet Inc (FRPT), Ryman Hospitality Properties (RHP), Cleveland-Cliffs (CLF), MGIC Investment (MTG), Cabot Corp (CBT), Cirrus (CRUS), Affiliated Managers (AMG), Inspire Medical Systems (INSP), Boise Cascad Llc (BCC), Sensata Tech (ST), Krystal Biotech (KRYS), Hims Hers Health (HIMS), One Gas Inc (OGS), Sanmina (SANM), TG (TGTX), Intapp (INTA), Howard Hughes Holdings (HHH), Huntsman (HUN), Douglas Emmett (DEI), Silicon Labs (SLAB), Primoris (PRIM), Otter Tail (OTTR), Teradata (TDC), Black Stone Minerals (BSM), Baldwin Insurance (BWIN), Cushman & Wakefield (CWK), Marqeta (MQ), Crescent Energy (CRGY), Goodyear Tire & Rubber Co (GT), Palomar (PLMR), Addus (ADUS), V2X Inc (VVX), Supernus (SUPN), Kosmos Energy (KOS), Altice USA (ATUS), Century Aluminum (CENX), Highpeak Energy Acquisition (HPK), The Andersons (ANDE), Bowlero (BOWL), Horace Mann Educators (HMN), Integra (IART), Elme (ELME), Jeld-Wen Holding (JELD), Caredx Inc (CDNA), Netstreit (NTST), Enfusion (ENFN), QuinStreet (QNST), TriMas (TRS), Armada Hflr Pr (AHH), Triumph (TGI), Franklin BSP Realty Trust (FBRT), Owens&Minor (OMI), Alpha & Omega Semiconductor (AOSL), Forward Air (FWRD), Aris Water Solutions (ARIS), Ichor Holdings (ICHR), Castle Biosciences (CSTL), Par Pacific Holdings (PARR).
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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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