Stock market futures are up this morning, ahead of a few key earnings releases scheduled for after the closing bell today. These include the closely watched earnings report from semiconductor manufacturer NVIDIA (NVDA), which is one of the key drivers of the artificial intelligence (AI) trend and whose weighting in the S&P 500 and Dow Jones Industrial Average is quite notable. Elsewhere, U.S. multimedia company Comcast (CMCSA) announced plans to spin off its cable networks division, which includes channels such as CNBC and MSNBC, among others. Meanwhile, shares of Target (TGT), a U.S. national retailer, fell after it disclosed weaker fiscal third-quarter earnings and a lackluster outlook for the Christmas shopping season. Other retailers fell in tandem with the news, suggesting some weakness in the consumer space. However, shares of Walmart (WMT), the world’s largest retailer, are higher this morning after it reported better results after the close yesterday. Overall, these factors will likely net a positive start to the trading day.
Yesterday, the stock market saw a strong performance, particularly from a few key sectors, including major technology stocks. The stock indices showed a clear upward movement in the early portion of trading and maintained their positions throughout the day. The S&P 500 rose 23 points (up 0.40%), and the NASDAQ increased 196 points (up 1.04%). However, the Dow Jones Industrial Average declined 121 points (down 0.66%), largely due to underperformance by United Health Group (UNH). Market breadth was rather even on the day, with decliners outpacing advancers by a 1.1-to-1.0 ratio. Technology and communications issues vastly outperformed the broader markets, while financial and energy stocks were amongst the weakest on the day.
In commodity news, oil prices rose yesterday as traders priced in rising tensions in the war in Ukraine, following several days of weakness. Elsewhere, U.S. Treasury bond yields were mostly higher yesterday, with short-term rates rising less than those with longer durations. This shows that traders were largely moving out of their bond positions to fund moves into the stock market. The Chicago Board Options Exchange Volatility Index, or VIX, commonly known as the fear index, fell in the early portion of the trading session before rising into the close.
In the days ahead, several important economic reports are scheduled for release. These include the Philadelphia Fed Manufacturing Survey, existing home sales, and the Conference Board Leading Economic Index (LEI) on Thursday. On Friday, the November Standard & Poor’s Flash Services Purchasing Manager’s Indices for services and manufacturing will be released. On the earnings front, a few dozen mostly smaller companies will report quarterly results in the days ahead, with much of the news concentrated in smaller retailers. This should provide some insight into the strength of the consumer economy. - John E. Seibert III
At the time of this article’s writing, the author held positions in one or more of the companies mentioned.
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