The S&P 500 Index SPY is up by +0.57% today, the Dow Jones Industrial Average DIA is down by -0.11%, and the Nasdaq 100 Index QQQ is up +1.52%. December E-mini S&P futures (ESZ26) are up +0.58%, and December E-mini Nasdaq futures (NQZ26) are up +1.51%.
Stock indexes are mostly higher today, with chipmakers and AI-infrastructure stocks leading the broader market higher after last week’s selloff. Earnings optimism is lifting stocks ahead of this week's earnings results from Meta Platforms, Tesla, and Netflix. Also, weaker crude oil prices today have improved market sentiment and are supportive of stocks.
Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.On the downside, homebuilders are under pressure after today’s US economic news showed the Oct NAHB housing market index fell 3 points to a 14-year low of 29, below expectations of 31.
Mostly better-than-expected Chinese economic news is positive for global growth prospects and stocks. China Q3 GDP rose +1.2% q/q and +4.5% y/y, stronger than expectations of +1.0% q/q and +4.4% y/y. Also, China's Sep industrial production rose +5.5% y/y, right on expectations and the largest increase in 6 months. In addition, China's Sep retail sales rose +1.1% y/y, stronger than expectations of +0.5% y/y and the largest increase in 6 months. Finally, China's Sep surveyed jobless rate unexpectedly fell -0.1 to 5.2%, below the expected 5.3% and signaling a stronger labor market. On the downside, China's Sep new home prices fell -0.14% m/m, the fortieth consecutive month of declines.
Stocks have support from the prospect of solid quarterly earnings results. According to data compiled by Bloomberg Intelligence, Q3 S&P 500 earnings are expected to climb by +25% from a year earlier, up from a July estimate of 22%. As of today, 45 of the S&P 500 companies have reported results, with 80% beating estimates.
Nov WTI crude oil prices (CLX26) are moving lower today on some profit-taking after last week's rally to a 5-week high. US Energy Secretary Wright said Persian Gulf oil flows have recovered to about 80% of their pre-war level, though refined-product shipments remain constrained. Crude oil prices have underlying support from concerns about disruptions to Middle Eastern energy supplies after Houthi rebels in Yemen targeted Yanbu in Saudi Arabia, a significant Red Sea port for Saudi oil exports that avoids the Strait of Hormuz, with missiles and drones. Also, the UK Maritime Trade Operations reported that two tankers were attacked in the Persian Gulf near Saudi Arabia's port city of Jubail over the weekend.
Markets are discounting a 17% chance of a +25 bp Fed rate hike at the next FOMC meeting on October 27-28.
Overseas stock markets are mixed today. The Euro Stoxx 50 fell to a 1-week low today and is down -1.18%. China's Shanghai Composite closed up +0.39%. Japan's Nikkei-225 Stock Average fell to a 1-month low and closed down -0.62%.
December 10-year T-notes (ZNZ6) are down -4 ticks. The 10-year T-note yield is up +3.2 bp to 5.127%. Today’s stock rally has reduced safe-haven demand for government debt, weighing on T-notes. Losses in T-notes are limited amid some safe-haven buying due to the social unrest in France. Weaker WTI crude oil prices today are also lowering inflation expectations and supporting T-notes.
European government bond yields are moving higher today. The 10-year German bund yield is up +3.6 bp to 3.462%. The 10-year UK gilt yield is up +5.7 bp to 5.430%.
The German Bundesbank said in a report today that "inflation risks in the Eurozone are clearly tilted to the upside."
Markets are discounting an 8% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
Chipmakers and AI-infrastructure stocks are moving higher today, recovering some of last week’s rout. The iShares Semiconductor ETF SOXX is up more than +2%. SanDisk SNDK is up more than +6% to lead gainers in the S&P 500 and Nasdaq 100, and Western Digital WDC is up more than +6%. Also, Marvell Technology MRVL is up more than +5%, and Intel INTC, Seagate Technology Holdings Plc STX, Lam Research LRCX, and Micron Technology MU are up more than +4%. In addition, Advanced Micro Devices AMD and Applied Materials AMAT are up more than +3%, and Analog Devices ADI, KLA Corp KLAC, Broadcom AVGO, and Qualcomm QCOM are up more than +2%.
The Magnificent Seven stocks, excluding Meta, are up today, supporting broader market gains. Amazon.com AMZN is up more than +4% to lead gainers in the Dow Jones Industrials, and Tesla TSLA is up more than +3%. Also, Nvidia NVDA, Alphabet GOOGL, and Microsoft MSFT are up more than +1%. In addition, Apple AAPL is up +0.14%. Conversely, Meta Platforms META is down -0.87%.
Cloud infrastructure stocks are climbing today. Applied Digital APLD is up more than +8%, and Nebius Group NV NBIS and Lumentum Holdings LITE are up more than +3%. Also, CoreWeave CRWV and Arista Networks ANET aew up more than +2%, and Oracle ORCL is up more than +1%.
Home builders and building supplies are slipping today after the US Oct NAHB housing market index fell more than expected to a 14-year low. DR Horton DHI and Pulte Group PHM are down more than -2%, and Lennar LEN, KB Home KBH, Toll Brothers TOL, and Builders Firstsource BLDR are down more than -1%.
Disc Medicine IRON is up more than +39% after announcing that its investigational drug bitopertin met all primary and secondary endpoints in a Phase 3 Apollo trial in adults and adolescents with erythropoietic protoporphyria.
Cleveland Cliffs CLF is up more than +13% after reporting Q3 adjusted Ebitda of $612 million, above the consensus of $591.5 million.
Datadog DDOG is up more than +5% after Bernstein upgraded the stock to outperform from market perform with a price target of $350.
NRG Energy NRG is down more than -5% to lead losers in the S&P 500 after Jeffries cut its price target on the stock to $131 from $160.
Ameriprise Financial AMP is down more than -3% after Bank of America Global Research double-downgraded the stock to underperform from buy with a price target of $445.
AGNC Investment Corp (AGNC), BOK Financial Corp (BOKF), Cleveland-Cliffs Inc (CLF), Crown Holdings Inc (CCK), Fifth Third Bancorp (FITB), FNB Corp/PA (FNB), RLI Corp (RLI), Steel Dynamics Inc (STLD), W R Berkley Corp (WRB), Western Alliance Bancorp (WAL), Wintrust Financial Corp (WTFC), Zions Bancorp NA (ZION).
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.
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