Nasdaq, S&P Futures Jump As China Signals COVID-19 Policy Relief — Tesla, Alibaba, Energy Stocks In Focus

Zinger Key Points
  • Stock market's see-sawing trend continues to persist, with investor focus resting on Fed's rate outlook and the developments in China.
  • A slew of data, including the monthly jobs data, are due for the remainder of the week and this could introduce some caution.
Nasdaq, S&P Futures Jump As China Signals COVID-19 Policy Relief — Tesla, Alibaba, Energy Stocks In Focus

U.S. stocks could rebound on Tuesday following the China-induced sell-off seen in the previous session. The index futures were trading uniformly higher after a COVID-19 policy review by Chinese health officials.

On Monday, major averages moved to the downside, as traders weighed the ramification of China’s strict COVID-19 lockdown on companies with exposure to the country and the hawkish comments from Fed officials.

St. Louis Fed President James Bullard on Monday said the financial markets were likely in denial mode about the pending interest rate hikes left in the current tightening cycle. That said, the central bank official suggested a potential recession will likely serve as a drag on inflation next year.

U.S. Indices' Performance On Tuesday
Index Performance (+/-)   Value
Nasdaq Composite -1.58%   11,049.50
S&P 500 Index -1.54%   3,963.94
Dow Industrials -1.45%   33,849.46

Here’s a peek into index futures trading:

U.S. Futures' Performance On Tuesday During Premarket Session
Index Performance (+/-)  
Nasdaq 100 Futures +0.63%  
S&P 500 Futures +0.38%  
Dow Futures +0.18%  
R2K Futures +0.25%  

In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust SPY rose 0.26% to $396.92 and the Invesco QQQ Trust QQQ moved up 0.39% to $283.75, according to Benzinga Pro data.

On the economic front, the Redbook Index, a sales-weighted year-over-year sales growth in a sample of large general merchandise retailers, representing about 9,000 stores, will be released at 8:55 a.m. EST.

The S&P Case-Shiller composite home price index for September is due at 9 a.m. EST. Economists widely expect the seasonally unadjusted 20-city home price index to slip 0.7% month-over-month, smaller than the 1.6% drop in August. The Federal House Finance Agency will release its house price index for September around the same time.

At 10 a.m. EST, the Conference Board is set to release the consumer confidence index for November. The headline index is expected to slip to 100 from 102.5 in October.

The Treasury will auction 52-week bills at 11:30 a.m. EST.

See Also: Recession Watch: Bank Of America Says US Economic Breakdown 'Could Come At Any Time'

Stocks In Focus:

  • Walt Disney Company DIS could react to its Shanghai Disneyland shutting operations amid the COVID-19 flare-up.
  • Tesla Inc. TSLA rose about 1.65% in premarket trading.
  • Chinese video-sharing platform Bilibili Inc. BILI rallied close to 10% in reaction to its quarterly results.
  • Alibaba Group Holding Limited BABA and JD.com Inc. JD advanced over 7% and 5%, respectively, following a COVID-19 briefing by health officials in China that suggested some easing could be on the way.
  • Notable companies reporting earnings after the close include Intuit Inc. INTU, Hewlett-Packard Enterprise Company HPE, Workday Inc. WDAY and NetApp Inc. NTAP.

Commodities, Other Major Stock Markets:

Crude oil futures were extending their gains for a second straight session. After slipping to nearly a one-year low on Monday, WTI-grade crude oil recovered to end moderately higher. Oil advanced over 2.5% on Tuesday and yet traded under $80-a-barrel.

Stocks in the Asia-Pacific region rallied hard on Tuesday amid the COVID-19 easing hinted at by China. Hong Kong’s Hang Seng Index was on a tear and ended up 5.24%. The Chinese markets also advanced strongly. On the other hand, the Malaysian and Singaporean markets bucked the uptrend.

European stocks opened Tuesday’s session higher and stayed afloat amid some volatility.

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Posted In: ChinaCovid-19InflationInterest RatesRecessionShanghai DisneylandEarningsFuturesPreviewsTop StoriesEconomicsFederal ReservePre-Market OutlookMarketsTrading Ideas