Daily Markets: Can the Markets Keep the Rally Going?

Today’s Big Picture

Asia-Pacific equity markets finished the day lower following yesterday’s break in the recent U.S. market rally, except for Taiwan’s TAIEX, which gained 0.21% as Consumer Services names helped overcome selling in the Transportation sector. India’s SENSEX closed flat, down a mere 0.03%, and Australia’s ASX All Ordinaries declined 0.22%. China’s Shanghai Composite fell 1.14%, Japan’s Nikkei dropped 1.34%, Hong Kong’s Hang Seng gave back 1.65%, and South Korea’s KOSPI closed 2.33% lower in a broad decline led by Energy Minerals names after yesterday’s strong short-covering fueled rally. European markets are down in midday trading, and U.S. equity futures point to a lower open.

Following a seven-day winning streak, the longest since January, and the overall market coming off its best week since 2023, investors are closely watching the market technicals as they wait for the next round of catalysts. The major market averages continue to face stiff resistance ahead after last week’s rally from oversold conditions that were fueled partly by short-covering. Today we have a barrage of Fed officials making the rounds and folks will be looking for any sentiment shifts following last week’s weaker-than-expected economic data, which supports the soft landing and Goldilocks narrative making its way through the market. They will also be looking for clues as to what Fed Chair Powell is likely to say about monetary policy prospects when he is back in the spotlight tomorrow and Thursday.

Data Download

International Economy

Exports from China dropped by 6.4% YoY to $274.83 billion in October, faster than a 6.2% fall in the previous month and worse than market forecasts of a 3.3% decline. Imports into China unexpectedly rose by 3.0% YoY $218.3 billion in October, beating market consensus of a 4.8% drop and swinging from a 6.2% drop in September. While warning that real estate struggles persist, following better-than-expected 3Q 2023 performance, the International Monetary Fund (IMF) raised its China growth forecast to 5.4% for 2023. The IMF continues to forecast China’s economy slowing 4.6% growth in 2024.

Industrial producer prices in the Euro Area fell 12.4% YoY in September, This September figure follows the 11.5% decline in August and was a tad shy of the expected 12.5% drop. Excluding energy, producer price inflation decelerated to 0.5% YoY in September, down from 1.0% in August. On a monthly basis, producer prices rose by 0.5%, marking the second consecutive month of increase.

Domestic Economy

Before the market digs into the September Consumer Credit report that will be released at 3 PM ET today, it will face five Federal Reserve Officials, including Fed Governor Christopher Waller, Vice Chair for Supervision Michael Barr, and New York Fed President John Williams.

Inside the September Consumer Credit report, which the market expects will show a net increase of around $10 billion during the month, ahead of the holiday shopping season, investors will focus on consumer credit card debt levels. Between credit card interest rates and debt balances as well as the falling savings rate, the question will be how much spending power consumers have.

Markets

After just about a week of rallying, equities took a small hiatus today. Real Estate (-1.37%) gave back the most, followed by Energy, which dropped 1.13% while sector leaders included Healthcare and Technology with both gaining just over 0.65%. The Dow added 0.10%, the S&P 500 rose 0.18%, the Nasdaq Composite grew 0.30% while the Russell 2000 fell 1.29%. While markets were generally mixed shares of Moderna (MRNA) fell 7.04% on lower earnings and expectations due to the lack of uptake for the latest round of Covid boosters.

Here’s how the major market indicators stack up year-to-date:

• Dow Jones Industrial Average: 2.86%
• S&P 500: 13.71%
• Nasdaq Composite: 29.16%
• Russell 2000: -1.32%
• Bitcoin (BTC-USD): 110.90%
• Ether (ETH-USD): 58.31%

Stocks to Watch

Before U.S. equity markets begin trading today, Air Products (APD), Celsius (CELH), CNH Industrial (CNHI), DR Horton (DHI), GlobalFoundries (GFS), Ingredion (INGR), Planet Fitness (PLNT), Oscar Health (OSCR), Squarespace (SQSP), UBS (UBS), and Uber (UBER) will report their latest quarterly results.

