December S&P 500 E-Mini futures (ESZ24) are up +0.21%, and December Nasdaq 100 E-Mini futures (NQZ24) are up +0.27% this morning as investors braced for the closely contested U.S. presidential election, while also awaiting a new round of economic data and corporate earnings reports.
In yesterday’s trading session, Wall Street’s three main equity benchmarks ended lower. Constellation Energy (CEG) plunged over -12% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the Federal Energy Regulatory Commission rejected the proposal that would have increased the amount of power supplied to an Amazon.com data center. Also, megacap technology stocks lost ground, with Alphabet (GOOGL) and Meta Platforms (META) sliding more than -1%. In addition, Marriott International (MAR) fell over -1% after the hotel operator cut its full-year adjusted EPS guidance. On the bullish side, Fox Corp. (FOXA) gained more than +2% after the company posted better-than-expected FQ1 results.
Economic data released on Monday showed that U.S. factory orders fell -0.5% m/m in September, weaker than expectations of -0.4% m/m.
Meanwhile, market participants are focusing on the U.S. presidential election. Millions of Americans are beginning to head to the polls to elect their next president following one of modern history’s most tumultuous and dramatic presidential campaigns. With polls indicating a photo-finish outcome, the possibility of a disputed result could extend the vote count for days or even weeks, potentially leading to increased volatility.
Investors are also keenly awaiting the Federal Reserve’s interest rate decision and Jerome Powell’s press conference on Thursday, where he is anticipated to offer guidance on the Fed’s trajectory for interest rate cuts in the upcoming quarters.
“Of course, the U.S. election will play a prominent role in moving financial markets around this week. However, a Federal Reserve policy decision [on Thursday], some light economic releases throughout the week, and roughly 20% of the S&P 500 scheduled to report third-quarter results should also have their fair share of sway on directing stock traffic,” said Anthony Saglimbene at Ameriprise.
Third-quarter earnings season continues in full flow, with investors awaiting fresh reports from notable companies today, including Apollo Global Management (APO), Emerson (EMR), Marathon Petroleum (MPC), Microchip (MCHP), Yum! Brands (YUM), and DuPont De Nemours (DD). 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.
On the economic data front, all eyes are focused on the U.S. ISM Non-Manufacturing PMI, which is set to be released in a couple of hours. Economists, on average, forecast that the October ISM Non-Manufacturing PMI will come in at 53.8, compared to September’s figure of 54.9.
Also, investors will focus on the U.S. S&P Global Services PMI, which stood at 55.2 in September. Economists foresee the October figure to be 55.3.
U.S. Trade Balance data will be reported today as well. Economists forecast this figure to stand at -$83.80B in September, compared to the previous figure of -$70.40B.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.308%, down -0.05%.
The Euro Stoxx 50 futures are down -0.04% this morning as cautious sentiment prevailed, with all eyes on the closely contested U.S. presidential election. Energy stocks lost ground on Tuesday, while mining stocks outperformed. Data from the statistics agency Insee revealed on Tuesday that France’s monthly industrial production fell more than expected in September, signaling a grim end to the year for the country’s struggling industry. Meanwhile, market participants are also awaiting Eurozone retail sales data and an interest rate decision from the Bank of England later in the week. Speeches from European Central Bank President Christine Lagarde and ECB Board Member Isabel Schnabel, scheduled for later in the day, will be on investors’ radar as well. In corporate news, Vestas Wind Systems A/S (VWS.C.DX) plunged over -9% after the wind energy company posted weaker-than-expected Q3 earnings and said it expects its full-year EBIT margin before special items to be at the lower end of its forecast.
France’s Industrial Production data was released today.
The French September Industrial Production stood at -0.9% m/m, weaker than expectations of -0.5% m/m.
Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +2.32%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.11%.
China’s Shanghai Composite Index closed sharply higher and hit an almost 1-month high today as investors digested upbeat economic data and comments from the nation’s premier. Software and financial stocks led the gains on Tuesday. Property stocks also gained ground. A private-sector survey released on Tuesday showed that China’s services activity grew at its quickest rate in three months in October, indicating that Beijing’s stimulus efforts are rejuvenating the world’s second-largest economy. Sentiment was also boosted after the official Xinhua News Agency reported that the National People’s Congress Standing Committee reviewed a proposal to transfer some off-balance-sheet debt of local governments to their official accounts, setting the stage for the first mid-year increase in the borrowing limit since 2015. Meanwhile, speaking at the China International Import Expo on Tuesday, Chinese Premier Li Qiang stated that officials have “ample space for fiscal policy and monetary policy,” and reiterated that China would achieve its economic growth target of around 5%. In corporate news, Yum China Holdings rose about +7% in Hong Kong after the fast-food chain operator posted better-than-expected Q3 earnings.
