December Nasdaq 100 E-Mini futures (NQZ25) are trending down -0.27% this morning as investors digest disappointing results from Netflix and Texas Instruments.
Netflix (NFLX) slumped over -6% in pre-market trading after the streaming giant reported weaker-than-expected Q3 EPS. Separately, Texas Instruments (TXN) plunged more than -8% in pre-market trading after the analog chipmaker posted weaker-than-expected Q3 EPS and provided underwhelming Q4 guidance. Peers Microchip Technology (MCHP), NXP Semiconductors N.V. (NXPI), and ON Semiconductor (ON) fell over -2% in pre-market trading.
Investors now await a new round of corporate earnings reports, with a particular focus on results from Magnificent Seven member Tesla.
In yesterday’s trading session, Wall Street’s major indexes ended mixed. General Motors (GM) jumped over +14% and was the top percentage gainer on the S&P 500 after the automaker posted better-than-expected Q3 results and raised its full-year adjusted EPS guidance. Also, Warner Bros. Discovery (WBD) climbed more than +10% and was the top percentage gainer on the Nasdaq 100 after the entertainment company announced it had initiated a review of strategic alternatives. In addition, Halliburton (HAL) surged over +11% after the company reported stronger-than-expected Q3 results. On the bearish side, mining stocks slumped as gold and silver prices sank, with Coeur Mining (CDE) tumbling more than -16% and Newmont (NEM) sliding over -9% to lead losers in the S&P 500.
“October has, so far, lived up to its spooky season moniker. Yet equities continue to be resilient in the face of an unending stream of bad news,” said Victoria Greene at G Squared Private Wealth.
Third-quarter corporate earnings season is in full swing, with all eyes today on Tesla (TSLA), the first of the Magnificent Seven companies to report. Investors will also monitor earnings reports from other prominent companies such as International Business Machines (IBM), Thermo Fisher Scientific (TMO), AT&T (T), and Lam Research (LRCX). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +7.2% increase in quarterly earnings for Q3 compared to the previous year, marking the smallest rise in two years.
On the economic data front, investors will focus on the EIA’s weekly crude oil inventories report, set to be released in a couple of hours. Economists expect this figure to be 2.2 million barrels, compared to last week’s value of 3.5 million barrels.
In addition, market participants will parse comments today from Fed Governor Michael Barr. Notably, Barr’s speech will be delivered via pre-recorded video, as Fed officials are currently in a blackout period before the October 28-29 policy meeting.
U.S. rate futures have priced in a 96.7% chance of a 25 basis point rate cut and a 3.3% chance of no rate change at next week’s FOMC meeting.
Meanwhile, the U.S. government shutdown continues, with no clear signs of compromise between Republicans and Democrats. The government shutdown has entered its 22nd day, putting it on the verge of becoming the second-longest in history. The shutdown means that official U.S. economic data continue to be delayed. However, the Department of Labor has recalled a limited number of employees to release the September inflation report on a delayed basis this Friday, making a rare exception to publish data during the shutdown.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 3.957%, down -0.10%.
The Euro Stoxx 50 Index is down -0.44% this morning as investors digest a mixed bag of corporate earnings reports. Uncertainty surrounding planned negotiations between the U.S. and other nations also dampened sentiment. A planned summit between U.S. President Donald Trump and Russian President Vladimir Putin was put on hold on Tuesday, while uncertainty persisted over a potential meeting between Trump and Chinese leader Xi Jinping. Consumer products and services stocks underperformed on Wednesday. Semiconductor stocks also slumped following weaker-than-expected guidance from U.S. peer Texas Instruments. Meanwhile, data from the Office for National Statistics released on Wednesday showed that the U.K.’s annual inflation rate in September unexpectedly remained unchanged from the prior month, increasing the likelihood that Bank of England officials may lower interest rates later this year. Quilter’s Lindsay James said in a note, “Overall, this is an encouraging sign and could mark the peak.” The data prompted traders to increase wagers on BoE rate cuts in the coming months. In corporate news, L’Oreal (OR.FP) slid over -6% after the French cosmetics company posted weaker-than-expected Q3 sales. Also, Hermes Intl (RMS.FP) fell more than -4% after its quarterly results failed to meet investors’ lofty expectations. At the same time, Barclays Plc (BARC.LN) rose over +4% after the bank raised its full-year earnings guidance and announced a 500 million pound buyback.
U.K. CPI and U.K. Core CPI data were released today.
U.K. September CPI rose +3.8% y/y, weaker than expectations of +4.0% y/y.
U.K. September Core CPI rose +3.5% y/y, weaker than expectations of +3.7% y/y.
Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.07%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.02%.
