Stock futures traded lower Monday after the S&P 500 posted its biggest weekly gain in almost five months on the back of easing inflation data.
Dow Jones Industrial Average futures fell 49 points, or 0.2%. S&P 500 futures declined 0.3%, and Nasdaq 100 futures slid by 0.5%.
The S&P 500 rallied 5.9% last week for its best week since June. Investors cheered a lighter-than-expected inflation reading, betting that the Federal Reserve would soon slow its aggressive tightening campaign.
“A notable shift has occurred in the market, with investors increasingly risk-on across asset classes,” said Mark Hackett, Nationwide’s chief of investment research. “Technical indicators have improved dramatically, with investor sentiment, momentum, breadth, and risk factors all showing notable improvement.”
The tech-heavy Nasdaq Composite gained 8.1% last week for its best week since March, while the blue-chip Dow advanced 4.2%.
The Cboe Volatility Index, known as Wall Street’s fear gauge or the VIX, fell 1 point to 22.5, hitting the lowest level since August. The VIX, which tracks the 30-day implied volatility of the S&P 500, had traded above the 30 point threshold for most of October.
Still, the Federal Reserve has given little signal that it could deviate from its tightening path anytime soon. Fed Governor Christopher Waller said Sunday that, “We’re at a point we can start thinking maybe of going to a slower pace.” But, “we’re not softening. … Quit paying attention to the pace and start paying attention to where the endpoint is going to be. Until we get inflation down, that endpoint is still a ways out there.”
Investors also digested news on the politics front over the weekend. Democrats will keep control of the Senate in the 2022 midterm elections, NBC News projected. The party will hold at least 50 seats after Sens. Mark Kelly of Arizona and Catherine Cortez Masto of Nevada held off challenges.
Meanwhile, the third-quarter earnings season is set to continue, with a heavy emphasis on retail. Big retailers Walmart, Home Depot, Target, Lowe’s, Macy’s and Kohl’s are all slated to post numbers this week.
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THIS MORNING’S STOCK NEWS MOVERS:
Hasbro (HAS) – The toy maker’s stock slid 5.2% in the premarket following a double-downgrade to “underperform” from “buy” at Bank of America. The move comes after BofA conducted what it calls a “deep dive” on Hasbro’s “Magic: The Gathering” trading card game business. BofA said Hasbro has been overprinting cards and destroying the long-term value of the business.
STOCK SYMBOLS: HAS
Oatly (OTLY) – The maker of oat-based drinks saw its stock tumble 11.8% in the premarket after it reported a larger-than-expected quarterly loss and revenue that fell short of consensus. Oatly said its results were hurt by a number of factors including China Covid restrictions, production challenges and a stronger US dollar.
STOCK SYMBOLS: OTLY
Advanced Micro Devices (AMD) – The chip maker’s stock rose 3.2% in the premarket after receiving upgrades at both Baird and UBS. The firms cited positive industry cyclical trends as well as strong demand by data center equipment manufacturers for AMD’s Genoa chip.
STOCK SYMBOLS: AMD
Amazon.com (AMZN) – Amazon fell 1.7% in premarket trading after Bank of America removed the stock from its “US 1” list, although it maintained a “buy” rating.
STOCK SYMBOLS: AMZN
Teva Pharmaceutical (TEVA) – Teva was downgraded to “underweight” from “neutral” at J.P. Morgan Securities, which cited continuing growth challenges for the drugmaker. Teva fell 2.3% in premarket action.
STOCK SYMBOLS: TEVA
Eli Lilly (LLY), Biogen (BIIB) – Rival Roche’s experimental Alzheimer’s treatment did not meet its primary goal in studies. Both Lilly and Biogen also have Alzheimer’s drugs in their pipelines, and Biogen had said in September that its experimental treatment had slowed the progress of the disease by 27%. Lilly added 1.5% in premarket trading, while Biogen rallied 5.8%.
STOCK SYMBOLS: LLY
STOCK SYMBOLS: BIIB
Tyson Foods (TSN) – The beef and poultry producer reported quarterly earnings of $1.63 per share, missing consensus estimates by 10 cents a share. Revenue came in above Street forecasts. Tyson added 1% in premarket action.
STOCK SYMBOLS: TSN
Virgin Galactic (SPCE) – In a Securities and Exchange Commission filing, Virgin said a court is giving plaintiffs until Nov. 28 to file an amended class action suit against the company. The original suit filed in May 2021 alleged current and former officers and directors made misleading statements about Virgin’s commercial space flight program, charges which Virgin says are without merit. Virgin shares lost 1% in the premarket.
STOCK SYMBOLS: SPCE
FULL DISCLOSURE:
/u/bigbear0083 has no positions in any stocks mentioned. Reddit, moderators, and the author do not advise making investment decisions based on discussion in these posts. Analysis is not subject to validation and users take action at their own risk.
DISCUSS!
What’s on everyone’s radar for today’s trading day ahead here at r/stocks?
I hope you all have an excellent trading day ahead today on this Monday, November 14th, 2022! 🙂
