Customized watchlists with full streaming quotes from leading exchanges, such as NASDAQ, NYSE, AMEX, OTC Markets Small-Cap, LSE and more.
Overseas Weakness May Carry Over Onto Wall Street
US Market
The major U.S. index futures are currently pointing to a lower open on Thursday, with stocks likely to see further downside following the pullback seen on Wednesday.
Overseas weakness may carry over onto Wall Street amid concerns about the outlook for global demand amid a renewed surge in Chinese Covid cases.
The recent jump in cases in China has offset recent optimism that the country would soon begin easing Covid restrictions.
Traders may also be expressing worries about the upcoming holiday shopping season after department store chain Kohl’s (KSS) withdrew its full-year guidance.
The withdrawal by Kohl’s comes after a disappointing forecast from Target (TGT) contributed to the weakness on Wall Street on Wednesday.
Stocks moved mostly lower over the course of the trading session on Wednesday, largely offsetting the upward move seen on Tuesday. The tech-heavy Nasdaq showed a particularly steep drop, while the Dow spent much of the session lingering near the unchanged line.
After ending Tuesday’s trading at a nearly two-month closing high, the Nasdaq tumbled 174.52 points or 1.5 percent to 11,183.66. The S&P 500 also slumped 32.94 points or 0.8 percent to 3,958.79.
Meanwhile, the narrower Dow edged down 39.09 points or 0.1 percent to 33,553.83, with strong gains by McDonald’s (MCD) and UnitedHealth (UNH) helping limit the downside for the blue chip index.
The pullback by the broader markets came amid a steep drop by shares of Target (TGT), with the retail giant plunging by 13.1 percent.
Target came under pressure after reporting weaker than expected third quarter earnings and slashing its operating margin forecast for the current quarter.
Traders were also digesting a mixed batch of U.S. economic data, which added to recent uncertainty about the outlook for interest rates.
Before the start of trading, the Commerce Department released a report showing a significant increase in U.S. retail sales in the month of October.
The report showed retail sales surged by 1.3 percent in October after coming in unchanged in September. Economists had expected retail sales to jump by 1.0 percent.
Excluding a sharp increase in sales by motor vehicle and parts dealers, retail sales still shot up by 1.3 percent in October after inching up by 0.1 percent in September. Ex-auto sales were expected to rise by 0.4 percent.
Meanwhile, the Federal Reserve released a separate report unexpectedly showing a modest decrease in U.S. industrial production in the month of October.
The Fed said industrial production edged down by 0.1 percent in October following a revised 0.1 percent uptick in September.
The dip surprised economists, who had expected industrial production to inch up by 0.2 percent compared to the 0.4 percent increase originally reported for the previous month.
The National Association of Home Builders also released a report showing a continued decrease in U.S. homebuilder confidence in the month of November.
The report showed the NAHB/Wells Fargo Housing Market Index declined for the 11th consecutive month, slumping to 33 in November after tumbling to 38 in October. Economists had expected the index to dip to 36.
With the bigger than expected decrease, the index fell to its lowest reading since June 2012, with the exception of the onset of the pandemic in the spring of 2020.
After turning in some of Tuesday’s best performances, semiconductor stocks showed a substantial pullback on the day. The Philadelphia Semiconductor Index plummeted by 4.3 percent after ending the preceding session at its best closing level in well over two months.
Micron Technology (MU) posted a steep loss after the chipmaker said it is scaling back production in response to market conditions.
Computer hardware stocks also saw considerable weakness on the day, resulting in a 3.3 percent plunge by the NYSE Arca Computer Hardware Index.
Significant weakness was also visible among airline stocks, as reflected by the 3.9 percent nosedive by the NYSE Arca Airline Index.
Energy, brokerage and networking stocks also showed notable moves to the downside, while utilities stocks were among the few groups to buck the downtrend.
U.S. Economic Reports
First-time claims for U.S. unemployment benefits edged slightly lower in the week ended November 12th, according to a report released by the Labor Department on Thursday.
The report said initial jobless claims dipped to 222,000, a decrease of 4,000 from the previous week’s revised level of 226,000.
Economists had expected jobless claims to come in unchanged compared to the 225,000 originally reported for the previous week.
Meanwhile, the Labor Department said the less volatile four-week moving average crept up to 221,000, an increase of 2,000 from the previous week’s revised average of 219,000.
A separate report from the Commerce Department showed a notable decrease in new residential construction in the month of October.
The report said housing starts tumbled by 4.2 percent to an annual rate of 1.425 million in October after falling by 1.3 percent to an upwardly revised rate of 1.488 million in September.
Economists had expected housing starts to slump by 2.0 percent to an annual rate of 1.410 million from the 1.439 million originally reported for the previous month.
The Commerce Department said building permits also dove by 2.4 percent to an annual rate of 1.526 million in October after jumping by 1.4 percent to a rate of 1.564 million in September.
Building permits, an indicator of future housing demand, were expected to plunge by 3.3 percent to an annual rate of 1.512 million.
The Philadelphia Federal Reserve also released a report showing regional manufacturing unexpectedly contracted at a faster rate in the month of November.
The Philly Fed said its diffusion index for current activity tumbled to a negative 19.4 in November from a negative 8.7 in October, with a negative reading indicating a contraction in regional manufacturing activity.
The decrease by the Philly Fed index came as a surprise to economists, who had expected the index to inch up to a negative 6.2.
