Morning Markets
December E-Mini S&P 500 futures (ESZ23) are up +0.23%, and the Dec Nasdaq 100 E-Mini futures (NQZ23) are up +0.63%.
Stock index futures this morning are trading higher after positive earnings news from Amazon.com late Thursday boosted tech stocks. The positive Amazon.com news followed the sharp drop in tech stocks on Wednesday and Thursday after negative earnings news from Meta Platforms (META) and Alphabet (GOOGL). Stocks were also boosted by positive overnight news from Intel (INTC).
Crude oil prices are up +1.80% today, and the stock market was undercut by Middle East tensions after U.S. Defense Secretary Lloyd Austin said President Biden ordered “precision self-defense strikes” against two facilities in eastern Syrian that were used by Iran’s Islamic Revolutionary Guard Corps and affiliated groups. The U.S. strikes were in response to attacks against U.S. personnel in Iraq and Syria since October 17. The market’s biggest fear is the possibility that the Israel-Hamas war could turn into a hot war between the U.S. and Iran.
Also, Israeli troops overnight conducted their second limited ground incursion into Gaza before withdrawing. The markets are waiting for Israel’s all-out ground invasion, which could spark an expansion of the war to include Hezbollah in Lebanon and possibly other Iranian-backed groups.
Today’s U.S. PCE deflator report, which is the Fed’s preferred inflation measure, was mostly in line with market expectations and had little impact on expectations for Fed policy. The Sep PCE deflator report of +0.4% m/m was slightly higher than expectations of +0.3%, but the year-on-year figure of +3.4% was in line with market expectations. The Sep core PCE deflator report of +0.3% m/m and +3.7% y/y was in line with market expectations.
The U.S. Sep personal income report of +0.3% m/m was slightly weaker than expectations of +0.4%, but the Sep personal spending report of +0.7% m/m was stronger than expectations of +0.5%.
The markets are discounting a 2% chance that the FOMC will raise the funds rate by +25 bp at next week’s FOMC meeting (Oct 31-Nov 1), an 18% chance for that +25 bp rate hike at the following meeting on Dec 12-13, and a 12% chance for that +25 bp rate hike at the FOMC meeting after that 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 bond yields are mixed. The 10-year T-note yield is up +1.1 bp at 4.856%. The 10-year German bund yield is down -0.3 bp at 2.835%. The 10-year UK gilt yield is down -4.6 bp at 4.552%.
Overseas stock markets are mixed. The Euro Stoxx 50 is down -0.44%. China’s Shanghai Composite Index today closed up +0.99%. Japan’s Nikkei 225 today closed up +1.27%.
Pre-Market U.S. Stock Movers
Amazon.com (AMZN) is up +5.3% in pre-market trading after positive earnings and revenue news and positive news about its cloud prospects.
Intel (INTC) is up +7.1% after positive management guidance for Q4 revenue and earnings.
Chevron (CVX) is down -2.1% in pre-market trading after missing its earnings consensus.
Exxon (XOM) is up +0.5% in pre-market trading after a boost in its dividend and higher cash flow offset an earnings miss.
Ford (F) is down -3.7% in pre-market trading after an earnings miss. Ford also withdrew its 2024 guidance for 2023 due to the effects of the UAW strike and as it waits for ratification of the tentative agreement with the UAW that it announced late Wednesday.
Rivian (RIVN) is up +2.8% in pre-market trading after Cantor Fitzgerald raised its recommendation on the stock to overweight from neutral and said it expects strong EV demand to continue into 2024.
T. Rowe Price Group (TROW) is up +1.3% in pre-market trading after an earnings beat.
Earnings Reports (10/27/2023)
Exxon Mobil (XOM), Chevron (CVX), AbbVie (ABBV), Charter Communications (CHTR), Aon (AON), Colgate-Palmolive (CL), Phillips 66 (PSX), Natwest Group (NWG), Fomento Economico Mexicano (FMX), Xcel Energy (XEL), Imperial Oil (IMO), LyondellBasell Industries (LYB), T Rowe (TROW), Fortis Inc (FTS), Booz Allen Hamilton (BAH), AerCap Holdings NV (AER), Avantor (AVTR), Stanley Black Decker (SWK), Saia (SAIA), Lincoln Electrics (LECO), nVent Electric (NVT), Gentex (GNTX), AutoNation (AN), Portland General Electric (POR), Balchem (BCPC), PNM Resources (PNM), Newell Brands (NWL), Alliance Resource (ARLP), Arbor (ABR), Carter’s (CRI), First Hawaiian (FHB), ArcBest Corp (ARCB), Piper Sandler (PIPR), Dana (DAN), Barnes (B), Virtus (VRTS), WisdomTree (WT), Standard Motor Products (SMP), Oil States (OIS), Civeo (CVEO), Civista Bancshares (CIVB).
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.
