Daily Markets: Will Halloween Trading Serve Investors’ Treats?


The big picture today

Asia-Pacific stock indices ended today’s session higher, except for China’s Shanghai Composite and Hong Kong’s Hang Seng, which fell 0.77% and 1.18% , led by the names of energy materials and health technologies. South Korea’s KOSPI rose 1.11%, Australia’s ASX All Ordinaries rose 1.17%, Taiwan’s TAIEX gained 1.26% and India’s Sensex closed up 1.31%. The Japanese Nikkei led the way, up 1.78%, led by technology stocks and boosted by a weak yen, which benefited exporting companies overall.

By midday, European equity indices are mixed and US futures are pointing to a lower open later this morning.

While the US economic calendar is light this morning, data from the Eurozone showed inflationary pressures intensified further in October, likely leaving the European Central Bank on track to raise interest rates further in the coming months. The global economic calendar is heating up this week with several October PMI reports; to cap off the week, we have the US jobs report for October. The earnings calendar is also heating up this week with around 1,700 reports in the next five days.

Amid all of this, the Federal Reserve wraps up its next monetary policy meeting on Wednesday. While he is widely expected to raise interest by 75 basis points coming out of this meeting, what he has to say about the potential size of further rate hikes in his meetings December and February could encourage the current market rally or pour cold water on it. The idea that the Fed could continue to raise the fed funds rate, but by smaller increments, has fueled stock market gains in recent weeks. However, last week’s data readings showed the Fed could stay on its aggressive course.

The uncertainty of what lies ahead has once again put the Fed’s policy statement and Fed Chairman Powell’s comments in the crosshairs. What is less uncertain is that higher interest rates are ahead. Goldman Sachs (GS) economists now expect the US Federal Reserve to raise interest rates to 5%, which is higher than expected.

Data download

International economy

China’s official NBS manufacturing PMI unexpectedly fell to 49.2 in October from 50.1 the previous month, missing the market forecast of 50.0 and pointing to the lowest reading since July. The NBS non-manufacturing PMI for China fell to 48.7 in October from 50.6 in September and was the first contraction in the services sector since May.

The initial GDP reading for the Eurozone rose 0.2% quarter-on-quarter in Q3 2022. This reading matched the consensus forecast, but was down sharply from 0.7% in Q2 2022. Preliminary reading of 3Q 2022 GDP for the Eurozone rose 2.1% year-on-year, also much slower compared to the 2Q 2022 reading of 4.3%.

The annual inflation rate in the eurozone continued to break records and jumped to 10.7% in October from 9.9% in September. Energy prices continue to have the greatest impact (up 41.9% vs. 40.7% in September), followed by food, alcohol and tobacco (13.1% vs. 11 .8%). On a monthly basis, consumer prices rose 1.5% in October, the largest increase in seven months.

The European Union is asking Russia to reconsider its decision over the weekend to withdraw from a UN-brokered Black Sea grains deal, cutting shipments from Ukraine, one of major grain exporters in the world.

Domestical economy

At 9:45 a.m. ET, the October reading of the Chicago PMI will be released and the headline figure is expected to rebound to 47 from 45.7 the previous month. Shortly after, at 10 a.m. ET, the Dallas Fed Manufacturing Index for October will be released and it shouldn’t change much from September’s -17.2 reading.

Markets

Markets shrugged off Thursday’s tech earnings as all major benchmarks had a strong day to end the week. The Russell 2000 rose 2.25%, the S&P 500 gained 2.46%, the Dow Jones rose 2.59% and the Nasdaq Composite closed up 2.87%. All sectors were positive, but on a relative basis Consumer Discretionary (0.09%) and Energy (0.35%) lagged as nearly every other sector gained well over 2% , technology rebounding more than 4%. Here’s how the major market indicators stack up since the start of the year:

  • Dow Jones Industrial Average: -9.57%
  • S&P 500: -18.15%
  • Nasdaq compound: -29.04%
  • Russell 2000: -17.74%
  • Bitcoin (USD-BTC): -55.58%
  • Ether (ETH-USD): -57.82%

Stocks to Watch

Prior to the start of trading for stocks listed in the United States, Global Payments (GPN), ON Semiconductor (ON), and XPO Logistics (XPO) will be among the companies declaring their quarterly results.

Shares in Macau casino operators, including Wynn Resorts (WYNN)are under pressure today after the Macau government reinstated some tough COVID restrictions over the weekend, including the lockdown of a major casino.

from shanghai Disney (DIS) The resort suspended operations earlier today to comply with COVID-19 prevention measures, with all visitors at the time of the announcement being asked to remain in the park until they return a negative test. for the virus.

Reports suggest the production of Apple (AAPL) could fall by 30% to Foxconn (FXCOF) Zhengzhou main factory in central China amid new covid restrictions. Foxconn is looking to increase production at other plants to make up for the expected shortfall.

Emerson Electric (EMR) sells a majority stake in its climate technology business which sells compressors and other HVAC products and services used in commercial and residential heating and cooling as well as cold storage at black stone (BX).

Bloomberg reports Thermo Fisher Scientific (TMO) is set to strike a deal to acquire Birmingham, England-based diagnostics company Binding Site for more than £2 billion ($2.3 billion) from private equity fund Nordic Capital.

After today’s market close

Acadia Healthcare (ACHC), Addus HomeCare (ADUS), American Water Works (AWK), Harmonic (HLIT), Heartland Financial (HTLF), Hologic (HOLX), IMAX (IMAX), Lattice Semiconductor (LSCC), NXP Semiconductor (NXPI ), Rambus (RMBS) and Trex (TREX) are expected to be among dozens of companies to report quarterly results after the shares halted trading today. Those looking to find out which companies release their reports when head to the Nasdaq earnings calendar.

on the horizon

tuesday november 1

  • Japan: Au Jibun Bank manufacturing PMI – October
  • China: Caixin China General Manufacturing PMI – October
  • United Kingdom: S&P Global/CIPS UK Manufacturing PMI – October
  • United States: S&P Global Final US Manufacturing PMI – October
  • United States: construction spending – September
  • United States: ISM manufacturing index – October
  • United States: JOLTS job vacancies report – September

Wednesday, November 2

  • Eurozone: S&P Global Final Eurozone Manufacturing PMI – October
  • US: Weekly MBA Mortgage Applications
  • United States: ADP report on the evolution of employment – October
  • United States: EIA Weekly Crude Oil Inventories
  • United States: FOMC rate decision

Thursday, November 3

  • China: Caixin China General Services PMI – October
  • S&P Global/CIPS UK Services PMI – October
  • United Kingdom: Bank of England decision on interest rates
  • United States: Challenger Job Cuts Report – October
  • United States: Initial and Continuing Weekly Unemployment Claims
  • United States: Productivity – 3rd quarter 2022
  • US: S&P Global Final US Services PMI – October
  • United States: Factory orders – September
  • United States: ISM non-manufacturing index – October
  • United States: EIA Weekly Natural Gas Inventories

friday november 4

  • Japan: Au Jibun Bank Japan Services PMI – October
  • Eurozone: S&P Global Eurozone Composite PMI
  • Euro zone: Producer price index – September
  • United States: Jobs report – October

Thought of the day

“The main thing is to keep the main thing as the main thing.” ~Stephen Covy

Disclosures

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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