Benzinga - by Shanthi Rexaline, Benzinga Editor.
The see-sawing sentiment continues as index futures pull back ahead of the all-important rate decision from the Federal Reserve. Some negative earnings reports from companies, including Advanced Micro Devices, Inc. (NASDAQ:AMD) and Yum China Holdings, Inc. (NYSE:YUMC) could set off concerns about corporate profit growth.
Ahead of the Fed decision, traders get to digest a host of first-tier data on the job market and manufacturing sector. The spotlight is likely to be on the monetary policy statement of the Federal Open Market Committee and the press briefing by Chair Jerome Powell. Any hint at a timeframe for a reversal in the rate hikes could prove bullish for the market, although the chances of such an allusion are very remote, given the strength of some segments of the economy and the still-elevated inflationary pressure.
Cues From Tuesday's Trading
Stocks rebounded from the weakness seen in Tuesday’s morning session before beginning to reverse course and move higher by the mid-session. Mixed economic data and earnings and apprehensions ahead of the Fed decision all served to keep sentiment in check.The Nasdaq Composite is now higher for a third straight session, while the S&P 500 Index and the Dow Industrials have gained for two consecutive sessions.
The buying interest, though muted, was broad-based, led by real estate, IT services, and financial stocks.
US Index Performance On Tuesday
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +0.48% | 12,851.24 |
| S&P 500 Index | +0.65% | 4,193.80 |
| Dow Industrials | +0.38% | 33,052.87 |
| Russell 2000 | +0.91% | 1,662.28 |
Notwithstanding Tuesday’s gains, the Nasdaq Composite, S&P 500, and the Dow Industrials fell 2.8%, 2.2% and 1.4%, respectively for October. The averages have now recorded three straight monthly losses.
Analyst Color
Stocks declining in August, September, and October is a rare event, said Carson Group’s Ryan Detrick. The analyst sees a silver lining in the cloud.“But the good news is November has been higher all 5 times. December does fairly well also,” he said.
Stocks down in Aug, Sept, and Oct?Pretty rare, but the good news is November has been higher all 5 times. December does fairly well also. pic.twitter.com/PgvpGc1x1X
— Ryan Detrick, CMT (@RyanDetrick) October 31, 2023
Futures Today
Futures Performance On Wednesday| Futures | Performance (+/-) |
| Nasdaq 100 | -0.33% |
| S&P 500 | -0.34% |
| Dow | -0.27% |
| R2K | -0.66% |
In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) dipped 0.28% to $417.04 and the Invesco QQQ ETF (NASDAQ:QQQ) fell 0.30% to $349.81, according to Benzinga Pro data.
Upcoming Economic Data
ADP is scheduled to release its private payroll report for October at 8:15 a.m. EDT. Economists, on average, estimate a private payroll gain of 150,000 for October compared to the September rise of 89,000.The Treasury is expected to release its quarterly funding statement at 8:30 a.m. EDT.
The Labor Department is due to release the results of its Job Opening and Labor Turnover survey at 10 a.m. EDT. The consensus estimate calls for the job openings to come in at 9.250 million in September, down from 9.610 million in the previous month.
The Institute of Supply Management will release the results of its manufacturing survey for September at 10 a.m. EDT. Economists, on average, expect the manufacturing purchasing managers’ index to come in at 50, up from 49.8 in August.
The Commerce Department is due to release its construction spending report for September at 10 a.m. EDT. Construction spending may have risen 0.4% month-over-month in September, slightly slower than October’s 0.5% increase.
The Energy Information Administration will release its weekly petroleum status report at 10:30 a.m. EDT.
The Fed will announce its rate decision at 2 p.m. through the release of the post-meeting monetary policy statement. The futures market has priced in a 97.1% probability of the central bank leaving rates unchanged at 5.25%-5.50%, marking a 22-year high. The market participants will closely watch any potential tweaks to the statement and Powell’s commentary in the post-meeting press conference.
See also: Futures Vs. Options
Stocks In Focus
- Yum China fell over 12% in premarket trading after the company reported downbeat third-quarter results and hinted at softening demand.
- AMD declined about 2% as traders reacted to the company’s lackluster guidance.
- Paycom Software, Inc. (NASDAQ:PAYC) slumped about 37% following its quarterly results.
- WeWork Inc. (NYSE:WE) plunges over 32% on reports of bankruptcy filing by the company.
- Bausch + Lomb Corporation (NYSE:BLCO), Brinker International, Inc. (NYSE:EAT), CVS Health Corporation (NYSE:CVS), DuPont de Nemours, Inc. (NYSE:DD), GlaxoSmithKline plc (NYSE:GSK), Humana, Inc. (NYSE:HUM), The Kraft Heinz Company (NYSE:KHC), Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH), SunPower Corporation (NASDAQ:SPWR) and Yum! Brands, Inc. (NYSE:YUM) are among the companies due to release their quarterly results ahead of the market opening.
- Those reporting after the close are Avis Budget Group, Inc. (NASDAQ:CAR), Exact Sciences Corporation (NASDAQ:EXAS), Electronic Arts Inc. (NASDAQ:EA), The Clorox Company (NYSE:CLX), Etsy, Inc. (NASDAQ:ETSY), Marathon Oil Corporation (NYSE:MRO), MicroStrategy Incorporated (NASDAQ:MSTR), PayPal Holdings, Inc. (NASDAQ:PYPL), Qualcomm, Inc. (NASDAQ:QCOM), Qorvo, Inc. (NASDAQ:QRVO) and Roku, Inc. (NASDAQ:ROKU).
Commodities, Bonds, Other Global Equity Markets
Crude oil futures climbed 1.48% to $82.22 in early European session on Wednesday following Tuesday's 1.57% retreat.The benchmark 10-year Treasury note rose 0.03 percentage points to 4.905% on Wednesday.
Major Asian markets ended mixed on Wednesday, with the Japanese market advancing strongly and the Australian. New Zealand and South Korean markets also recorded noteworthy gains. Chinese and Hong Kong markets showed a lackluster sentiment after the Caixin manufacturing PMI for China confirmed the contraction in the manufacturing activity in China.
European stocks showed tentativeness by late-morning trading on Wednesday.
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