December Nasdaq 100 E-Mini futures (NQZ24) are trending up +0.09% this morning as investors shifted their focus to a highly anticipated earnings report from AI darling Nvidia.
In yesterday’s trading session, Wall Street’s main stock indexes closed mixed. Super Micro Computer (SMCI) soared over +31% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after the server maker appointed an independent auditor and submitted a compliance plan to Nasdaq. Also, Nvidia (NVDA) climbed more than +4% and was the top percentage gainer on the Dow after Stifel and Truist raised their price targets on the stock. In addition, Walmart (WMT) rose +3% after the retail giant posted better-than-expected Q3 results and raised its full-year guidance. On the bearish side, Incyte Corp. (INCY) slumped over -8% and was the top percentage loser on the S&P 500 after halting enrollment in a Phase 2 trial of its chronic spontaneous urticaria candidate targeting MRGPRX2 due to findings from preclinical toxicology.
Economic data released on Tuesday showed that U.S. housing starts fell -3.1% m/m to 1.311M in October, weaker than expectations of 1.340M. Also, U.S. October building permits, a proxy for future construction, unexpectedly fell -0.6% m/m to 1.416M, weaker than expectations of 1.440M.
Kansas City Fed President Jeffrey Schmid said on Tuesday that it remains uncertain how far interest rates can fall, although the initial cuts by the Fed are a sign of confidence that inflation is moving back to its 2% target. “The decision to lower rates is an acknowledgment of the ... growing confidence that inflation is on a path to reach the Fed’s 2% objective - a confidence based in part on signs that both labor and product markets have come into better balance in recent months,” Schmid said.
Meanwhile, U.S. rate futures have priced in a 59.1% probability of a 25 basis point rate cut and a 40.9% chance of no rate change at the December FOMC meeting.
Market participants are awaiting Nvidia’s third-quarter earnings report, scheduled for release after the market close, to gauge future demand for its new Blackwell AI chips, particularly after The Information reported on Sunday that these chips were experiencing overheating issues when connected to server racks designed to hold up to 72 chips.
“After an exhausting election cycle, options show that NVDA results will be the most important catalyst left for the remainder of the year, notable, more so than NFP, CPI, and FOMC,” Stefano Pascale, equity derivatives strategist at Barclays, said in a note Tuesday.
Prominent companies like TJX (TJX), Palo Alto Networks (PANW), Target (TGT), and Snowflake (SNOW) are also set to report their quarterly figures today.
On the economic data front, investors will likely focus on U.S. Crude Oil Inventories data due later in the day. Economists estimate this figure to be -0.1M, compared to last week’s value of 2.1M.
In addition, investors will be looking toward speeches from Fed Governors Lisa Cook and Michelle Bowman.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.417%, up +0.87%.
The Euro Stoxx 50 futures are up +0.42% this morning, partially rebounding from losses in the previous session as investors considered the geopolitical situation and looked ahead to Nvidia’s quarterly results. Construction and bank stocks outperformed on Wednesday. The Office for National Statistics reported on Wednesday that the U.K.’s annual inflation rate rose above the Bank of England’s target in October, suggesting that BoE interest rates are likely to remain higher for longer. Meanwhile, the European Central Bank cautioned on Wednesday in its semi-annual report that the potential for higher trade tariffs heightens the risk of rare but severe shocks to the global economy and poses a threat to financial system stability. In other news, a day after Russia lowered its threshold for a nuclear strike, Reuters reported that Russian President Vladimir Putin is open to discussing a Ukraine ceasefire deal with U.S. President-elect Donald Trump, easing geopolitical concerns. In corporate news, Sage Group Plc (SGE.LN) soared over +18% after reporting stronger-than-expected full-year operating profit.
U.K.’s CPI, U.K.’s Core CPI, and Germany’s PPI data were released today.
U.K. October CPI arrived at +2.3% y/y, stronger than expectations of +2.2% y/y.
