E-mini S&P 500 (December): Settled at 3302.25, up 38.75
E-mini Nasdaq-100 (December): Settled at 11,342.75, up 210
The S&P traded to a low of 3226 overnight, testing unchanged on the year at 3231, before paring losses to near unchanged by the onset of U.S. hours. Risk-assets are experiencing healthy and expected volatility, given the surrounding circumstances. More than one-third of the S&P companies, representing nearly half of its total market cap, reported earnings this week. Although the punch bowl did not disappear, it took a timeout after Coronavirus Aid talks in Washington stalled, and the Senate adjourned ahead of the election. New lockdowns and restrictions are being announced in Europe and the U.S. due to a record rise in Covid-19 cases. Considering all the above and what 2020 has brought to the table ahead of a historical election, is it really all that surprising to see the S&P test unchanged on the year?
Four of the five largest companies in the S&P reported earnings after the bell yesterday. Apple, the largest, is down more than 3% premarket. Although the company topped headline estimates for its fourth quarter, iPhone sales fell short of expectations, down 20.7% YoY. Furthermore, the failure to give guidance for its Q1 certainly left the market underwhelmed. Amazon is down about 1%; although the company crushed expectations, a wide range of guidance and broader market conditions bring the stock in a bit. Facebook has chopped around and is also down about 1% premarket. Despite beating estimates, the company reported a drop in users from the U.S. and Canada. Last but certainly not least, Alphabet was the darling of the dance. The company blew expectations out of the water, led by a surge in advertising revenue growth. The stock is up nearly 10% ahead of the open.
Both Chevron and ExxonMobil are on the earnings calendar this morning. The stocks are holding ground after reporting less of a loss than expected due to cost-cutting initiatives. Additionally, Exxon CEO Woods pointed to protecting the dividend.
Two big movers ahead of the bell are Twitter, down 15% after reporting yesterday, and Under Armour, up 7% after reporting this morning. AbbVie, Honeywell, and Phillips 66 are among others to report this morning.
On the economic calendar, GDP data out of the Eurozone was better than expected. This comes a day removed from ECB President Lagarde signaling more stimulus is coming. Also, on the heels of better German Unemployment and Eurozone Confidence data yesterday. Furthermore, this morning although Eurozone CPI data contracted -0.3% YoY, the MoM reads showed a stable uptick.
Domestically, we look to the Core PCE Index. Chicago PMI is out at 8:45 am CT, and final Michigan Consumer data for October follows at 9:00 am CT.
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