Morning Markets
December E-Mini S&P 500 futures (ESZ23) are up +0.24%, and Dec Nasdaq 100 E-Mini futures (NQZ23) are up +0.06%.
Stock index futures this morning are moving higher on some positive corporate news. Gains are limited by higher bond yields. Weekly jobless claims came in near expectations and had little market impact. The markets are awaiting comments from Fed Chair Powell later this morning at the IMF’s annual research conference that could determine market direction.
On the positive side, Walt Disney is up more than +3% in pre-market trading after reporting a larger than-expected number of Q4 Disney+ subscribers. Also, Affirm Holdings is up more than +13% after reporting Q1 revenue above consensus and forecasting Q2 revenue above estimates. AppLovin and Wix.com are up more than +5% after reporting stronger-than-expected Q3 revenue.
On the negative side, Veeva Systems is down more than -7% after cutting its full-year revenue forecast. Also, Arm Holdings is down more than -6% after forecasting Q3 total revenue below consensus. FleetCor Technologies is down more than -2% after reporting weaker-than-expected Q3 revenue and cutting its full-year revenue forecast.
U.S. weekly initial unemployment claims unexpectedly fell -3,000 to 217,000, close to expectations of 218,000. However, weekly continuing claims rose +22,000 to a 6-1/2 month high of 1.834 million, showing a weaker labor market than expectations of 1.820 million.
Bitcoin (^BTCUSD) is up more than +4% to a 1-1/2 year high on optimism the Securities and Exchange Commission (SEC) will soon approve a spot Bitcoin ETF. Bloomberg Intelligence predicts there’s a 90% chance the SEC will approve a spot Bitcoin ETF by January 10.
The markets are discounting a 10% chance for a +25 bp rate hike at the next FOMC meeting on Dec 12-13 FOMC and a 20% chance for that +25 bp rate hike at the following FOMC meeting on Jan 30-31, 2024. The markets are then expecting the FOMC to begin cutting rates later in 2024 in response to an expected slowdown in the U.S. economy.
U.S. and European government bond yields today are moving higher. The 10-year T-note yield is up +5.3 bp at 4.545%. The 10-year German bund yield is up +3.4 bp at 2.651%. The 10-year UK gilt yield is up +2.0 bp at 4.260%.
Overseas stock markets are higher. The Euro Stoxx 50 is up +0.95%. China’s Shanghai Composite Index closed up +0.03%. Japan’s Nikkei Stock Index closed up +1.49%.
The Euro Stoxx 50 today rallied to a 4-week high and is moderately higher. Better-than-expected corporate news is positive for stocks, with Adyen NV soaring more than +30% after unveiling new growth targets and a detailed path to achieve them. Also, German chemical makers rallied after a report from Handelsblatt said the German government agreed on an electricity price support package for the industry.
ECB Governing Council member Villeroy de Galhau said the inflation rate in the Eurozone has fallen threefold in a year and, despite some volatility, the trend is "clearly downward," so the ECB is done with interest rate increases unless it has to deal with additional shocks.
ECB Vice President Guindos said talks of interest rate cuts by the ECB in the coming months are "clearly premature," citing risks to the inflation outlook.
China’s Shanghai Composite today settled little changed. Concerns about deflation sparked economic growth concerns and limited gains in stocks after Chinese consumer prices in October fell below zero, and producer prices contracted further. However, the weakness in consumer and producer prices has also bolstered speculation the Chinese government will boost policy support to revive growth.
China Oct CPI fell -0.2% y/y, weaker than expectations of -0.1% y/y. China Oct PPI fell -2.6% y/y, a smaller decline than expectations of -2.9% y/y.
Japan’s Nikkei Stock Index today posted moderate gains. A decline in government bond yields boosted stocks after the 10-year JGB bond yield fell to a 3-week low of 0.833%. Bond yields fell on comments from BOJ Governor Ueda, who said the BOJ won't rush to normalize monetary policy. The lower bond yields weighed on the yen, which fell to a 1-week low against the dollar, sparking a rally in Japanese exporter stocks.