U.K. October Core CPI came in at +3.3% y/y, stronger than expectations of +3.1% y/y.
The German October PPI has been reported at +0.2% m/m and -1.1% y/y, compared to expectations of -0.1% m/m and -1.1% y/y.
Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.66%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.16%.
China’s Shanghai Composite Index closed higher today. Software and pharmaceutical stocks led the gains on Wednesday. China kept its benchmark lending rates unchanged at the monthly fixing on Wednesday, a move widely anticipated after a significant reduction in borrowing costs last month. Major Chinese banks maintained the one-year loan prime rate at 3.1% and the five-year LPR at 3.6%, according to a statement from the People’s Bank of China. Meanwhile, at an investment summit in Hong Kong on Tuesday, senior Chinese officials reaffirmed their commitment to progressing capital market reforms and further opening the financial sector to foreign investment. In other news, Chinese mutual fund houses announced on Tuesday a reduction in fees for their exchange-traded fund products, responding to authorities’ call to support the nation’s stock market. In corporate news, Beijing Kingsoft Office Software gained over +3% after its Hong Kong unit secured an advertising contract worth $7 million with Xiaomi’s Singapore arm. Investors now look ahead to China’s annual Central Economic Work Conference in December for potential additional stimulus measures to boost the economy.
Japan’s Nikkei 225 Stock Index closed slightly lower today as caution prevailed ahead of Nvidia’s earnings report. Automobile and insurance stocks led the declines on Wednesday. Data from the Ministry of Finance released on Wednesday showed that Japan’s exports rebounded more strongly than anticipated in October, driven by increased demand for chip equipment in China, although concerns persist about uncertainties in the global economy and U.S. trade policy. Also, data showed that Japan’s imports unexpectedly rose to a 3-month high in October. Meanwhile, investors are awaiting Japanese inflation data, set to be released on Friday, which is expected to provide further insight into the monetary policy outlook. In corporate news, Tokyo Gas soared nearly +13% after activist investor Elliott Investment Management disclosed in a regulatory filing that it had taken a 5.03% stake in the company. Also, Seven & I Holdings climbed more than +6% after Japanese broadcaster NHK reported that the founding family of the retail giant plans to finalize a deal to take the company private by the end of its fiscal year in February. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -4.99% to 23.42.
The Japanese October Trade Balance has been reported at -461.2B yen, weaker than expectations of -360.4B yen.
The Japanese October Exports stood at +3.1% y/y, stronger than expectations of +2.2% y/y.
The Japanese October Imports came in at +0.4% y/y, stronger than expectations of -0.3% y/y.
Pre-Market U.S. Stock Movers
Target (TGT) tumbled more than -18% in pre-market trading after the company posted downbeat Q3 results and cut its full-year adjusted EPS guidance.
Keysight Technologies (KEYS) climbed over +9% in pre-market trading after the company reported better-than-expected FQ4 results and provided above-consensus FQ1 guidance.
Sangamo Therapeutics (SGMO) surged more than +12% in pre-market trading after announcing that the FDA had cleared the commencement of clinical trials for its drug candidate ST-503 in the treatment of intractable pain resulting from idiopathic small fiber neuropathy.
Powell Industries (POWL) plunged more than -15% in pre-market trading after reporting weaker-than-expected FQ4 revenue.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Wednesday - November 20th
Nvidia (NVDA), TJX (TJX), Palo Alto Networks (PANW), Target (TGT), Snowflake (SNOW), Williams-Sonoma (WSM), Wix.Com Ltd (WIX), GlobalE Online (GLBE), Maximus (MMS), Copa (CPA), Spire (SR), ZIM Integrated Shipping Services (ZIM), Corporacion America Airports (CAAP), Kindercare Learning (KLC), Jack In The Box (JACK), Yirendai Ltd (YRD), Canaan (CAN), Nano Dimension (NNDM), Waldencast Acquisition (WALD), Jiayin (JFIN), Euroseas (ESEA), Intchains ADR (ICG).