China’s Shanghai Composite Index closed slightly lower today, weighed down by declines in gold stocks, while ongoing U.S.-China trade uncertainty also kept investor sentiment in check. Gold mining stocks fell on Wednesday after gold prices posted their steepest drop in more than a decade in the previous session amid profit-taking. Investors were also cautious after mixed signals from U.S. President Donald Trump over an upcoming meeting with Chinese President Xi Jinping in South Korea. President Trump said on Tuesday that he expects to reach a “good deal” on trade with his Chinese counterpart. However, the U.S. president also conceded that the much-anticipated talks might not take place. Meanwhile, U.S. Treasury Secretary Scott Bessent is set to meet with Chinese Vice Premier He Lifeng this week in Malaysia, potentially helping to ease trade tensions. Investor attention also remains on the Fourth Plenum, which began on Monday and runs through Thursday. It will outline the government’s economic, political, and social priorities along with its development plans for the next five years. Although the detailed plan won’t be released until March next year, investors will closely examine the post-meeting readout for policy clues. In corporate news, Zhuhai Zhumian Group jumped +10% after announcing plans to sell its entire 100% stake in Zhuhai Gree Real Estate, marking a full exit from the real estate business.
Japan’s Nikkei 225 Stock Index closed just below the flatline today. Automobile stocks outperformed on Wednesday, supported by a weaker yen and hopes for lower gasoline taxes in Japan. At the same time, technology and financial stocks retreated. The benchmark index initially dropped as much as 1.4% but recovered most of those losses in the afternoon session after Reuters reported that Japan’s new Prime Minister, Sanae Takaichi, was preparing an economic stimulus package expected to surpass last year’s $92 billion to help households cope with inflation. The report said the final size of the package has not yet been determined, adding that an announcement could come as early as next month. Meanwhile, Japan’s new economics minister, Minoru Kiuchi, pledged on Wednesday to continue supporting the nation’s economy against the challenges posed by higher U.S. tariffs and persistent domestic inflation. On monetary policy, Kiuchi said the government will maintain close communication with the Bank of Japan to achieve a target of stable 2% inflation. On the economic front, government data released on Wednesday showed that Japan’s exports rose in September for the first time in five months, driven by higher shipments of chips and electronic parts, though exports to the U.S. continued to fall despite lower U.S. tariffs on Japanese autos that took effect during the month. Still, economists remain cautious about the outlook for domestic exporters in the new environment of trade protectionism. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -2.03% to 29.45.
The Japanese September Trade Balance stood at -234.6 billion yen, weaker than expectations of 22 billion yen.
The Japanese September Exports rose +4.2% y/y, weaker than expectations of +4.6% y/y.
The Japanese September Imports rose +3.3% y/y, stronger than expectations of +0.6% y/y.
Pre-Market U.S. Stock Movers
Netflix (NFLX) slumped over -6% in pre-market trading after the streaming giant reported weaker-than-expected Q3 EPS.
Texas Instruments (TXN) plunged more than -8% in pre-market trading after the analog chipmaker posted weaker-than-expected Q3 EPS and provided underwhelming Q4 guidance.
Mattel (MAT) slid over -5% in pre-market trading after the toymaker reported downbeat Q3 results.
Intuitive Surgical (ISRG) jumped over +16% in pre-market trading after the company reported upbeat Q3 results and raised its full-year procedure growth guidance.
DraftKings (DKNG) rose more than +3% in pre-market trading after the betting company announced it had acquired Railbird Technologies, a federally regulated trading venue, marking its entry into prediction markets.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Wednesday - October 22nd
Tesla (TSLA), IBM (IBM), Thermo Fisher Scientific (TMO), AT&T (T), Lam Research (LRCX), GE Vernova LLC (GEV), Amphenol (APH), Boston Scientific (BSX), CME Group (CME), Moody’s (MCO), O’Reilly Automotive (ORLY), Vertiv Holdings Co (VRT), United Rentals (URI), Hilton Worldwide (HLT), Kinder Morgan (KMI), Crown Castle (CCI), Raymond James Financial (RJF), Las Vegas Sands (LVS), Westinghouse Air Brake (WAB), Teledyne Technologies (TDY), FirstEnergy (FE), Northern Trust (NTRS), NVR (NVR), Teck Resources B (TECK), Lennox (LII), Packaging America (PKG), Medpace Holdings (MEDP), Reliance Steel&Aluminum (RS), Graco (GGG), Annaly Capital Management (NLY), Avery Dennison (AVY), Equity Lifestyle (ELS), CACI (CACI), Stifel (SF), Globe Life (GL), Molina Healthcare (MOH), SEI (SEIC), Alcoa (AA), Quantumscape (QS), Old National Bancorp (ONB), Lithia Motors (LAD), Knight-Swift Trans (KNX), Churchill Downs (CHDN), Essential Properties (EPRT), Taylor Morrison Home (TMHC), First American (FAF), Wyndham Hotels (WH), West Fraser Timber (WFG), Selective (SIGI), Hexcel (HXL), Plexus (PLXS), Sonoco Products (SON), Travel + Leisure Co (TNL), Viking Therapeutics Inc (VKTX), Texas Capital (TCBI), United Community Banks (UCB), M/I Homes (MHO), Unifirst (UNF), Robert Half (RHI), WesBanco (WSBC), BankUnited (BKU), WD-40 (WDFC), Banc of California (BANC), Goosehead Insurance (GSHD), Oceaneering International (OII), ASGN (ASGN), Stewart Info Services (STC), LendingClub (LC), OFG Bancorp (OFG), Century Communities (CCS), Getty (GTY), Live Oak Bancshares Inc (LOB), Veris Residential (VRE), PROG Holdings (PRG), Healthcare Services (HCSG), QCR (QCRH), OceanFirst (OCFC), Origin Bancorp (OBK).
