Nasdaq, S&P Futures Rise As Traders Eye Powell's Speech For Interest Rate Cues — Tesla Gains, Energy And China Stocks In Focus

Zinger Key Points
  • S&P 500 and tech-heavy Nasdaq Composite is entering the session following a 3-day losing streak.
  • Analysts are confident that seasonal strength will manifest as we enter the final month of the year.
Nasdaq, S&P Futures Rise As Traders Eye Powell's Speech For Interest Rate Cues — Tesla Gains, Energy And China Stocks In Focus

Trading in the index futures suggests that stocks may open mostly higher on Wednesday, with the Nasdaq Composite and the S&P 500 Index potentially snapping a three-session losing streak.

The major U.S. averages ended Tuesday’s session on a mixed note, as the early optimism built on the back of hopes of COVID-19 policy easing in China gave way to weakness as traders digested weak house price readings and a bleak consumer confidence report, which also showed a spike in inflation expectations.

After pulling back sharply in reaction to the data in late trading, the indices moved broadly sideways before closing mostly lower.

U.S. Indices' Performance On Tuesday
Index Performance (+/-)   Value
Nasdaq Composite -0.59%   10,983.78
S&P 500 Index -0.16%   3,957.63
Dow Industrials +0.01%   33,852.53

Corporate earnings have an even bigger role in determining short-term market direction in the current environment of high uncertainty, Daniel Berkowitz, senior investment officer at Prudent Management Associates said.

“Though the US market is far more reasonably priced from a valuation perspective than it was earlier in 2022, a bumpy ride through the next earnings season may reverse much of the recent gains,” the analyst added.

Fund manager Louis Navellier, however, said seasonal strength will likely manifest.

“With the consumer still spending and the China problems priced in, the seasonal strength should reassert itself and concerns about the bearish scenarios should be kicked down the road into the new year," he said.

Here’s a peek into index futures trading:

U.S. Futures' Performance On Wednesday During Premarket Session
Index Performance (+/-)  
Nasdaq 100 Futures +0.41%  
S&P 500 Futures +0.23%  
Dow Futures -0.01%  
R2K Futures -0.18%  

In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust SPY rose 0.23% to $396.13 and the Invesco QQQ Trust QQQ moved up 0.31% to $281.45, according to Benzinga Pro data.

On the economic front, the Mortgage Bankers Association is due to release its mortgage applications volume data for the week ended Nov. 25 is due at 7 a.m. EST.

ADP is scheduled to release its private payroll data for November at 8:15 a.m. EST. The private sector in the U.S. may have added 200,000 jobs in the month, slower than the 220,000 jobs added in October. Although the ADP data and the Labor Department's non-farm payroll data aren’t perfectly correlated, traders attach significance to it, at least to draw directional cues.

The Bureau of Economic Analysis will release its second estimate of third-quarter GDP at 8:30 a.m. EST. Advance estimates released in late October showed a better-than-expected reading of 2.6% growth.

The ISM-Chicago’s regional purchasing managers’ index for November is due at 9:45 a.m. EST. Economists expect the index to improve slightly to 47, although remaining below the 50 mark which separates expansion and contraction.

The National Association of Realtors’ pending home sales index for October is due around the same time. The index is expected to slip 5% month-over-month, less severe than the 10.2% drop in September.

Federal Reserve Governor Lisa Cook is scheduled to speak at 12:35 p.m. EST.

Fed Chair Jerome Powell will speak at the Hutchins Center on Fiscal and Monetary Policy on the outlook for the economy and the changing labor market at 1:30 P.m. EST.

The Fed will release its Beige Book report, which consists of anecdotal evidence of economic conditions in the 12 Federal Reserve districts, at 2 p.m. EST.

See also: Cramer Spotlights Boroden's Analysis Of S&P 500 Chart: 'She Sees This As A Make-Or-Break Moment'

Stocks In Focus:

  • Alibaba Group Holding Limited BABA, Pinduoduo, Inc. PDD and, Inc. JD were finding follow-through buying interest.
  • Cybersecurity stocks Palo Alto Networks, Inc. PANW declined close to 3% in premarket trading.
  • Earth-moving equipment maker Caterpillar, Inc. CAT moved down about 1.50%.
  • Tesla, Inc. TSLA rose over 1%.
  • Salesforce, Inc. CRM, Splunk, Inc. SPLK, Box, Inc. BOX, La-Z-Boy, Inc. LZB, Nutanix, Inc. NTNX and PVH Corp. PVH are among the companies reporting their quarterly results after the close.

Commodities, Other Global Equity Markets:

Crude oil futures were rising for a third straight session, with a barrel of WTI-grade oil trading around $79.88, up 2.16%. The commodity drew strength from indications from OPEC+ that it would stick to its decision to cut output. The European Union is set to discuss Monday a full embargo on purchases of Moscow's seaborne crude, Reuters said.

The major Asia-Pacific markets ended higher amid hopes of COVID-19 easing in China. Sentiment, however, was muted ahead of Powell’s public address.

The European markets opened higher and have held on to their gains in early trading, as traders digested some positive data points from the region.

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Posted In: Nasdaq futuresS&P 500 futuresUS StocksEarningsNewsFuturesPreviewsSmall CapTop StoriesEconomicsFederal ReservePre-Market OutlookMarketsTrading Ideas