Traders work on the floor of the New York Stock Exchange (NYSE) in New York, November 15, 2022.
Brendan McDermid | Reuters
Stock futures rose early on Wednesday as investors weighed another lighter-than-expected inflation report and looked ahead to retail sales data due out later.
Futures tied to the Dow Jones Industrial Average added 59 points, or about 0.18%. S&P 500 and Nasdaq 100 futures gained 0.16% and 0.19%, respectively.
All the major averages finished the regular trading session higher Tuesday, with the S&P 500 closing up 0.87% and the Dow adding 56.22 points, or 0.17%. The Nasdaq jumped 1.45% and is the only major average on pace to eke out slight gains for the week. The producer price index report, which measures wholesale prices, came in below expectations, which alleviated some of investors’ concerns around inflation.
Chinese technology stocks were among the best performers Tuesday, with the KraneShares CSI China Internet ETF gaining 9.56% for its best daily performance since March 16. Nine out of 11 S&P 500 sectors rose, led to the upside by communication services and information technology. Both health care and materials posted slight losses.
Stocks have staged a solid run following last week’s better-than-feared consumer price index report. The S&P 500 last week posted its best weekly stretch since June and all the major averages are on track to finish the month with gains.
Some investors say a near-term retreat is, however, on the horizon.
“In the short term, the market is very extended and overdue to pull back and digest the recent rally,” said Adam Sarhan, CEO of 50 Park Investments.
Retail sales due out Wednesday could offer another look at consumer behavior amid inflation. Earnings season also continues with reports from Target, Cisco and Nvidia.
UK inflation hits 41-year high of 11.1% as food and energy prices continue to soar
U.K. inflation jumped to a 41-year high of 11.1% in October, exceeding expectations as food, transport and energy prices continued to squeeze households and businesses.
“Indicative modelled consumer price inflation estimates suggest that the CPI rate would have last been higher in October 1981, where the estimate for the annual inflation rate was 11.2%,” the Office for National Statistics said.
On a monthly basis, the CPI rose 2% in October, matching the annual CPI inflation rate between July 2020 and 2021.
– Elliot Smith
European markets mostly lower as geopolitical tensions rise after Poland missile incident
European markets were mostly lower on Wednesday morning as political instability gripped the region after a missile hit Polish territory, raising tensions between Russia and NATO.
The pan-European Stoxx 600 slipped 0.2% below the flatline in early trade, with autos shedding 2% while oil and gas stocks added 0.8%.
– Elliot Smith
CNBC Pro: The Fed ‘pivot’ is dead, says strategist, who shares where to invest right now
Fidelity says the notion that a pivot from the Federal Reserve’s hawkish stance will benefit equities is “dead.”
Salman Ahmed, global head of macro and strategic asset allocation at the investment management firm, said he is concerned about short-term stock performance and suggests investor consider a different asset class instead.
— Ganesh Rao
Tencent to report earnings, reportedly starting new round of job cuts
Chinese tech giant Tencent is due to report third-quarter earnings late in Asia.
The company is expected to see another drop in revenue after posting the first-ever revenue decline in the previous quarter ending in June. A median forecast from Refinitiv predicts a fall of 0.47% to 141.7 billion Chinese yuan ($20 billion).
Separately, sources told Reuters that Tencent is starting a new round of job cuts. The news comes as tech firms around the world announce layoffs.
Tencent shares rose as much as 3% in early trade, and were last up 0.83%, compared with a 0.81% fall in the broader Hang Seng index.
— Abigail Ng, Jihye Lee
JPMorgan lowers its GDP forecasts for China
JPMorgan downgraded its economic forecasts for China in response to developments including a recent surge in Covid cases and a “notable drag on domestic activity,” analysts said in a note.
The investment bank now expects China’s GDP growth for 2022 to come in at 2.9%, down from its previous forecast of 3.1%. In 2023, JPMorgan sees China’s economy growing 4%, compared with an earlier prediction of 4.5%.
October’s retail sales and industrial production data released Tuesday disappointed as global growth slowed and China battled Covid outbreaks.
— Abigail Ng, Michael Bloom
CNBC Pro: These biotech stocks look cheap — and analysts give 2 more than 100% upside
Fundstrat said some biotechnology stocks are worth following and that the sub-sector is currently the strongest within the health industry.
Mark Newton, head of technical strategy at research firm Fundstrat, said the sector is “a key part of the reason why Healthcare likely shows strong 4Q [fourth quarter] outperformance,” according to a Nov. 14 note.
To identify biotech stocks that look cheap and are expected to rally looking ahead, CNBC Pro screened the iShares Biotechnology ETF on FactSet. Here are 8:
— Weizhen Tan
What to expect from October retail sales
Wednesday’s retail sales report will offer another peek at consumer spending habits in the face of stubborn inflation.
The data is expected to show a 1.2% jump in retail sales in October, up from a flat print in September, according to Dow Jones’ estimates. Excluding autos, retail sales are expected to rise 0.6%, compared to a 0.1% gain in September.
— Samantha Subin
Advance Auto Parts falls on earnings miss, disappointing forecast
Shares of Advance Auto Parts tumbled 10% in overnight trading after the company posted mixed results for the recent quarter.
Earnings per share came in 50 cents below Wall Street’s earnings per share estimates, while revenue fell in line with analysts’ expectations. The auto parts retailer also posted a weak EPS outlook for the full year.
— Samantha Subin
Stock futures open lower
Stock futures opened lower in overnight trading Tuesday.
Futures tied to the Dow Jones Industrial Average fell 97 points, or 0.29%. S&P 500 and Nasdaq 100 futures shed 0.34% and 0.32%, respectively.
— Samantha Subin