December S&P 500 E-Mini futures (ESZ26) are up +0.14% this morning, buoyed by a slight drop in oil prices, while investors await crucial U.S. producer inflation data and further comments from Federal Reserve officials.
Meanwhile, December Nasdaq 100 E-Mini futures (NQZ26) are edging higher as Nvidia shares staged a modest rebound in pre-market trading and other chipmakers and AI infrastructure stocks steadied following a tumultuous week for the AI trade that saw Jensen Huang ousted from Nvidia.
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WTI crude reversed earlier gains and fell -0.4% on Friday after the International Energy Agency said the oil market is set to return to a surplus this quarter for the first time since the U.S.-Iran war began. Treasuries were mixed.
In yesterday’s trading session, Wall Street’s major indices ended in the red, pressured by a leadership crisis at Nvidia and a jump in Treasury yields. Nvidia (NVDA) sank over -4% and was the top percentage loser in the Dow after the company’s board announced the immediate resignation of CEO Jensen Huang following revelations of two extramarital affairs, one with a suspected Chinese spy and the other with an employee. Also, Nebius Group (NBIS) cratered more than -16% and was the top percentage loser in the Nasdaq 100 after the AI computing provider lowered its annual revenue outlook. In addition, Super Micro Computer (SMCI) plunged over -11% after Bloomberg reported that the Justice Department is investigating whether Alice Huang has ties to efforts to smuggle the company’s products into China. On the bullish side, Advanced Micro Devices (AMD) climbed over +5% to lead gainers in the S&P 500 and Nasdaq 100, and Broadcom (AVGO) rose more than +5% amid expectations that the chipmakers could capture market share from Nvidia.
Economic data released on Thursday were negative for equities. The number of Americans filing initial jobless claims rose by 9K last week to 200K, compared with expectations of 194K. Separately, U.S. existing home sales slumped -5.5% m/m to a seasonally adjusted annual rate of 3.75 million units in October, the lowest since 2010 and below expectations of 3.89 million units.
Investors also digested hawkish remarks from Fed officials. Cleveland Fed President Beth Hammack said on Thursday that inflation is heading in the “wrong direction” and that higher interest rates are needed to bring it under control. Also, Chicago Fed President Austan Goolsbee said the central bank must act to curb inflation before the economy overheats, warning that such a scenario would pose a greater challenge for policymakers. In addition, San Francisco Fed President Mary Daly said further interest rate hikes will likely be necessary to bring inflation down, adding that businesses are increasingly considering raising prices. Finally, New York Fed President John Williams said that inflation remains elevated and that policymakers need to take further action to curb price pressures.
U.S. rate futures are currently pricing in an 87.4% chance of a 25-basis-point rate hike and a 12.6% chance of a 50-basis-point rate hike at next month’s FOMC meeting.
Today, all eyes are on the U.S. producer price index, which is set to be released in a couple of hours. Economists forecast that the U.S. October PPI will rise +0.4% m/m and +6.6% y/y, compared with the prior month’s figures of +1.3% m/m and +6.3% y/y. The core PPI, which excludes volatile food and energy costs, is expected to rise +0.3% m/m and +5.0% y/y in October, compared with +0.7% m/m and +5.0% y/y in September.
Market participants will also scrutinize remarks from Fed Vice Chair Philip Jefferson, Fed Vice Chair for Supervision Michelle Bowman, Boston Fed President Susan Collins, Dallas Fed President Lorie Logan, and San Francisco Fed President Mary Daly today.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 5.14%, up +0.02%.
The Euro Stoxx 50 Index is up +0.11% this morning, extending its winning streak to a fifth session, though the rally is showing signs of losing steam. Energy and bank stocks led the gains on Friday. At the same time, luxury stocks slid, weighed down by a drop of more than -4% in Richemont (CFR.Z.IX) after the Cartier owner reported weaker-than-expected FQ2 sales in its jewellery division. Technology stocks also declined as the fallout from Jensen Huang’s departure from Nvidia continued to ripple through the AI trade. The benchmark index was on track to post a strong weekly gain. Eurostat said in an update on Friday that the Eurozone’s gross domestic product growth for the third quarter stood at 0.4%, in line with a preliminary estimate. Separately, final data showed that France’s annual inflation rate picked up to 3.4% in October, while Spain’s annual inflation rate held steady at 4.9%, confirming preliminary estimates. In addition, data showed that the Eurozone’s goods trade deficit shrank in September, providing some respite following a sharp deterioration in the previous month. Meanwhile, Goldman Sachs on Friday raised its 12-month target for the STOXX 600 index to 700 points from 695 points, citing European equities’ potential to benefit the most from easing energy supply pressures and falling energy prices. Elsewhere, Eurozone government bond yields rose on Friday as investors assessed the outlook for interest rate hikes by the European Central Bank. In other corporate news, Wise Plc (WISE.L.EB) climbed over +4% after the company posted a 23% increase in net revenue in the first half of its fiscal year.
