Daily Markets: More Earnings and September Retail Sales

Figurines of a bull and a bear on a stock chart
Credit: Adobe

Today’s Big Picture

Equity markets in Asia all closed higher today with Japan’s Nikkei 225 adding 1.8%, Hong Kong’s Hang Seng gaining 1.5%, South Korea’s KOSPI up 0.9%, Australia’s ASX 200 rising 0.7%, and China’s Shanghai Composite adding 0.4%. As of midday trading, European equities were on course for their best week since March. U.S. equity futures point to positive moves at the open.

Before the trading bell rings, we’ll get the September Retail Sales report as well as several quarterly earnings reports. Given the impact of the auto industry and rising gas prices, we would advise investors to dig into the meat of the Retail Sales report to better determine where consumers are spending. We’d also point out that with this report, investors will have the ability to examine the data for the September quarter in full, making it a good barometer for what to expect as the September quarter earnings season heats up next week.

Data Download

International Economy

The auto sector continues to suffer with new car registrations in the Eurozone falling 23.1% YoY in September, accelerating from August’s 19.1% decline.

More inflation data today out of Europe with France seeing a 2.2% YoY pace in September, up from 1.9% in August and slightly higher than the expected increase to 2.1%. Italy came rose to 2.5% YoY from 2.0%, but that increase was below expectations set at 2.6%.

Eurozone leaders are expected to authorize emergency measures next week to address the impact of soaring energy costs, with the communique to be discussed today. It isn’t just affecting them though, according to the U.S. Energy Information Administration, U.S. households that use natural gas to heat their homes should expect to see bills that are about 30% higher than last year if the weather is similar to last year.

Domestic Economy

Yesterday’s core PPI reading (ex trade services), came in much lower than expected, rising by just 1% annualized after the 7.8% annualized pace seen during the first 8 months of 2021. In fact, September saw one of the weakest reads since the recovery started in large part by Transportation & Warehousing falling at a nearly 40% pace (annualized), the biggest decline on record going back to 2009. Bottom line is that both PPI Services and PPI Goods (ex Food & Energy) have been peaking out over the past few months, which is good news for those concerned about inflation.

Yesterday’s weekly initial jobless claims dropped to 293k from an upwardly revised 329k for the prior week. This was the first sub-300k reading since the pandemic began, after taking into consideration revisions to prior weeks.

Federal Reserve officials aren’t exactly on the same page concerning inflation. St. Louis Fed President Bullard yesterday stated that he believes the odds of persistently high (aka not transitory) inflation in the U.S. is better than 50/50. Richmond Fed President Barkin is on the other side, stating that he believes rising prices are driven by “supply issues, not policy,” and that he is “willing to be patient to see if workers will return.”

Today’s domestic data releases include Retail Sales, Import & Export Prices, NY Empire State Manufacturing, Michigan Consumer Sentiment (preliminary), and Business Inventories.


Driven by positive economic and earnings news, U.S. equity markets opened well in positive territory and continue to rise from there, boosting the S&P 500 1.7%, its largest 1-day gain since the start of March and all 11 sectors rose at least 1%. The Nasdaq Composite also added 1.7%, its biggest 1-day gain since May, leaving the index up nearly 2.5% over the past two days while the Nasdaq 100 was the biggest gainer, closing up 1.9%. The Dow added 1.6%, closing just 2% under its all-time high from August while the Russell 2000 was the weakest of the lot, adding 1.4%.

After spiking to over 1.6% from 1.3% just a few weeks ago, the yield on the 10-year has slid down to 1.52%, easing investor fears somewhat. We are seeing the Treasury yield curve flattening, which indicates concerns that the Federal Reserve’s expected upcoming tapers/rate hikes will derail the economy. The spread between the 30-year Treasury and the 5-year has fallen to a 17-month low, giving up about half of the steepening seen since mid-2018.

WTI continued its rally, closing over $81 yesterday with Brent almost at $85.

Stocks to Watch

Earnings Announcements & Guidance

Before U.S. equity markets open this morning, Charles Schwab (SCHW), Goldman Sachs (GS), J.B. Hunt Transportation (JBHT), and Sensient (SXT) will be among the companies slated to report their quarterly results.