At 9:15 am ET, Federal Reserve Board Governor Michelle Bowman is due to speak virtually before a public meeting of the Financial Literacy and Education Commission.
Cleveland Federal Reserve President Loretta Mester is scheduled to give opening remarks at a hybrid 10th annual financial stability conference hosted by Cleveland Fed and the Office of Financial Research at 9:40 am ET.
At 10:40 am ET, Minneapolis Federal Reserve President Neel Kashkari is due to moderate a panel discussion with Federal Reserve Board Governor Philip Jefferson at the Minneapolis Fed’s Fall 2022 Institute Research Conference.
The Treasury Department is scheduled to announce the details of this month’s auctions of two-year, five-year and seven-year notes at 1 pm ET.
Kashkari is due to participate in a town hall discussion before the Minnesota Chamber of Commerce 2022 Economic Summit: Time for a Bold Agenda at 1:45 pm ET.
Stocks in Focus
Shares of Bath & Body Works (BBWI) are soaring in pre-market trading after the personal goods retailer reported better than expected third quarter results and raised its full-year earnings guidance.
Department store chain Macy’s (M) is also likely to see initial strength after reporting third quarter results that beat analyst estimates and boosting its full-year profit forecast.
Shares of Cisco Systems (CSCO) may also move to the upside after the networking giant reported fiscal first quarter results that exceeded expectations on both the top and bottom lines.
Meanwhile, shares of Kohl’s (KSS) may come under pressure after the department store chain reported better than expected third quarter results but withdrew its full-year guidance.
Europe
European stocks have moved mostly lower on Thursday, as concerns over geopolitical tensions ease and the focus returned to rising numbers of COVID-19 cases in China.
While the French CAC 40 Index has slumped by 1.2 percent, the U.K.’s FTSE 100 Index is down by 0.7 percent and the German DAX Index is down by 0.4 percent.
Spirax-Sarco Engineering shares have slumped in London after the thermal energy and niche pumping specialist backed its full-year guidance for adjusted operating profit, excluding contributions from the recent acquisitions.
Residential homebuilder Crest Nicholson Holdings has also declined. The company said it expects fiscal 2022 adjusted profit before tax to be within previously guided range of 135 million pounds to 140 million pounds.
Investec has also come under pressure. The banking and wealth-management group has unveiled a £350 million share buyback program following a jump in half-year revenues and profits.
Bouygues has also plummeted in Paris. The French construction and media conglomerate confirmed its forecasts for sales and profitability in 2022 after reporting higher sales in the first nine months of the year. However, net profit attributable to the group dropped to 537 million euros from 807 million euros last year.
On the other hand, Grainger has shown a notable move to the upside after it reported 12 percent growth in fiscal year adjusted earnings.
Siemens has also soared after the German engineering and technology group said it expects higher margins from factory automation equipment and software products next year.
Asia
Asian stocks ended mostly lower on Thursday, with worries about China’s ongoing COVID curbs and hawkish remarkets from a slew of Federal Reserve officials keeping investors nervous. Chip stocks were hammered after Micron Technology warned about excess inventories and sluggish demand.
The U.S. dollar gained ground and U.S. 10-year Treasury yields recovered modestly from a six-week low after strong retail sales data released overnight dented hopes for a pause in rate increases.
Gold dipped on dollar strength, while oil extended losses on Chinese demand worries after daily COVID cases surged again in the country.
China’s Shanghai Composite Index slipped 0.2 percent to 3,115.43 as a flare-up in domestic COVID-19 cases spurred concerns over more lockdowns.
In its third-quarter monetary policy report released on Wednesday, China’s central bank pledged to keep liquidity reasonably ample but warned of a rebound in inflation in the future.
Hong Kong’s technology-heavy Hang Seng Index slumped 1.2 percent to 18,045.66 after the Philadelphia Semiconductor Index plunged 4.3 percent on Wednesday.
Japanese shares ended a tad lower after data showed the country’ trade deficit widened more than expected in October.
The Nikkei 225 Index dropped 0.4 percent to 27,930.57, while the broader Topix closed 0.2 percent higher at 1,966.28. Tech stocks led losses, with Advantest, Tokyo Electron and Screen Holdings declining 2-3 percent.
Seoul stocks fell sharply amid waning optimism over a potential reopening in China. The Kospi tumbled 1.4 percent to close at 2,442.90. Samsung Electronics declined 2.1 percent and SK Hynix dove 4.2 percent amid deepening concerns over a global economic downturn.
Meanwhile, Australian markets eked out modest gains after data showed the country’s jobless rate unexpectedly fell in October.
The benchmark S&P ASX 200 Index rose 0.2 percent to 7,135.70 while the broader All Ordinaries Index ended 0.2 percent higher at 7,339.
OZ Minerals shares remained in a trading halt as BHP is rumored to float a sweetened offer for the company.
Webjet soared 10.1 percent after the travel agency said it is on track to exceed pre-pandemic profitability in fiscal 2023.
Commodities
Crude oil futures are tumbling $1.58 to $84.01 a barrel after slumping $1.33 to $85.59 a barrel on Wednesday. Meanwhile, after edging down $1 to $1,775.80 an ounce in the previous session, gold futures are falling $14.70 to $1,761.10 an ounce.
On the currency front, the U.S. dollar is trading at 140.53 yen versus the 139.50 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0319 compared to yesterday’s $1.0395.