France’s CPI, Spain’s CPI, Eurozone’s GDP (second estimate), Eurozone’s Employment Change (preliminary), and Eurozone’s Trade Balance data were released today.
The French October CPI rose +0.4% m/m and +3.4% y/y, in line with expectations.
The Spanish October CPI rose +0.6% m/m and +4.9% y/y, in line with expectations.
Eurozone’s GDP rose +0.4% q/q and +1.3% y/y in the third quarter, in line with expectations.
Eurozone’s Employment Change rose +0.1% q/q and +0.5% y/y in the third quarter, compared with expectations of +0.2% q/q and +0.4% y/y.
Eurozone’s September Trade Balance came in at -10.3 billion euros, weaker than expectations of -4.5 billion euros.
Asian stock markets closed mixed today. China’s Shanghai Composite Index ($CHSC) closed down -0.59%, and Japan’s Nikkei 225 Stock Index ($NKY) closed up +0.53%.
China’s Shanghai Composite Index closed lower today, weighed down by weakness in the technology sector. Semiconductor stocks erased earlier gains and fell on Friday, tracking a similar reversal among their Asian peers as the fallout from Jensen Huang’s exit from Nvidia continued to ripple through the AI trade. Also, a selloff in shares of Chinese AI model developers deepened amid investor concerns that the scandal surrounding Huang could prompt Washington to impose tighter restrictions on chip sales. In addition, shares of Chinese hardware suppliers serving U.S. customers slumped, extending yesterday’s losses. U.S. House Speaker Mike Johnson said on Thursday that support was growing in Congress for restricting chip exports to China following the scandal. “The biggest risk to China's AI industry is that the scandal leads to a tightening of U.S. export controls on advanced chips and chip-making equipment, possibly by the end of this year,” according to Gavekal Dragonomics. Meanwhile, the Shanghai Composite Index notched a modest weekly loss. Elsewhere, The Wall Street Journal reported on Friday that AI startup Moonshot AI is finalizing a corporate restructuring that would clear the way for an initial public offering. Investor attention now turns to China’s economic activity indicators for October, scheduled for release on Monday, which will provide an early glimpse into the health of the world’s second-largest economy after Beijing ramped up efforts to support it in late September. A planned summit between U.S. President Donald Trump and Chinese President Xi Jinping in Shenzhen next week will also attract attention.
Japan’s Nikkei 225 Stock Index closed higher today and posted its largest weekly gain in five months. The Nikkei initially climbed over +1%, buoyed by strong gains in chip-related stocks. The chip rally came as Nasdaq 100 futures rose in early Asian trading, with investors welcoming greater clarity over Nvidia’s leadership following Jensen Huang’s resignation and the appointment of CFO Colette Kress as interim CEO. However, the benchmark later pared its gains as chip stocks lost momentum after Nasdaq 100 futures turned negative in afternoon trading in Asia. Still, strength in food and retail stocks helped the Nikkei finish in positive territory. Meanwhile, Japanese government bonds fell on Friday, tracking the overnight selloff in U.S. Treasuries as traders assessed the outlook for the U.S.-Iran war and the Fed’s rate-hike path. Elsewhere, Japanese Finance Minister Satsuki Katayama renewed her warning against speculative currency moves on Friday after the yen weakened to 160 per dollar, a level widely seen as a potential trigger for intervention. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -4.68% at 34.39.
Pre-Market U.S. Stock Movers
Nvidia (NVDA) rose more than +2% in pre-market trading as dip buyers continued to step in after the stock pared steep losses yesterday following CEO Jensen Huang’s resignation.
Microsoft (MSFT) fell over -2% in pre-market trading amid an hours-long global outage affecting key elements of the Microsoft 365 suite.
Modine Manufacturing (MOD) jumped more than +30% in pre-market trading after Bloomberg reported that Samsung Electronics was in talks to buy the company.
Cryptocurrency-exposed stocks slid in pre-market trading after Bitcoin dropped below $70,000 for the first time since August. Coinbase Global (COIN) was down over -2%, while Strategy (MSTR) and MARA Holdings (MARA) each fell more than -1%.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Friday - November 13th
Twenty One Capital (XXI), Americas Gold and Silver (USAS), Suncrete (RMIX), Sigma Lithium (SGML), SBC Medical Group Holdings (SBC), JAB Acquisition Corp I (ATLQ), Eagle Point Credit Company (ECC), Digi Power X (DGXX), OptimumBank Holdings (OPHC), Kolibri Global Energy (KGEI), Owlet (OWLT).
On the date of publication, Oleksandr Pylypenko did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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