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Stocks Jump, Oil Surges, Earnings on Tap, Squid Game Enthralls - 5 Things You Must Know

Chicago Business Journal 14 October, 2021 - 05:08am

U.S. equity futures powered higher Thursday, while the dollar eased and Treasury yields fell, as investors appeared to shrug-off accelerating inflation signals, as well as a hawkish Federal Reserve, ahead of a busy slate of bank and bluechip earnings.

A record high reading for factory gate inflation in China September, which followed surprisingly solid export data the previous day, suggests price pressure will ripple through the global supply chain over the coming months. 

Alongside yesterday's faster-than-expected reading for September inflation in the United States, which returned to a 13-year high, and minutes detailing the Fed's aim of tapering the pace of its $120 billion in monthly bond purchases later this year, and investors now how a much-clearer picture of both the macroeconomic backdrop and the central bank's likely reaction.

Still, with a series of big ticket earnings expected before the start of trading Thursday -- including Dow components UnitedHealth Group  (UNH) - Get UnitedHealth Group Incorporated Report and Walgreens Boots  (WBA) - Get Walgreens Boots Alliance Inc Report, as well as Citigroup  (C) - Get Citigroup Inc. Report, Morgan Stanley  (MS) - Get Morgan Stanley (MS) Report and Wells Fargo WFC -- and a key reading of September retail sales slated for tomorrow, stocks are looking at a solid start to the Thursday session.

Futures contracts tied to the Dow Jones Industrial Average are indicating a 190 point opening bell gain ahead while the broader S&P 500 is priced for a 28 point move to the upside. Nasdaq Composite futures, meanwhile, are set for a 185 point gain as benchmark 10-year note yields eased to 1.533% in overnight trading and Apple  (AAPL) - Get Apple Inc. (AAPL) Report posts a 0.8% rebound in pre-market trading. 

Global oil prices moved back towards the highest levels in seven years Thursday, adding to inflationary pressures in major economies around the world, as the International Energy Agency warned that power crises in Europe and Asia would boost crude demand through the end of the year.

 "Record coal and gas prices as well as rolling blackouts are prompting the power sector and energy-intensive industries to turn to oil to keep the lights on and operations humming," the Paris-based group said in its monthly energy market report. 

"Higher energy prices are also adding to inflationary pressures that, along with power outages, could lead to lower industrial activity and a slowdown in the economic recovery." the report added.

WTI futures for November delivery $1.03 higher from last night's close to start the session at $81.47 per barrel ahead of Energy Department stockpile data at 10:30 am Eastern time, while Brent contracts for December, the global pricing benchmark, were up $1.09 at $84.27 per barrel.

The National Institutes of Health published a study late Wednesday that showed patients who first received COVID vaccine shot from Johnson & Johnson  (JNJ) - Get Johnson & Johnson (JNJ) Report  had a better immune response from boosters made by Pfizer  (PFE) - Get Pfizer Inc. Report or Moderna  (MRNA) - Get Moderna, Inc. Report

If the FDA concludes that mixing vaccine doses is both safe and more-effective in generating immune responses, it could opt to approve Moderna's request while seeking more information from Johnson & Johnson.

Johnson & Johnson shares were marked 0.56% higher in pre-market trading Thursday to indicate an opening bell price of $160.09. Moderna shares, meanwhile, jumped 2.4% to $329.30 each.

 Citigroup C and Bank of America  (BAC) - Get Bank of America Corp Report highlight a busy earnings slate Thursday, with Dow components UnitedHealth and Walgreens Boots added to the mix.

JPMorgan  (JPM) - Get JPMorgan Chase & Co. (JPM) Report set the tone for the banking sector yesterday with a stronger-than-expected third quarter earnings report built on a surge in deal-making fees, while Delta Air Lines disappointed with a warning that rising fuel costs will trim current-quarter profits.

Wells Fargo  (WFC) - Get Wells Fargo & Company Report, Morgan Stanley  (MS) - Get Morgan Stanley (MS) Report and US Bancorp  (USB) - Get U.S. Bancorp Report are also expected to report before the opening bell

Collective S&P 500 profits are expected to rise 29.6% from last year to around $413.8 billion, according to forecasts from Refinitiv,. The energy sector is expected to lead gains over Q3, with profits rising by nearly 1500% from last year to around $20.5 billion.

Rising input costs, a tight labor market and weakening consumer demand are likely to hit profit forecasts across all sectors, however, leading to a weaker-than-expected series of outlooks from bluechip comapnies over the coming weeks, with the overall earnings growth rate slowing to around 22.2% over the fourth quarter

Netflix  (NFLX) - Get Netflix, Inc. (NFLX) Report said late Wednesday that 'Squid Game', a hyper-violent dystopian survival drama made by producers in Korea, has had the streaming group's most successful debut.

'Squid Game' has drawn 111 million viewers over its first month, Netflix said, passing the previous record of 82 million set by the U.K.-made Regency era drama Bridgerton.

"The strong second half content slate – highlighted by Squid Game – has reinvigorated the stock and near-term subscriber optimism," said BMO Capital Markets analyst Daniel Salmon ahead of next week's third quarter earnings. "We think risk/reward tilts to the upside still, but we are moving the stock a notch down our pecking order (of FAANG stocks) owing to stock price performance."  

Netflix shares were marked 0.7% higher in pre-market trading Thursday to indicate an opening bell price of $634.06 each. 

