Texas markets

Daily Markets: Markets Rise on Global Rate Hikes

The big picture today

Asia-Pacific stock indices ended today’s session ahead as the Japanese Nikkei gained 0.53%, Australia’s ASX All Ordinaries rose 0.76%, China’s Shanghai Composite rose rose 0.82% and the Indian Sensex gained 2.31%. Hong Kong’s Hang Seng closed up 2.69% on a broad rally led by non-energy minerals and health-tech names. South Korean markets are closed today, marking the Chuseok holiday; in Taiwan, which is also closed, it is known as the Mid-Autumn Festival, both of which are similar to the Thanksgiving holiday in the United States, but with less turkey and football. At midday, European equity indices are up across the board and US futures point to a healthy open later this morning.

As we wrap up the week, we have a rather modest number of new economic data points, earnings, and keynote speakers from the Fed today. Following yesterday’s 75 basis point rate hike by the European Central Bank and Fed Chairman Powell reminding markets that the Fed is committed to restoring price stability and will will hold there until the job is done, we are ready for another day of market digestion. This will include the increasing number of companies issuing lower forecasts this week and with another round of investor conferences scheduled for next week, this trend is likely to continue. The start of next week will also bring the latest consumer and producer price indices and the monthly retail sales report for the United States – waiting for these reports could cause traders to take more positions. defensive as we wrap up this shortened vacation week.

Data download

International economy

China’s annual inflation rate rose 2.5% in August, well below market forecasts of 2.8% and July’s two-year high of 2.7%. MoM’s 0.1% drop was fueled by new Covid restrictions in some cities and falling food prices. China’s producer price inflation eased to an 18-month low of 2.3% yoy in August, from 4.2% in July and well below market forecast of 3.1 %. Chinese banks extended 1.25 trillion yuan in new yuan loans in August, significantly more than July’s 0.68 trillion yuan, but still remained well below the expected figure of 1.48 trillion yuan.

Domestical economy

At 10 a.m. ET, wholesale inventory data for July will be released and the overall figure is expected to rise 0.8% month-on-month from June’s 1.9% gain.

Markets

Markets continued to rally even in the face of central banks raising rates as 75 basis points is the new 25 basis point rate hike; in other words, quite aggressively, with plans for further increases to come. Interestingly, the Dow, S&P 500 and Nasdaq Composite all rose around 0.60% while small caps rose 0.81% with the Russell 2000 leading the way. Utilities, consumer staples and communication services were the only sectors to lose ground, but not significantly. Given the Fed’s determination to fight inflation and Fed Chairman Powell’s comments yesterday, we’ll have to see what the September meeting produces before we get too comfortable with this week’s rally.

Here’s how the major market indicators stack up since the start of the year:

  • Dow Jones Industrial Average: -12.56%
  • S&P 500: -15.95%
  • Nasdaq compound: -24.18%
  • Russell 2000: -17.74%
  • Bitcoin (USD-BTC): -58.35%
  • Ether (ETH-USD): -55.63%

Stocks to Watch

Prior to the start of trading for stocks listed in the United States, ABM Industries (AMB), Ideanomics (IDEX), and Kroger (KR) will be among the companies releasing their latest quarterly results and forecasts.

Despite the announcement of stronger than expected results for its July quarter, HR (HR) issued a lower guidance for the current quarter with revenue down 15%-18% year on year to $825-855 million from the consensus of $899 million. The company expects “continued easing in its business trends through the remainder of fiscal 2022 due to continued weakness in the housing market over the coming quarters and possibly longer due to rate hikes.” interest rates provided by the Federal Reserve.

Retailer Zumiez (ZUMZ) missed July quarter earnings and EPS expectations due to continued pressures on discretionary consumer spending. The company issued a lower guidance for the current quarter and shared that it is “making adjustments to our merchandise assortments and managing expenses to improve near-term results.”

DocuSign (DOCU) reported July quarter EPS of $0.44 per share on revenue that rose 21.6% year-on-year to $622.18 million, beating consensus of $602.25 million. Billings for the quarter rose 9% year-over-year to $647.7 million, well ahead of the company’s forecast of $599-609 million. For the current quarter and its 2023 fiscal year, Docusign issued guidance that aligned with consensus expectations.

July quarter results for a cybersecurity company Z-scale (ZS) beat consensus expectations and the company issued an upward guidance for its October quarter with EPS of $0.26 versus consensus of $0.22 with revenue between $339 million and $341 million compared to the consensus of $326 million. During the July quarter, the company’s calculated billings increased 57% year-over-year to $520.4 million, while its deferred revenue increased 62% year-over-year to $1.02 billion. dollars.

The Hershey Company (HSY) will spend $90 million to open two new production lines at a Mexican plant in the northern border state of Nuevo Leon, which is expected to increase production by 25%.

Tesla (TSLA) is would have is seeking to establish a lithium refinery on the Gulf Coast of Texas in an effort to ensure a steady supply of battery components amid growing demand for electric vehicles.

IPOs

As of now, no IPO is expected to be priced this week. Readers who want to dig deeper into the schedule of upcoming IPOs should visit Nasdaq’s Latest and Upcoming IPOs page.

After today’s market close

As we close out this shortened trading week, no company is expected to report quarterly results after the stock trading halted today. Those interested in learning more about which companies release their reports when head to the Nasdaq earnings calendar.

on the horizon

monday september 12

  • United Kingdom: construction production, industrial production, manufacturing production – July

tuesday september 13

  • Japan: producer price index – August
  • United Kingdom: evolution of average incomes and employment – ​​July
  • Germany: consumer price index – August
  • Germany: Economic Sentiment and Current ZEW Conditions – September
  • United States: NFIB Small Business Index – August
  • United States: OPEC report – August
  • United States: Consumer Price Index – August
  • United States: Treasury budget – August

Wednesday September 14

  • Japan: Basic machine orders – July
  • United Kingdom: consumer price index, producer price index – August
  • Euro zone: Industrial production – July
  • US: Weekly MBA Mortgage Applications
  • United States: producer price index – August
  • United States: EIA Weekly Crude Oil Inventories

Thursday September 15

  • Japan: Import/Export – August
  • Euro zone: Labor cost index – 2nd quarter 2022
  • United Kingdom: Bank of England monetary policy meeting
  • United States: Initial and Continuing Weekly Unemployment Claims
  • United States: Retail sales – August
  • United States: Empire State Manufacturing Index – August
  • United States: Philly Fed Index – August
  • United States: import/export prices – August
  • United States: industrial production and manufacturing capacity – August
  • United States: EIA Weekly Natural Gas Inventories

friday september 16

  • China: industrial production, retail sales – August
  • United Kingdom: Retail sales – August
  • Euro zone: Consumer price index – August
  • United States: University of Michigan Consumer Confidence Index (preliminary) – August

Thought of the day

“Even the smart investor will probably need considerable willpower to not follow the crowd.” ~Benjamin Graham

Disclosures

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.