BOJ Governor Ueda said the BOJ won't rush to normalize monetary policy, saying that lower-than-desired inflation would be harder to deal with given the current situation in Japan.
The Japan Oct eco watchers outlook survey fell -1.1 to a 10-month low of 48.4, weaker than expectations of no change at 49.5.
Pre-Market U.S. Stock Movers
Affirm Holdings (AFRM) jumped more than +13% in pre-market trading after reporting Q1 revenue of $497 million, well above the consensus of $445.6 million, and forecasting Q2 revenue of $495 million-$520 million, the midpoint higher than the consensus of $505.9 million.
Walt Disney (DIS) climbed more than +3% in pre-market trading after reporting 150.2 million Q4 Disney+ subscribers, above the consensus of 147.07 million.
AppLovin (APP) surged more than +15% in pre-market trading after reporting Q3 revenue of $864.3 million, well above the consensus of $796.2 million.
Duolingo Inc (DUOL) jumped more than +8% in pre-market trading after reporting Q3 revenue of $137.6 million, better than the consensus of $131.5 million, and raising its full-year revenue forecast to $525 million-$528 million from a previous forecast of $510 million-$516 million.
Twilio (TWLO) rose more than +4% in pre-market trading after reporting Q3 revenue of $1.03 billion, above the consensus of $988.4 million.
Wix.com (WIX) climbed more than +5% in pre-market trading after reporting Q3 revenue of $393.8 million, better than the consensus of $389.7 million, and forecasting Q4 revenue of $400 million-$405 million, above the consensus of $399.3 million.
Take-Two Interactive Software (TTWO) rose more than +1% in pre-market trading after reporting Q2 net bookings of $1.44 billion, stronger than the consensus of $1.33 billion.
Cryptocurrency-related stocks rallied in pre-market trading, with the price of Bitcoin up more than +4% at a 1-1/2 year high. As a result, Marathon Digital (MARA) and Riot Platforms (RIOT) are up more than +4%, and Coinbase Global (COIN) and MicroStrategy (MSTR) are up more than +3%.
Arm Holdings (ARM) tumbled more than -6% in pre-market trading after forecasting Q3 total revenue of $720 million-$800 million, the midpoint below the consensus of $773 million.
Amylyx Pharmaceuticals (AMLX) sank more than -10% in pre-market trading after reporting Q3 EPS of 31 cents, well below the consensus of 44 cents.
Becton Dickinson & Co (BDX) dropped more than -2% in pre-market trading after reporting Q4 adjusted EPS of $3.42, below the consensus of $3.43, and forecasting 2024 adjusted EPS of $12.70-$13.00, weaker than the consensus of $13.53.
Veeva Systems (VEEV) tumbled more than -7% in pre-market trading after cutting its full-year revenue forecast to $2.35 billion-$2.36 billion from a prior forecast of $2.37 billion.
Bill Holdings (BILL) dropped more than -8% in pre-market trading after Bloomberg News reported the company is in advanced talks to acquire Melio Payments for $1.95 billion.
Cardlytics (CDLX) plunged more than -30% in pre-market trading after reporting Q3 revenue of $79 million, weaker than the consensus of $80 million, and forecasting Q4 revenue of $82 million-$90 million, well below the consensus of $98.6 million.
Tesla (TSLA) slid more than -1% in pre-market trading after HSBC initiated coverage on the stock with a recommendation of reduce, with a price target of $146.
FleetCor Technologies (FLT) dropped more than -2% in pre-market trading after reporting Q3 revenue of $970.9 million, below the consensus of $979.1 million, and cut its full-year revenue forecast to $3.77 billion-$3.80 billion from a previous forecast of $3.84 billion-$3.86 billion, weaker than the consensus of $3.81 billion.
Earnings Reports (11/9/2023)
Becton Dickinson & Co (BDX), Hologic Inc (HOLX), Illumina Inc (ILMN), Mettler-Toledo International Inc (MTD), News Corp (NWSA), Tapestry Inc (TPR), TransDigm Group Inc (TDG), Westrock Co (WRK), Wynn Resorts Ltd (WYNN).
On the date of publication, Rich Asplund 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.