Stocks Jump, Oil Surges, Earnings on Tap, Squid Game Enthralls - 5 Things You Must Know

Barron's 14 October, 2021 - 05:08am

U.S. equity futures powered higher Thursday, while the dollar eased and Treasury yields fell, as investors appeared to shrug-off accelerating inflation signals, as well as a hawkish Federal Reserve, ahead of a busy slate of bank and bluechip earnings.

A record high reading for factory gate inflation in China September, which followed surprisingly solid export data the previous day, suggests price pressure will ripple through the global supply chain over the coming months. 

Alongside yesterday's faster-than-expected reading for September inflation in the United States, which returned to a 13-year high, and minutes detailing the Fed's aim of tapering the pace of its $120 billion in monthly bond purchases later this year, and investors now how a much-clearer picture of both the macroeconomic backdrop and the central bank's likely reaction.

Still, with a series of big ticket earnings expected before the start of trading Thursday -- including Dow components UnitedHealth Group  (UNH) - Get UnitedHealth Group Incorporated Report and Walgreens Boots  (WBA) - Get Walgreens Boots Alliance Inc Report, as well as Citigroup  (C) - Get Citigroup Inc. Report, Morgan Stanley  (MS) - Get Morgan Stanley (MS) Report and Wells Fargo WFC -- and a key reading of September retail sales slated for tomorrow, stocks are looking at a solid start to the Thursday session.

Futures contracts tied to the Dow Jones Industrial Average are indicating a 190 point opening bell gain ahead while the broader S&P 500 is priced for a 28 point move to the upside. Nasdaq Composite futures, meanwhile, are set for a 185 point gain as benchmark 10-year note yields eased to 1.533% in overnight trading and Apple  (AAPL) - Get Apple Inc. (AAPL) Report posts a 0.8% rebound in pre-market trading. 

Global oil prices moved back towards the highest levels in seven years Thursday, adding to inflationary pressures in major economies around the world, as the International Energy Agency warned that power crises in Europe and Asia would boost crude demand through the end of the year.

 "Record coal and gas prices as well as rolling blackouts are prompting the power sector and energy-intensive industries to turn to oil to keep the lights on and operations humming," the Paris-based group said in its monthly energy market report. 

"Higher energy prices are also adding to inflationary pressures that, along with power outages, could lead to lower industrial activity and a slowdown in the economic recovery." the report added.

WTI futures for November delivery $1.03 higher from last night's close to start the session at $81.47 per barrel ahead of Energy Department stockpile data at 10:30 am Eastern time, while Brent contracts for December, the global pricing benchmark, were up $1.09 at $84.27 per barrel.

The National Institutes of Health published a study late Wednesday that showed patients who first received COVID vaccine shot from Johnson & Johnson  (JNJ) - Get Johnson & Johnson (JNJ) Report  had a better immune response from boosters made by Pfizer  (PFE) - Get Pfizer Inc. Report or Moderna  (MRNA) - Get Moderna, Inc. Report

If the FDA concludes that mixing vaccine doses is both safe and more-effective in generating immune responses, it could opt to approve Moderna's request while seeking more information from Johnson & Johnson.

Johnson & Johnson shares were marked 0.56% higher in pre-market trading Thursday to indicate an opening bell price of $160.09. Moderna shares, meanwhile, jumped 2.4% to $329.30 each.

 Citigroup C and Bank of America  (BAC) - Get Bank of America Corp Report highlight a busy earnings slate Thursday, with Dow components UnitedHealth and Walgreens Boots added to the mix.

JPMorgan  (JPM) - Get JPMorgan Chase & Co. (JPM) Report set the tone for the banking sector yesterday with a stronger-than-expected third quarter earnings report built on a surge in deal-making fees, while Delta Air Lines disappointed with a warning that rising fuel costs will trim current-quarter profits.

Wells Fargo  (WFC) - Get Wells Fargo & Company Report, Morgan Stanley  (MS) - Get Morgan Stanley (MS) Report and US Bancorp  (USB) - Get U.S. Bancorp Report are also expected to report before the opening bell

Collective S&P 500 profits are expected to rise 29.6% from last year to around $413.8 billion, according to forecasts from Refinitiv,. The energy sector is expected to lead gains over Q3, with profits rising by nearly 1500% from last year to around $20.5 billion.

Rising input costs, a tight labor market and weakening consumer demand are likely to hit profit forecasts across all sectors, however, leading to a weaker-than-expected series of outlooks from bluechip comapnies over the coming weeks, with the overall earnings growth rate slowing to around 22.2% over the fourth quarter

Netflix  (NFLX) - Get Netflix, Inc. (NFLX) Report said late Wednesday that 'Squid Game', a hyper-violent dystopian survival drama made by producers in Korea, has had the streaming group's most successful debut.

'Squid Game' has drawn 111 million viewers over its first month, Netflix said, passing the previous record of 82 million set by the U.K.-made Regency era drama Bridgerton.

"The strong second half content slate – highlighted by Squid Game – has reinvigorated the stock and near-term subscriber optimism," said BMO Capital Markets analyst Daniel Salmon ahead of next week's third quarter earnings. "We think risk/reward tilts to the upside still, but we are moving the stock a notch down our pecking order (of FAANG stocks) owing to stock price performance."  

Netflix shares were marked 0.7% higher in pre-market trading Thursday to indicate an opening bell price of $634.06 each. 

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