Alcoa (AA) reported better than expected September quarter bottom-line results fueled by the 31.5% YoY jump in revenue to $3.1 billion, topping the $2.9 billion consensus. The company continues to expect a strong 2021 based on the continued economic recovery and increased demand for aluminum in all end markets. Alcoa also announced it would initiate a quarterly dividend of $0.10 per share and a new $500 million share repurchase program.

Corsair Gaming (CRSR) issued downside guidance for the September quarter and 2021 in full due to “global logistics and supply chain issues, especially by the lack of affordable GPUs in the retail channel."

FuboTV (FUBO) jumped in after-hours trading following news that its Fubo Sportsbook has been named an authorized gaming operator in partnership with NASCAR.

Space tourism company Virgin Galactic (SPCE) announced it will delay the beginning of its commercial space tourism service to the fourth quarter of 2022.

Plant-based food company Very Good Food (VGFC) announced it will launch a pilot program in China at the start of 2022.

Reuters reports Chinese state-owned Yuexiu Property (YUEXF) pulled out of a proposed $1.7 billion deal to buy China Evergrande Group's (EGRNF) Hong Kong headquarters building over worries about the developer's dire financial situation. With more than $300 billion in liabilities, Evergrande has already missed three rounds of interest payments on its international bonds. Looking to ease larger concerns, The People’s Bank of China this morning said Evergrande is its own case and that most other real estate businesses in the country are stable.


Orthopedic solutions company Paragon 28 (FNA) priced its IPO of 7.8 million shares at $16.

MiNK Therapeutics (INKT) priced its 3.3 million share IPO at $12, the low end of the targeted $12-$14 range.

Shares of GitLab (GTLB) starting trading on the Nasdaq yesterday with shares jumping 35% on their first day. Shares were priced at $77 Wednesday night and closed at $103.89, giving the company a market cap of $14.9 billion.

M&A Activity

Hologic (HOLX) signed a definitive agreement to acquire Bolder Surgical, a privately held, U.S.-based company that provides advanced energy vessel sealing surgical devices, for approximately $160 million.

Activist investor Jana Partners has taken a stake in Macy’s (M) and is reportedly urging the company to spin off its e-commerce business.

After Today’s Market Close

No companies are slated to report their quarterly results. Those looking to get a jump on the earnings reports next week should visit Nasdaq’s earnings calendar page.

On the Horizon

  • October 18: Industrial Production, NAHB Housing Market Index, Net Long-term Tic Flows, Foreign Bond Investment, Overall Net Capital Flows
  • October 19: Building Permits, Housing Starts
  • October 21: Weekly Jobless Claims, Philly Fed Manufacturing Index, Existing Home Sales
  • October 22: Markit Service and Marketing PMIs (flash)

Thought for the Day

“Happy Friday! Here’s to all of who made it through another week faking adulthood.” ~Nanea Hoffman

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Chris Versace

Christopher (Chris) Versace is the Chief Investment Officer and thematic strategist at Tematica Research. The proprietary thematic investing framework that he’s developed over the last decade leverages changing economic, demographic, psychographic and technology landscapes to identify pronounced, multi-year structural changes. This framework sits at the heart of Tematica’s investment themes and indices and builds on his more than 25 years analyzing industries, companies and their business models as well as financial statements. Versace is the co-author of “Cocktail Investing: Distilling Everyday Noise into Clear Investing Signals” and hosts the Thematic Signals podcast. He is also an Assistant Professor at NJCU School of Business, where he developed the NJCU New Jersey 50 Index.

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Lenore Elle Hawkins

Lenore Elle Hawkins serves as the Chief Macro Strategist for Tematica Research. With over 20 years of experience in finance, her focus is on macroeconomic influences that create investing headwinds or tailwinds. Lenore co-authored the book Cocktail Investing and in addition to her Tematica work, provides M&A consulting services for companies in Europe looking to expand globally. She holds a degree in Mathematics and Economics from Claremont McKenna College, an MBA in Finance from the Anderson School at UCLA and is a member of the Mont Pelerin Society.

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Mark Abssy

Mark Abssy is Head of Indexing at Tematica Research focused on index and Exchange Traded Product development. He has product development and management experience with Indexes, ETFs, ETNs, Mutual Funds and listed derivatives. In his 25 year career he has held product development and management positions at NYSE|ICE, ISE ETF Ventures, Morgan Stanley, Fidelity Investments and Loomis Sayles. He received a BSBA from Northeastern University with a focus in Finance and International Business.

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