US Stocks Hold On To Optimism Even As Putin's Potential Missile Attack On NATO Ally Poland Keeps Investors Cautious — These Stocks In Focus Today

Zinger Key Points
  • Wednesday has turned out to be a data-heavy week, with few key data and Fed speeches among the major catalysts.
  • Geopolitical tensions following missile attacks on Poland stirred anxiety among traders in Asia earlier in the day.

U.S. stocks could get off to a moderately higher opening, early trading in index futures suggest, as traders load up on stocks in hopes of a Fed pause in the wake of recent inflation data, while developments related to the Russia-Ukraine war keep Investors on edge.

The major averages resumed their rally on Tuesday, as stocks rebounded from the declines in the past session. Thanks to a tamer producer price inflation data, the major averages started the session solidly higher and moved sideways until the mid-session. The indices then gave back their gains but recovered to end higher, although off the highs of the session.

Most sectors, with the exception of healthcare and material stocks, advanced. Technology, consumer, energy, utility and real estate stocks all ended solidly higher.

U.S. Indices' Performance On Tuesday
Index Performance (+/-)   Value
Nasdaq Composite +1.45%   11,358.41
S&P 500 Index +0.87%   3,991.73
Dow Industrials +0.17%   33,592.92

The slowdown in inflation is a signal and may not be a trend, Daniel Berkowitz, senior investment officer at Prudent Management Associates, said. With the Fed telegraphing that they are looking for several months of moderating price levels at a minimum, the analysts said despite the encouraging October consumer and producer price indices, these “metrics still bear careful monitoring moving forward before firm conclusions are drawn about inflation’s future path.

“Net, net inflation and interest risk remain skewed to the downside in our assessment,” the analyst said.

“Despite the downward pressure on Treasury yields, the yield curve remains highly inverted beyond short-term maturities, providing limited compensation for taking material duration risk.”

Here’s a peek into index futures trading:

U.S. Futures' Performance On Wednesday During Premarket Session
Index Performance (+/-)  
Nasdaq 100 Futures +0.06%  
S&P 500 Futures +0.16%  
Dow Futures +0.14%  
R2K Futures +0.18%  

In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust SPY moved up 0.34% to $399.85 and the Invesco QQQ Trust QQQ rose 0.33% to $290.35, according to Benzinga Pro data.

On the economic front, the Mortgage Bankers Association is scheduled to release the weekly mortgage applications volume data at 7 a.m. EST.

The Commerce Department is due to release the retail sales report for October at 8:30 a.m. EST. On a month-over-month basis, retail sales are expected to have increased by 1% compared to flat performance in the previous month.

Around the same time, the Labor Department will release its import and export prices report for October.

At 9:15 a.m. EST, the Federal Reserve is scheduled to release its industrial production report for October. Both industrial and manufacturing production may have increased at a slower month-over-month pace of 0.2% compared to 0.4% growth in September.

Federal Open Market Committee member and New York Fed President John Williams is set to speak at 9:50 a.m. EST.

The National Association of Home Builders is due to release the housing market index for November at 10 a.m. EST. Economists, on average, expect the index to slip back from 38 in October to 36 in the current month. Also, at 10 a.m. EST, the Commerce Department will release the business inventories data for September.

Fed Vice Chair Michael Barr would make a public appearance at 10 a.m. EST.

The customary weekly crude oil inventories report will be released by the Energy Information Administration at 10:30 a.m. EST.

The Treasury will auction 20-year bonds at 1 p.m. EST.

Fed Governor Christopher Waller is scheduled to speak at 2:35 p.m. EST.

Stocks In Focus:

  • Carnival Corp & plc. CCL traded over 12% lower in premarket trading after the cruise operator priced its convertible senior notes due 2027. Peer Norwegian Cruise Line Holdings Ltd. NCLH was moving in sympathy.
  • Advance Auto Parts, Inc. AAP declined over 13% in reaction to its downbeat third-quarter results.
  • Alibaba Group Holding, Inc. BABA advanced over 2.75%.
  • Tesla, Inc. TSLA is poised to rise for a second straight session.
  • Energy stocks BP plc. BP and Shell plc. SHEL found buying interest.
  • Lowe’s Companies, Inc. LOW, Target Corp. TGT and TJX Companies, Inc. TJX are among the notable companies reporting before the market opens.
  • Cisco Systems, Inc. CSCO, Nvidia Corp. CSCO and Sonos, Inc. SONO will release their earnings report after the close.

Commodities, Other Global Equity Markets:

Crude oil futures are holding up on Wednesday following their over 1% rally seen in the previous session.

Most markets in the Asia-Pacific region moved to the downside on Wednesday despite the promising U.S. inflation data. The Indian and Japanese markets, meanwhile, bucked the downtrend with modest gains. The negative reaction followed reports of a missile attack on Poland, which was originally perceived as having originated from Russia. Reports later stated that a Ukrainian defense missile was responsible for the blast in Poland.

Stocks in Europe were mostly lower in early trading.

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Posted In: EarningsNewsFuturesPreviewsTop StoriesEconomicsFederal ReservePre-Market OutlookMarketsTrading IdeasNasdaq futuresNATORussia-Ukraine WarS&P 500 futuresUS Stocks
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