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Five things you need to know before the market opens on Wednesday November 16:
1. -- Stock Futures Slip As Inflation Concerns Resurface
U.S. equity futures edged lower in overnight trading, while the dollar bumped higher against its global peers amid a modest advance in Treasury bond yields as investors debated the impact of solid retail sales data on the broader inflation dynamic in the world's largest economy.
October retail sales, which indicated firm spending gain at both the headline and the core level, suggest the U.S. economy is still powering ahead in the face of the most aggressive Federal Reserve rate hikes in a at least a generation.
In fact, the Atlanta Fed's GDPNow forecasting tool suggests the economy is growing at a 4.4% clip, up from a 4% estimate just a few days ago, as it heads into the the holiday spending season.
That could give the Fed cover to continue raising rates into the start of the new year, particularly given the fact that both consumer spending and job market data remain resilient. San Francisco Fed President Mary Daly said as much yesterday during an interview with CNBC in which she described rate hikes as "tightening into a strong economy" and that pause in hikes was a long way off.
The U.S. dollar index, which tracks the greenback against a basket of its global peers, was marked 0.1% higher in overnight trading at 106.339, while benchmark 2-year Treasury notes yields nudged modestly higher to 4.368%.
Data and forecasts from the corporate world, however, offer an interesting contrast to the bullish growth thesis, with Target TGT warning yesterday of a 'significant shift' in spending habits from inflation-weary customers and Micron Technology unveiling plans to slash its near-term chip production plans amid a slump in global demand and a build-up in inventories.
Target's disappointing third quarter earnings rippled through the retail space yesterday, while Micron's muted outlook echoed through tech stocks in Asia overnight and again in early trading in Europe.
On Wall Street, futures contracts tied to the S&P 500 are priced for a modest 7 point decline at the start of trading, while those linked to the Dow Jones Industrial Average are indicating a 60 point decline. The tech-heavy Nasdaq is priced for a 7 point dip.
2. -- Nvidia Jumps As Data Center Gains Offset Gaming Chip Weakness
Nvidia (NVDA) shares jumped higher in pre-market trading after the chipmaker posted third quarter earnings that showed solid gains in its data center business offsetting an expected slump in gaming sales.
Nvidia said adjusted earnings for the three months ending in October fell 50% from last year to 58 cents per share, well shy of Street forecasts. Revenues, however, were modestly firmer at $5.93 billion, thanks to a 31% gain for data center sales that help soften a 51% decline in gaming revenues.
Looking into the current quarter, Nvidia said it sees revenues of around $6 billion, plus or minus 2%, compared to the Street consensus of $6.09 billion.
Nvidia shares were marked 2.65% higher in pre-market trading to indicate an opening bell price of $163.20 each.
3. -- Cisco Systems Powers Higher On Solid Q3 Earnings, Outlook
Cisco Systems (CSCO) shares powered higher in pre-market trading following a stronger-than-expected first quarter earnings report and a robust near-term outlook for the network equipment maker.
Cisco said adjusted non-GAAP earnings for the three months ending in October, the group's fiscal first quarter, came in at 86 cents per share, topping Street forecasts by 2 cents. Group revenues, Cisco said, rose 6% from last year at $13.6 billion, topping analysts' estimates of a $13.3 billion tally.
Cisco said it sees revenues rising between 4.5 and 6.5% from last year over the current quarter, with adjusted earnings in the range of 84 to 86 cents per share. The group also unveiled plans for a $600 million restructuring plan that could see a headcount reduction of as much as 5%.
Cisco shares were marked 4.82% higher in pre-market trading to indicate an opening bell price of $46.53 each.
4. -- Macy's Earnings In Focus Amid Mixed Retail Updates
Macy's (M) shares moved higher in pre-market trading ahead of the retailer's third quarter earnings prior to the opening bell.
Analysts expect Macy's to post an adjusted bottom line of 19 cents per share, with revenues falling 7.7% from last year to just over $5 billion. Macy's own guidance, published in August, pegged revenues between $5.16 billion and $5.23 billion.
The group said last month it plans to hire more than 40,000 seasonal workers to handle its holiday shopping workflow, a notable decline from the near 80,000 it brought on board last year -- including permanent staff -- suggesting muted expectations for the January quarter.
Target's (TGT) warning Wednesday, as well, of "dynamic changes" in consumer spending habits over the final week of October, which the retailer said had extended into the current month, has also raised concerns for holiday season sales. Walmart (WMT), however, had a solid third quarter thanks in part to its market-leading position in the grocery space.
Macy's shares were marked 3.4% higher in pre-market trading to indicate an opening bell price of $20.38 each.
5. -- Elon Musk Targets CEO Replacement, Board Member Says
Tesla (TSLA) shares nudged modestly higher in pre-market trading after court testimony in a lawsuit liked to the pay deal agreed with CEO Elon Musk indicated a potential successor has been identified to lead the electric vehicle maker.
James Murdoch, the son of media baron Rupert Murdoch and a member of the Tesla board, told the Delaware Chancery that, over "the last few months" Musk has decided who may replace him as CEO were he to leave, or retire from day-to-day operations, the company he effectively co-founded. The person was not identified by name.
The testimony formed part of a discussion over the time Musk is spending with Twitter, the social media group he purchased last month for $44 billion, and the subsequent impact on Tesla's leadership. Murdoch said the company's audit committee would be need to be "very aware" if Musk's efforts were "taking away from Tesla work".
Tesla shares, which have fallen more than 50% since Musk made his Twitter purchase public in early April, were marked 0.4% higher in pre-market trading to indicate an opening bell price of $187.65 each.