The Chinese October Caixin Services PMI arrived at 52.0, stronger than expectations of 50.5.
Japan’s Nikkei 225 Stock Index closed higher today as trading resumed after a long weekend, with strong corporate earnings results boosting sentiment. Electronics and financial stocks led the gains on Tuesday. Meanwhile, investors focus on the U.S. presidential election and the Federal Reserve’s rate decision. Investors also continued to evaluate the country’s monetary policy outlook after the Bank of Japan kept interest rates unchanged at 0.25% last week and noted diminishing global economic risks that could pave the way for additional rate hikes. In corporate news, Nomura Holdings climbed over +10% after the brokerage reported stronger-than-expected Q2 profit. Also, Sanrio surged more than +12% after the character goods maker raised its full-year operating profit forecast. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +4.30% to 27.15.
Pre-Market U.S. Stock Movers
Palantir Technologies (PLTR) surged over +12% in pre-market trading after the company reported better-than-expected Q3 results and raised its full-year revenue guidance.
Astera Labs (ALAB) soared about +25% in pre-market trading after the company posted upbeat Q3 results and gave a strong Q4 forecast.
Boeing (BA) rose nearly +2% in pre-market trading after workers voted to accept a new labor contract and end a damaging strike that had crippled the company’s production for 53 days.
Cleveland-Cliffs (CLF) slumped over -6% in pre-market trading after reporting weaker-than-expected Q3 results.
NXP Semiconductors N.V. (NXPI) slid more than -4% in pre-market trading after the semiconductor manufacturing and design company provided below-consensus Q4 guidance.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - November 5th
Emerson (EMR), Marathon Petroleum (MPC), Cummins (CMI), Microchip (MCHP), Gartner (IT), Yum! Brands (YUM), Targa Resources (TRGP), DuPont De Nemours (DD), Restaurant Brands Int (QSR), Archer-Daniels-Midland (ADM), Devon Energy (DVN), IFF (IFF), Broadridge (BR), Pembina Pipeline (PBA), Fortis Inc (FTS), Builders FirstSource (BLDR), GlobalFoundries (GFS), Westlake Chemical (WLK), Expeditors Washington (EXPD), Jack Henry&Associates (JKHY), EXACT Sciences (EXAS), Kinross Gold (KGC), Topbuild Corp (BLD), American Financial (AFG), UL Solutions (ULS), Globus Medical (GMED), Assurant (AIZ), Henry Schein (HSIC), Bruker (BRKR), Frontier Communications Parent (FYBR), Ingredion (INGR), OGE Energy (OGE), Colliers International (CIGI), Masimo (MASI), Lumen Technologies (LUMN), Louisiana-Pacific (LPX), TIM Participacoes (TIMB), Novanta (NOVT), Timken (TKR), Stevanato Group SpA (STVN), Noble (NE), Ultragenyx (RARE), California Resources (CRC), Sotera Health (SHC), Qualys (QLYS), Global Business Travel (GBTG), Northern Oil&Gas (NOG), Newmark Group (NMRK), National Health Investors (NHI), Apellis Pharma (APLS), Payoneer Global Inc (PAYO), Consol Energy (CEIX), Rhythm Pharma (RYTM), TransAlta Corp (TAC), Enpro Industries (NPO), Outfront Media (OUT), Melco Resorts & Entertainment (MLCO), Innospec (IOSP), Arch Resources (ARCH), USA Compression Partners LP (USAC), Gulfport Energy Operating (GPOR), LGI Homes (LGIH), Pan American Silver NQ (PAAS), MasterBrand (MBC), Hillman Solutions (HLMN), VSE Corporation (VSEC), Mercury (MRCY), Premier Inc (PINC), Ero Copper (ERO), Beam (BEAM), Sixth Street Specialty Lending (TSLX), Revolve (RVLV), Patria Investments (PAX), NeoGenomics (NEO), Navios Maritime Unit (NMM), Syndax Pharmaceuticals (SNDX), Helios Tech (HLIO), Easterly Government Properties (DEA), Grocery Outlet (GO), Cricut (CRCT), Adapthealth (AHCO), VTEX (VTEX), Select Energy Services (WTTR), US Physicalrapy (USPH), Endeavour Silver (EXK), Bioventus (BVS), Hyster-Yale Materials Handling (HY), Xometry (XMTR), MRC Global (MRC), Bain Capital Specialty Finance (BCSF), Portillo's (PTLO), Bristow Inc (VTOL), Profrac Holding (ACDC), International General Insurance (IGIC), Limbach Holdings (LMB), Carlyle Secured Lending (CGBD).
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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.
