Today’s Big Picture

Asia-Pacific equity indexes ended today’s session mixed. Hong Kong’s Hang Seng declined 0.23% and China’s Shanghai Composite fell 0.43% while Australia’s ASX All Ordinaries gained 0.29%, Taiwan’s TAIEX advanced 0.94% and South Korea’s KOSPI closed 1.15% higher. Japan’s Nikkei set the pace, up 1.25% led by Non-metal Materials and Electrical/Machinery sectors. India’s markets are closed today marking Guru Nanak Jayanti which celebrates the birth of the founder of Sikhism and one of the most celebrated Sikh gurus. 

By mid-day trading, major European equity indices are mixed, and U.S. futures point to a positive open later this morning. Even as the latest wave of quarterly earnings reports is being released today, with little in the way of fresh economic data, equities could tread water as they wait to see the results of today’s 2022 midterm elections in the U.S. Several races are expected to be extremely close and with expected delays in counting mail-in ballots, not to mention potential challenges to some results, final winners and losers may not be known by the end of today. Aside from close races requiring recounts, we are also on guard for claims of election fraud, something that will most likely lead to an increase in market volatility. As we wait for the midterm election outcome, the market will quickly turn its focus to the September Consumer Price Index, which will be published before the market open on Thursday, November 10. 

Data Download

International Economy

September household spending in Japan rose by 2.3% YoY, slowing from a 5.1% gain the month before and missing the market consensus of 2.7%. Concern over a global economic slowdown and risks of the yen’s further weakness led the flash reading for Japan’s index of leading economic indicators to fall to 97.4 in September. That was the lowest reading since December 2020 and fell compared to the final August figure of 101.1.

Eurozone retail sales rose by 0.4% MoM in September, matching the consensus forecast and better than the prior three months which were either unchanged or down. Consumers remained cautious amid rising borrowing costs leading September retail sales to fall 0.6% YoY. 

Domestic Economy

The NFIB Small Business Optimism Index fell to a three-month low of 91.3 in October compared to 92.1 in September. Thirty-three percent of owners reported that inflation was the most important issue in operating their business, up three points from September. At the same time, the number of owners who plan to increase employment in the next three months fell to 20% and 50% said they raised average selling prices. 

Markets

Markets rallied ahead of today’s midterm elections as the Russell 2000 rose 0.55%, the Nasdaq Composite gained 0.85%, the S&P 500 advanced 0.96% and the Dow closed 1.31% higher. Sectors were mixed with Utilities down almost 2% and Consumer Discretionary off 0.70%, were offset by Communications Services and Technology up 1.79% and 1.67%, respectively. China’s anti-covid measures hit cruise lines yesterday as Royal Caribbean Group fell 4.92% and Norwegian Cruise Lines was off 1.60%.

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

  • Dow Jones Industrial Average: -9.66%
  • S&P 500: -20.13%
  • Nasdaq Composite: -32.47% 
  • Russell 2000: -19.40%
  • Bitcoin (BTC-USD): -55.64%
  • Ether (ETH-USD): -57.48%

Stocks to Watch

Before trading kicks off for U.S.-listed equities, Builders FirstSource (BLDR), CNH Industrial (CNHI), Coty (COTY), DuPont (DD), Hain Celestial (HAIN), Lumentum (LITE), Planet Fitness (PLNT), and SunPower (SPWRwill be among the companies slated to report their latest quarterly results. 

Activision Blizzard (ATVI) reported September quarter results that topped expectations with 368 million Activision Blizzard Monthly Active Users as the company exited September. The company shared that its planned $69 billion sale to Microsoft (MSFT) remains on track to close in the quarter ending in June 2023.

September quarter revenue at Take-Two (TTWO) rose 52.3% YoY to $1.5 billion, falling ever so short of the $1.54 billion consensus. For the current quarter, however, the company guided its top line to $1.41-1.46 billion vs. the $1.68 billion consensus. Take-Two shared that its “reduced forecast reflects shifts in our pipeline, fluctuations in FX rates, and a more cautious view of the current macroeconomic backdrop, particularly in mobile.”

While TripAdvisor (TRIP) landed September quarter results that included revenue climbing 51.5% YoY to $459 million vs the $443.24 million consensus, the company telegraphed a modest slowdown in revenue for the current quarter. That was still better than the December quarter revenue consensus of $337.9 million.

Despite harvesting September quarter revenue that rose 56.5% YoY to $5.35 billion, Mosaic’s (MOS) top and bottom line for the quarter missed respective consensus expectations. Looking forward the company sees continued supply constraints for the potash and phosphate market persisting well into 2023. 

Nvidia (NVDA) introduced its A800 GPU, an alternative to its A100 GPU for the China market. The company confirmed the new chip adheres to recently introduced U.S. export rules to prevent access to cutting-edge tech.

Lordstown Motor (RIDE) announced Foxconn will invest $170 of fresh capital into the company. Previously, Foxconn revealed several concept cars and is planning to build a model with EV company Fisker (FSR).

IPOs

Online game developer Snail (SNAL) and oncology drug developer Acrivon Therapeutics (ACRV) are expected to start trading in the week ahead. Readers looking to dig more into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.

After Today’s Market Close

3D Systems (DDD), Affirm (AFRM), Akamai (AKAM), Allbirds (BIRD), AMC Entertainment (AMC), Axon (AXON), GoodRX (GDRX), Plug Power (PLUG), SailPoint (SAIL), Sprouts Famers Market (SFM), Sweetgreen (SG), and Walt Disney (DIS) are expected to report quarterly results after equities stop trading today. Those looking for more on which companies are reporting when, head on over to Nasdaq’s Earnings Calendar

On the Horizon

Wednesday, November 9

  • China: Consumer Price Index, Producer Price Index – October
  • Japan: Economy Watchers Index – October
  • US: Weekly MBA Mortgage Applications 
  • US: Wholesale Inventory – September
  • US: Weekly EIA Crude Oil Inventories

Thursday, November 10

  • US: Weekly Initial & Continuing Jobless Claims
  • US: Consumer Price Index – September 
  • US: Weekly EIA Natural Gas Inventories 

Friday, November 11

  • Japan: Producer Price Index – October
  • UK: 3Q 2022 GDP 
  • UK: Industrial and Manufacturing Production – September
  • Germany: Consumer Price Index – October
  • US: University of Michigan Consumer Sentiment Index (Preliminary) – November 

Thought for the Day

“No matter how much you screw up your life, you can fix it.” ~ Will Ferrell

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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