Today’s Big Picture

Asia-Pacific equity markets finished the day mixed: Hong Kong’s Hang Seng closed 2.08% lower in a broad decline led by Health Services names while China’s Shanghai Composite fell 0.56% and Japan’s Nikkei fell 0.26%. South Korea’s KOSPI came close to flat, down a mere 0.08%. Taiwan’s TAIEX gained 0.17%, Australia’s ASX All Ordinaries added 0.31%, and India’s SENSEX advanced 1.10% led by Technology, and Banking stocks. European markets are mostly higher in midday trading, and U.S. equity futures point to a positive market open later this morning.

Yesterday, Federal Reserve Governor Christopher Waller shared his view that current monetary policy appears to be sufficiently restrictive to cool inflation back down to the central bank’s 2% target. The market viewed that as another data point for further rate hikes being off the table and overshadowed other comments yesterday from Federal Reserve Governor Michelle Bowman, who supports further tightening of monetary policy to return inflation to the central bank’s target if incoming data suggests progress on inflation “has stalled or is insufficient to bring inflation down to 2% in a timely way.”

We have another round of Fed officials making the rounds today, but the main events of this week remain the upcoming OPEC+ meeting, final November PMI data for China, the eurozone, and the U.S., and Fed Chair Powell’s appearance on Friday.

And finally, on a more somber note, Charlie Munger, Warren Buffett’s long-time right-hand man, passed away yesterday at the age of 99.

Data Download

International Economy

Consumer credit in the UK grew by £1.289 billion in October, easing from a downwardly revised £1.370 billion the prior month and missing market estimates of £1.5 billion. The October figure was the smallest increase in consumer credit in five months, but still rose 8.1% YoY. Credit card borrowing rose 12.4%, a slightly slower pace than 12.5% the month before.

The economic sentiment indicator in the Euro Area edged up to 93.8 for November, showing a slight increase from the revised 93.5 of the previous month and close to the market’s expected 93.7. Consumer Confidence for the bloc increased to -16.90 points in November from -17.80 points in October.

Domestic Economy

In addition to the usual Wednesday fare that is the weekly data for the MBA Mortgage Applications Index and crude oil inventory data from the Energy Information Administration, today brings the second estimate for 3Q 2023 GDP. The initial print pegged the economy growing at 4.9%, up from 2.1% in 2Q 2023. Estimates for 4Q 2023 put GDP between 2.1%-2.2%.

At 2 PM ET, the Fed will publish its latest anecdotal collection of data points from regional Fed banks, which is far better known as the Fed Beige Book. This will give another perspective on the vector and velocity of the economy as well as job creation and inflation.

The U.S. warned ship operators of the growing threat of attacks while navigating the Red Sea region, in the wake of recent attacks on commercial ships sailing through the critical trade route.

Markets

Equities perked up a little yesterday as optimism over fed governor comments lifted spirits, with Consumer Discretionary (0.58%) and Real Estate (0.55%) reacting the most. Remaining sectors posted modest gains except for Industrials and Healthcare which fell 0.24% and 0.51%, respectively while Energy and Financials closed flat. The S&P 500 rose 0.10%, the Dow gained 0.24% and the Nasdaq Composite closed 0.29% higher while the Russell 2000 gave back 0.46%.

In individual names, shares of Farfetch (FTCH) soared 22.81% amid a report that the founder of the luxury fashion site may be looking to take it private. Despite this huge move, the name is still down over 55% year to date through yesterday’s close.

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

Dow Jones Industrial Average: 6.85%
S&P 500: 18.63%
Nasdaq Composite: 36.45%
Russell 2000: 1.79%
Bitcoin (BTC-USD): 127.84%
Ether (ETH-USD): 70.99%
Stocks to Watch

Before U.S. equity markets begin trading today, Construction Partners (ROAD), Dollar Tree (DLTR), Foot Locker (FL), and Petco Health & Wellness (WOOF) will report their latest quarterly results.

Pre-market breadth picked up from yesterday today as 239 names in the S&P 500 have traded hands so far this morning with 195 gainers and 44 decliners. Shares of NetApp Inc (NTAP) are in high demand as traders are reacting to a positive earnings release (more below) while Las Vegas Sands (LVS) is coming under pressure this morning after it was announced that a top shareholder would be selling over $2 billion is company stock to finance their acquisition of part of the Dallas Mavericks NBA basketball team.

