Stocks Steady on Mixed Earnings
- NASDAQ Composite -0.12% Dow -0.04% S&P 500 -0.02% Russell 2000 +0.31%
- NASDAQ Advancers: 1213 Decliners: 1120
- Today’s Volume (vs. Wednesday) -3.7%
- Crude $57.15 +$0.03, Gold $1471.60 +$8.30, VIX 13.33 +0.33
Market Movers
- U.S. September PPI +0.4% vs. +0.3% consensus
- October ex-Food & Energy +0.3% vs. +0.2% consensus
- PPI Y/o/Y increased 1.1% vs +0.9%
- U.S. Initial Weekly Jobless Claims reported at 225,000 vs. consensus 214,000
- U.S. Continuing Jobless Claims reported at 1.683 million in-line with consensus
- DOE inventory showed U.S. crude build of 2.219 million barrels
- Fed Chair Powell addresses the House Budget Committee today at 10am
- Reaction to earnings: VIAB +3%, WMT +2%, WB -16%, CSCO -7%, TCOM -5%
Chris’ Commentary
Markets are trading mixed to flat to start the day following some mixed earning reports, slightly inflationary U.S. economic data and China trade headlines. Chinese economic data was also a bit softer than expected. Industrial production in China rose +4.7 year-over-year, below consensus of +5.4% and lower than the +5.8% increased released in September.
On Wednesday, the S&P 500 and Dow Jones Industrial Average edged higher to close at record levels, even as trade reports revealed that the U.S. and China continue to waver. Equity trading volumes continue to trend below yearly averages during this march higher.
Currently, eight of the 11 major S&P 500 sectors are trading higher. Real Estates and Consumer Discretionary lead the pack while Healthcare and Tech lag. Crude oil is up +0.9% while Gold also trades higher. The dollar is higher for the 3rd day in a row. The yield on the 10-yr slips to 1.83%, declining nearly 6% since Friday.
The Producer Price Index (PPI) measures price change from the perspective of the seller. October’s numbers were stronger than analysts’ expectation as were the year-over-year comps. PPI final demand for October rose +0.4% from September (consensus +0.3%) while ex-food and energy rose +0.3% (consensus +0.2%). The year-over-year change for these measures came in at +1.1% and +1.6% respectively, versus +1.4% and +2.0% in September. This was the smallest annual gain in three years. Today’s report was slightly hotter than expected, indicating modest inflationary pressure.
Unemployment numbers released by the U.S. Department of Labor reported the largest increase of new claims since June. Though still running near record lows, the number of new applications was higher than most economists thought. Reported Initial Jobless Claims rose to 225,000 vs 215,000 consensus. Reported Continuing Claims were in-line with expectations at 1.683 million claims. Continuing and initial claims were both revised slightly higher. Continuing claims were revised slightly higher last week to 1.693 million from 1.689 million.
Sector Recap
Brian’s Technical Take
Defensives continue to lead the charge this week on the rotation back into safe havens. The US Dollar Index (DXY) is holding steady for the fourth consecutive day (aka “bull flagging”) after last week’s breakout from a “double bottom” pattern (see 11/7 MIDDAY Update).
Crude oil (WTI) is setting up for a potential move. For nearly two weeks it has been facing stiff resistance at the ~$57.50 level following a +12% gain off the October lows. The daily RSI has stalled in the high 50’s and price is locked in between the 100-day (support) and 200-day (resistance) moving averages. Whichever side it closes above/below could determine direction of the next trend. These are minor ripples within a larger, sideways range.
Nasdaq's Market Intelligence Desk (MID) Team includes:
Charles Brown is Associate Vice President on The Market Intelligence Desk with over 20 years of equity capital markets experience. Charlie has extensive knowledge of equity trading on both floor and screen-based marketplaces. Charlie assists with the management of The Market Intelligence Desk and works with Nasdaq listed companies providing them with insightful objective trading analysis.
Steven Brown is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq with over twenty years of experience in equities. With a focus on client retention he currently covers the Financial, Energy and Media sectors.
Christopher Dearborn is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq. Chris has over two decades of equity market experience including floor and screen-based trading, corporate access, IPOs and asset allocation. Chris is responsible for providing timely, accurate and objective market and trading-related information to Nasdaq-listed companies.
Brian Joyce, CMT is a Managing Director on the Market Intelligence Desk (MID) at Nasdaq. Before joining Nasdaq, Brian spent 16 years as an institutional trader executing equity and options orders for both the buy side and sell side. He also provided trading ideas and wrote technical analysis commentary for an institutional research offering. Brian focuses on helping Nasdaq’s Financial, Healthcare and Transportation companies, among others, understand the trading in their stock. Brian is a Chartered Market Technician (CMT).
Michael Sokoll, CFA is Associate Vice President on the Market Intelligence Desk (MID) at Nasdaq with over 25 years of equity market experience. In this role, he manages a team of professionals responsible for providing NASDAQ-listed companies with real-time trading analysis and objective market information.
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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