The December S&P 500 futures (ESZ23) are showing a positive trend of +0.34% this morning, driven by strong industrial output and retail sales data from China. Market participants are also anticipating crucial U.S. Producer Price Index (PPI) and retail sales data.
In yesterday’s trading session, the S&P 500 and Dow reached 2-month highs, while the Nasdaq 100 hit a 3-3/4 month high. Home Depot Inc (HD) gained over +5%, leading the Dow’s top percentage gainers after reporting a smaller-than-expected decline in Q3 comparable sales. Regional bank stocks also saw positive movement, with KeyCorp (KEY) surging more than +9%, Zions Bancorporation (ZION) rising over +7%, and Citizens Financial Group Inc (CFG) climbing more than +6%.
Snap Inc (SNAP) increased over +7% following reports that Amazon.com would enable users to make direct purchases from ads within the Snapchat app. On the downside, Fisker Inc (FSR) dropped more than -18% due to downbeat Q3 results and a warning of a delayed 10-Q filing.
The Labor Department’s report showed that consumer prices remained unchanged in October, contrary to an expected +0.1% monthly rise. On an annual basis, headline inflation was +3.2% in October, lower than the predicted +3.3%. U.S. core CPI eased to +4.0% year-on-year in October from +4.1% in September.
Thomas Hayes, chairman at hedge fund Great Hill Capital, commented, “We’re happy to see both headline and core CPI come in lower than expected. It’s telling us that the Fed is done, there’s nothing left for it to do here.”
Chicago Fed President Austan Goolsbee acknowledged the decrease in U.S. inflation but emphasized that there’s still progress needed to reach the central bank’s 2% target.
U.S. rate futures indicate a 94.5% probability of no hike at the December meeting and a 90.8% chance of no hike at January’s monetary policy meeting.
In the earnings arena, Cisco (CSCO), TJX (TJX), Palo Alto Networks (PANW), NetEase (NTES), and Target (TGT) are set to report their quarterly figures today.
U.S. House lawmakers passed a temporary spending bill, reducing the likelihood of a government shutdown on November 18th, extending government funding at current levels through mid-January.
Focus today will be on the U.S. Producer Price Index (PPI) and Core Retail Sales data. Economists expect October U.S. PPI to be +0.1% monthly and +1.9% year-on-year. U.S. Core Retail Sales are forecasted to be -0.2% monthly.
Additionally, U.S. Core PPI data for October is anticipated to be +0.3% monthly and +2.7% year-on-year. The U.S. NY Empire State Manufacturing Index is expected to be -2.80 in November, U.S. Retail Sales for October are projected to be -0.3% monthly, and U.S. Crude Oil Inventories are estimated to be +1.793M.
In the bond markets, U.S. 10-year rates are at 4.467%, up +0.56%.
Euro Stoxx 50 futures are up +0.46% this morning, driven by cooler-than-expected inflation readings in the U.S. and the U.K. Mining and technology stocks are leading the market higher. U.K., France, Italy, and Eurozone economic data have been released, with U.K. October CPI weaker than expected.
Asian stock markets settled in the green, with China’s Shanghai Composite up +0.55%, and Japan’s Nikkei 225 closing up +2.52%. China’s positive sentiment is attributed to a decline in U.S. inflation, potential funding support for the property market, strong economic data, and President Xi Jinping’s visit to the U.S.
Chinese October Industrial Production was +4.6% year-on-year, Chinese October Retail Sales came in at +7.6%, Chinese October Fixed Asset Investment was +2.9%, and the Chinese October Unemployment Rate was at 5.0%.
Japan’s Nikkei 225 closed higher, crossing the 33,000 level for the first time in nearly two months, driven by strong corporate earnings and optimism about the Federal Reserve’s less aggressive hiking cycle. Japan’s GDP for Q3 was -0.5% quarter-on-quarter and -2.1% year-on-year.
In pre-market U.S. stock movers, JD.com Inc Adr (JD), Solid Biosciences LLC (SLDB), Edgio Inc (EGIO), Arcturus Therapeutics Holdings Inc (ARCT), and Wix.Com Ltd (WIX) are showing notable movements.