Shares of Workday (WDAY) surged after the company’s quarterly results topped estimates and the back office software company raised its full-year sales guidance. For FY2024, the company now expects subscription revenue to be $6.6 billion, up from a previous view of $6.57-$6.59 billion.

NetApp’s shares were also moving higher after the company delivered a beat and raise quarter. For its current quarter, the company anticipates adjusted EPS in the range of $1.64-$1.74, well ahead of the $1.53 consensus. While NetApp expects FY2024 sales to decline 2% YoY to ~$6.23 billion, that is ahead of the market consensus of $6.14 billion. The company’s 2024 adjusted EPS forecast calls for $6.05-$6.25, head and shoulders above the $5.73 consensus.

Shares of Okta’s (OKTA) were under pressure after the company revealed that hackers stole information on all users of its customer support system in a network breach two months ago. The company has notified customers of the increased security risk of phishing and social engineering, pushed new security features to its platforms, and provided recommendations to defend against targeted attacks. Okta is working with a digital forensics firm for the investigation.

Jabil (JBL) shares were under pressure after the company cut its 2024 revenue to $31 billion, down 7% from the midpoint of its prior guidance issued on September 28. The company cited softening demand and inventory corrections as the driving force behind the revised outlook. Current quarter revenue is now expected to be in the range of $8.3-$8.4 billion compared to its prior guidance of $8.4-$9.0 billion.

At a company town hall, Disney (DIS) CEO Bob Iger told staff that next year will be about building a “modern version” of the company, and said no decisions were made regarding major asset sales. In discussing the company’s recent box office performance, Iger reiterated that the focus is now on quality, not quantity.

US Steel (X) announced Tuesday it will idle indefinitely the last remaining operating blast furnace at its Granite City Works in Illinois “to help ensure melt capacity is balanced with our order book.” The company also filed a layoff notice indicating to 1,000 employees it now expects the closure will continue longer, with changes taking effect as soon as January 28.

Shares of Micron Technology (MU) traded off following word from the company that its operating expenses for the current quarter will be around $990 million compared to its prior expectation of $885-$915 million. That overshadowed Micron tweaking its revenue outlook for the quarter to $4.7 billion, compared with its previous estimate of $4.4 billion, plus or minus $200 million.

The Wall Street Journal reports Apple (AAPL) will end its consumer-finance partnership with Goldman Sachs (GS) and has proposed exiting its credit card and savings-account contract with Goldman in the next 12-15 months. Suitors for the Apple relationship are being sought, with reports naming American Express (AXP) and Synchrony Financial (SYF) as potential candidates.

General Motors (GM) is scheduled to update analysts on the state of the automaker’s business and financial forecasts. Other key topics are likely to include its new UAW contract and the outlook for the Cruise robo-taxi unit.

IPOs

Readers who want to dig deeper into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.

After Today’s Market Close

Credo Technology (CRDO), Five Below (FIVE), Okta (OKTA), PVH (PBH), Salesforce (CRM), Snowflake (SNOW), and Victoria’s Secret (VSCO) are slated to report their 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

Thursday, November 30

China: NBS Manufacturing & Non-Manufacturing PMI – November
Germany: Retail Sales – October
Eurozone: Inflation Rate (Flash) – November
US: Weekly Initial & Continuing Jobless Claims
US: Chicago PMI – November
US: Personal Income & Spending – October
US: PCE Price Index – October
US: Pending Home Sales – October
US: Weekly EIA Natural Gas Inventories

Friday, December 1

Japan: Jibun Bank Manufacturing PMI (Final) – November
China: Caixin Manufacturing PMI – November
Eurozone: HCOB Manufacturing PMI (Final) – November
UK: S&P/CIPS Manufacturing PMI (Final) – November
US: S&P Global Manufacturing PMI (Final) – November
US: ISM Manufacturing Index – November
US: Construction Spending – October
Thought for the Day

“Do what you say you’re going to do. And try to do it a little better than you said you would.” ~ Jimm Dean

Disclosures

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

Original: Earnings Feed: Daily Markets: Fed’s Waller Whets Market Expectations; Powell on Deck