US Stocks Could Continue Momentum 3rd Day Straight As Earnings Drive Nasdaq, S&P 500 Futures Higher — Netflix, Tesla, Chip-Equipment Stocks In Focus

Zinger Key Points
  • Earnings continue to be salubrious, giving a reason for investors to stay invested in stocks.
  • Analysts are positive about equities delivering positive returns in the intermediate term.

The U.S. index futures point to a higher opening by stocks on Wednesday following the strong runup seen in the previous two sessions.

Tuesday, the major indices gap opened higher but gave back some of the gains over the course of the session before moving broadly sideways in a consolidation move. Traders were reacting to positive earnings from companies such as Goldman Sachs Group, Inc. GS and Lockheed Martin Corporation LMT, mixed economic tidings and a decline in oil prices.

The market witnessed broad-based buying interest, with material, industrial and utility stocks leading the charge. The recent gains have taken the Dow Industrials to a one-month high.

U.S. Indices' Performance On Tuesday
Index Performance (+/-)   Value
Nasdaq Composite +0.90%   10,772.40
S&P 500 Index +1.14%   3,719.98
Dow Industrials +1.12%   30,523.80

Since investors and Fed are scrutinizing key macroeconomic data for clues about the future path of inflation, data will have an outsized influence on stock price movements, Daniel Berkowitz, senior investment officer at Prudent Management Associates said.

“We continue to believe that a broad-based equity allocation should serve as a growth engine for portfolios and will deliver a positive real return over the intermediate term (as has been the case for much of market history)," the market analyst said. He recommends traders adopt a more defensive posture, given the high degree of market uncertainty and abounding risks on the horizon.

Here’s a peek into index futures trading:

U.S. Futures' Performance On Wednesday During Premarket Session
Index Performance (+/-)  
Nasdaq 100 Futures +0.62%  
S&P 500 Futures +0.40%  
Dow Futures +10%  
R2K Futures +0.16%  

In premarket trading on Wednesday, the SPDR S&P 500 ETF TrustSPY rose 0.37% to $372.51 and Invesco QQQ TrustQQQ added 0.72% to $273.44, according to Benzinga Pro data.

On the economic front, the Commerce Department is scheduled to release the housing starts and building permits report for September at 8:30 a.m. EDT. Economists, on average, expect a month-over-month decline in both indicators.

The Energy Information Administration will release its customary weekly inventory report at 10:30 a.m. EDT.

The Treasury will conduct a 20-year bond auction at 1 p.m. EDT.

Federal Open Market Committee member and Minneapolis Fed President Neel Kashkari (1 p.m. EDT), Chicago Fed President Charles Evans (6:30 p.m. EDT) and FOMC member and St. Louis Fed President James Bullard (7:30 p.m. EDT) are among the Fed speakers making public appearances.

The Fed will release the Beige Book at 2 p.m. EDT. The report will contain anecdotal evidence of economic conditions in the 12 Federal Reserve districts.

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Stocks In Focus:

  • Netflix, Inc. NFLX and Intuitive Surgical, Inc. ISRG shares soared in reaction to their quarterly results.
  • Adobe Systems, Inc. ABDE was higher after it confirmed its fourth-quarter forecast and established its fiscal year 2023 guidance at its financial analyst meeting.
  • Tesla, Inc. TSLA stock could see some action ahead of its quarterly results due after the close.
  • Dutch chip-equipment maker ASML ASML climbed solidly following the release of its quarterly results. Peer Lam Research Corporation LRCX is scheduled to report after the market close.
  • Procter & Gamble Company PG, insurer Travelers Companies, Inc. TRV, aluminum manufacturer Alcoa, Inc. AA and Las Vegas Corp. LVS are among the other key companies due to release their quarterly results Wednesday.

Large-Cap Premarket Movers:

  • Walt Disney Company DIS gained about 2.60%, seemingly in a sympathy move with Netflix.
  • Atlassian Corp. TEAM, a developer of software products for the developer community, added close to 1.75%, rebounding from the previous session’s losses.
  • Chinese tech giants, Inc. JD, Alibaba Group Holding, Inc. BABA and Pinduoduo, Inc. PDD fell about 3.30%, 2.40% and 2.35%, respectively.

Commodities, Global Equity Markets:

Crude oil futures are rallying following the declines in the past three sessions. A barrel of WTI-grade crude oil was at $83.06, up 1.21%.

In the Asia-Pacific region, the Japanese, Indian, Indonesian, Malaysian, Australian and New Zealand markets advanced, while the Hong Kong, Chinese and Taiwanese markets fell sharply. Fears concerning a marked economic slowdown in China have increased after the nation’s statistical body postponed the release of the third-quarter GDP report.

European stocks fought hard to sustain the gains seen in the past few sessions. Data showing a pickup in the annual U.K. consumer price inflation was impacting sentiment toward London stocks.

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Posted In: EarningsNewsFuturesPreviewsTop StoriesEconomicsFederal ReservePre-Market OutlookMarketsTrading IdeasNasdaq futuresS&P 500 futures
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