Daily Markets: Tentative Deal on Writer's Strike Lifts Entertainment Names

Today’s Big Picture

Asia-Pacific equity markets finished the day mixed. Semiconductor and pharmaceutical names rallied today to help lift Japan’s Nikkei by 0.85%, Taiwan’s TAIEX rose 0.66%, Australia’s ASX All Ordinaries advanced 0.12%, and India’s SENSEX closed flat, eking out a 0.02% gain. South Korea’s KOSPI fell 0.49%, and continuing property developer financing woes weighed on China’s Shanghai Composite which declined 0.54%, and Hong Kong’s Hang Seng closed 1.82% lower in a broad decline led by Consumer Services, and Retail Trade names. European markets are lower across the board in midday trading, and U.S. equity futures point to a flat to lower open.

As we come into the last five trading days of the quarter, with companies starting to prepare for the upcoming earnings reporting cycle and the next Fed meeting just over a month away, markets will be leaning on economic data updates, Fed governor speeches, and updates on the growing number of strike actions affecting various sector of our economy. While the UAW took steps to expand its action against the auto industry, there was a glimmer of hope as Ford (F) came back to the table (see more below).

Other positive news includes the announcement that a tentative deal has been reached in the Hollywood writer’s strike over the weekend, and once approved by WGA-AFTRA members, will be adopted. Movie studio shares are higher in pre-market trading and expectations are that the Communications Services sector will lead markets today (see more below). Given the broader economic impact of this strike, its resolution should have a positive impact not just on the sector but on broader markets as well.

Data Download

International Economy

Today is a relatively light day from an international market-moving economic release perspective. There was an update on the Ifo Business Climate survey in Germany for September which saw that figure come in at 85.7, just under the August print of 85.8 but 0.70 better than expectations. Results below 90 have been seen over the past decade during the second half of 2022 and during the height of the Covid pandemic so this is something to keep an eye on.

Domestic Economy

The Chicago Fed National Activity Index for August is scheduled to be updated at 8:30 am ET with expectations of a slight overall decline of 0.03 as compared to the July 0.12 increase. This measure generally fluctuates between -0.50 and 0.50 so these figures fall well within the historical range.

10:30 am ET sees the September Dallas Fed Manufacturing Index update. Estimates call for an improvement to -12.0 from the previously reported -17.2 for the metro area and broader Texas economy.

Markets

Equities closed the week lower on Friday with all major broad indexes down close to or over 3% since last Monday’s open. The two bright spots in the last trading session were Energy (0.17%) and Technology (0.21%) as concerns about oil supply/demand dynamics remained relatively unchanged and semiconductor names buoyed the tech sector. Financials and Consumer Discretionary took the biggest hits, down 0.77% and 0.98%, respectively. The Nasdaq Composite came close to flat, down a mere 0.09% while the S&P 500 fell 0.23% and both the Russell 2000 and the Dow closed around 0.30% lower.

Despite recent UAW strikes, shares of Ford found some daylight, gaining 1.89% as management took steps to re-engage with union representatives. This shift spared the company from the expansion of strike actions against General Motors (GM), which fell 0.40% and Stellantis (STLA) which advanced a mere 0.10%.

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

• Dow Jones Industrial Average: 2.46%
• S&P 500: 12.52%
• Nasdaq Composite: 26.23%
• Russell 2000: 0.87%
• Bitcoin (BTC-USD): 60.13%
• Ether (ETH-USD): 32.95%

Stocks to Watch

Before U.S. equity markets begin trading today, there are no market bellwether companies reporting quarterly results.

Meta Platforms’ (META) Vice President of Meta India disclosed that she sees “immense growth” opportunities in businesses adopting the WhatsApp platform to engage with the estimated 440 million Facebook users in India. Engagement examples include payments, money transfers, travel reservations, and check-ins to name a few services.

Workers at Canada-based Ford manufacturing plants approved a new three-year contract with 54% of Unifor (Canada's UAW equivalent) which will see salaries rise 10%, 3%, and 2% for each of the next three years. The deal affects all 5,600 workers employed in Canada.

In other strike news, it was reported that the writer’s strike made it a step closer to being resolved as both sides reached an agreement late Sunday. Now that an agreement has been reached, it will require ratification by the WGA, representing approximately 160,000 workers. It is estimated that this strike has had a roughly $5 billion economic impact. Shares of Amazon (AMZN), Netflix (NFLX), Walt Disney Company (DIS), Warner Brothers Discovery (WBD), and Paramount Global (PARA) are being bid up in pre-market trading this morning.

IPOs

Near-term the calendar for such activity looks rather thin. Readers looking to dig deeper into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.

After Today’s Market Close

Thor Industries (THO) is among the names slated to report 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

Tuesday, September 26

• US: S&P/Case-Shiller Home Price YoY - July
• US: S&P/Case-Shiller Home Price MoM - July
• US: CB Consumer Confidence - September
• US: New Home Sales MoM - August
• Korea: Business Confidence - September

Wednesday, September 27

• Germany: GfK Consumer Confidence – October
• US: MBA 30-Year Mortgage Rate - September 22
• US: Durable Goods Orders – August
• US: Weekly EIA Crude Oil Inventories

Thursday, September 28

• Germany: Inflation Rate – September
• US: GDP Growth Rate (Final) - Q2
• US: GDP Price Index (Final) - Q2
• Initial Jobless Claims - September 23
• US: Pending Home Sales - August
• Japan: Unemployment Rate - August
• Japan: Industrial Production (Preliminary) - August

Friday, September 29

• France: Inflation Rate – September
• UK: BoE Consumer Credit - August
• Eurozone: Inflation Rate (Flash) – September
• Eurozone: Core Inflation Rate (Flash) – September
• US: Core PCE Price Index - August
• US: PCE Price Index - August
• US: Personal Spending - August
• US: Personal Income - August
• US: Retail Inventories Ex Autos - August
• US: Wholesale Inventories - August
• US: Chicago PMI - September
• US: Michigan Consumer Sentiment (Final) - September

Thought for the Day

“The Show must go on!” ~ Anonymous

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

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