Pre-market activity is slightly lighter this morning as 235 of the 503 stocks in the S&P 500 are trading before the open with 143 decliners and 92 gainers. Shares of Invesco Ltd (IVZ) and Coterra Energy (CTRA) are ahead while Welltower Inc (WELL) and Vertex Pharmaceutical (VRTX) are being bid lower.

NXP Semiconductor (NXPI) reported better-than-expected September quarter results and guided its current quarter EPS to match the consensus range. However, for its 2023 revenue, the company issued downside guidance of ~$13.21 billion versus the $13.27 billion consensus. During the September quarter, NXP’s automotive business rose 5% YoY while the communications & infrastructure segment climbed 8% YoY. On a sequential basis, the company’s mobile segment revenue soared 33% while its industrial & IoT business rose 5%.

Shares of Veeco Instruments (VECO) are moving higher this morning following the company’s September quarter results that bested consensus expectations. During the quarter, Veeco’s shipments remained elevated due to broad-based demand from its logic and memory customers. On the , management shared that its backlog carries it into 2024 but stopped short of giving formal guidance for the year. For the current quarter, Veeco forecasts EPS of $0.35-$0.45 versus the $0.40 consensus with revenue of $155-$175 million as compared to the $174.41 million consensus.

Hims & Hers Health (HIMS) reported a loss of $0.04 per share, which was in line with consensus estimates while revenues rose 56.6% YoY to $226.7 million versus the $220.1 million expectation. Its management stated that subscribers grew to 1.4 million, up 56% YoY for the quarter, and spoke to the company’s AI-based MedMatch platform as being a source of expected growth. The company issued upside guidance for Q4, seeing revenues of $243-248 million versus the $227.57 consensus and full-year revenues of $868-873 million as compared to the $846.61 million expectation.

RAM truck brand parent Stellantis (STLA) has announced it is shifting away from offering its iconic Hemi engine in its line of light-duty pickup trucks as the company works towards hitting emission goals. 2025 sees the manufacturer shifting to a hybrid drivetrain which will utilize a non-Hemi six-cylinder engine that will act as a generator for the battery pack of the electric drivetrain.

Days after General Motors’s (GM) autonomous Cruise unit said it was pausing all driverless operations, GM announced it plans to temporarily halt production of its fully autonomous Cruise Origin van. The National Highway Traffic Safety Administration recently opened a new probe into whether Cruise is taking sufficient precautions to safeguard pedestrians.

As was widely reported, WeWork (WE) filed for protection under Chapter 11 of the U.S. Bankruptcy Code.

JM Smucker (SJM) has extended its offer to acquire Hostess Brands (TWNK) by one day to November 7 at 11:59 PM ET and could be extended further.

IPOs

Readers who want to dig deeper into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.

After Today’s Market Close

Akami (AKAM), Axon (AXON), Cava Group (CAVA), Coty (COTY), Dutch Bros (BROS), Inter Parfums (IPAR), Mosaic (MOS), and Rackspace Technology (RXT) will report their quarterly results after equities stop trading. Those looking for more on upcoming quarterly earnings reports should head on over to Nasdaq’s Earnings Calendar.

On the Horizon

Wednesday, November 8

• Japan: Leading Indicators – September
• Germany: Inflation Rate – October
• Eurozone: Retail Sales – September
• US: Weekly MBA Mortgage Applications
• US: Weekly EIA Crude Oil Inventories

Thursday, November 9

• Japan: Eco Watchers Survey - October
• China: Inflation Rate, Producer Price Index – October
• China: Retail Sales - September
• US: Weekly Initial & Continuing Jobless Claims
• US: Wholesale Inventories – September
• US: Weekly EIA Natural Gas Inventories

Friday, November 10

• UK: GDP Growth – 3Q 2023
• UK: GDP, Manufacturing and Industrial Production – September
• China: Vehicle Sales - October
• US: The University of Michigan Consumer Sentiment Index (Preliminary) – November (10:00 AM ET)

Thought for the Day

“Autumn teaches us the beauty of letting go. Growth requires release—it’s what the trees do.” ~Anonymous

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

Other Topics

Stocks Economy Earnings Central Banks