Nasdaq Hits New Intraday High, U.S. Job Openings Drops to Lowest In Over Three Years

Alexander Garcia
29 Oct, 2024
Miami

Stocks on Wall Street rebounded from morning doldrums as investors awaited quarterly results from leading tech companies later in the week. 

The S&P 500 index increased 0.2% and the Nasdaq Composite rose 0.7% as investors turned cautious with only five days remaining for the U.S. presidential election. 

More than 700 companies this week are set to release their quarterly results as the busiest week of the current earnings season continues. 

Crocs, Shutterstock, D.R. Horton, Alphabet, AMD, Chipotle Mexican Grill, and Snap are among the 178 companies scheduled to release their results Tuesday. 

D.R. Horton plunged more than 10% after the company reported weaker-than-expected results and the company issued cautious annual revenue outlook. 

Shutterstock jumped 13% after revenues were ahead of market expectations, and the company said chief financial officer is leaving the company. 

On the economic front, the number of job openings decreased 418,000 to 7.44 million in September from a downwardly revised 7.861 million in August, the U.S. Bureau of Labor Statistics reported Tuesday.

The number of job openings declined to the lowest level since January 2021, indicating that job market conditions are moderating. 

The openings in healthcare and social assistance fell by 178,000, and state and local governments excluding education decreased by 79,000, but rose in finance and insurance by 85,000. 

 

U.S. Goods Trade Gap Widened to 30-Month High In September 

The U.S. goods trade deficit widened sharply in September to $108.2 billion, the U.S. Census Bureau reported Tuesday. 

Goods exports fell by 2% to $174.2 billion, and imports rose by 3.8% to $282.1 billion, widening the trade gap to $108.2 billion from $94.2 billion in the previous month. 

The goods trade deficit was the widest since Russia's invasion of Ukraine in March 2022 triggered a commodity supply threat and drove the deficit to $121 billion. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.2% to 5,834.38, the Nasdaq Composite rose 0.7% to 18,690.13, and the Russell 2000 index decreased 0.4% to 2,234.28. 

For the year so far as of Monday's closing, the S&P 500 index is up 22.4%, the Nasdaq Composite has advanced 25.5%, and the Russell 2000 index has gained 11.5%. 

The yield on 2-year Treasury notes edged higher to 4.18%, 10-year Treasury notes inched up to 4.33%, and 30-year Treasury bonds inched higher to 4.57%.

WTI crude oil increased $0.15 to $67.54 a barrel, and natural gas prices edged down 2 cents to $2.84 a thermal unit.

Gold fell by $25.41 to $2,769.55 an ounce, and silver increased by $0.63 to $34.34.

The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 104.38.

 

U.S. Stock Movers

MicroStrategy advanced 4.2% to $266.08 ahead of the company's quarterly results on Wednesday. 

The software company is also favorites among high-risk traders looking to benefit from future gains in Bitcoin, which topped $70,000 in Monday's trading. 

HSBC Holdings increased 4.3% to $47.12 after the UK- and Hong Kong-based bank reported rising revenue and earnings in the September quarter. 

Revenue increased 5% to $17.21 billion from $16.7 billion, and net income advanced 8% to $6.7 billion from $6.2 billion a year ago, respectively. 

The largest European bank also announced a stock repurchase plan of $3 billion. 

McDonald's increased 0.7% to $299.07 after the fast food chain reported better-than-expected quarterly results. 

Consolidated revenue in the third quarter increased 3% to $6.9 billion from $6.7 billion, net income fell 3% to $2.25 billion from $2.32 billion, and earnings per share fell 1% to $3.13 from $3.17 a year ago. 

Global comparable sales declined 1.5% in the quarter, but sales in the U.S. rose 0.5%. 

However, the latest E. coli outbreak in 13 states linked to the company's Quarter Pounder burger is likely to dent sales in the current quarter. 

Cadence Design Systems jumped 10.5% to $279.24 after the chip design software company reported better-than-expected quarterly results. 

Revenue in the third quarter increased to $1.21 billion from $1.02 billion, net income decreased to $238.1 million from $254.3 million, and diluted earnings per share fell to 87 cents from 94 cents a year ago. 

The company reiterated its full-year 2024 revenue to range between $4.61 billion and $4.65 billion and diluted net income per share between $3.70 and $3.76.

 

German Consumer Sentiment Improved, UK Retail Prices Dropped 

European markets advanced as investors reviewed a fresh batch of earnings and awaited a slew of domestic economic releases later in the week. 

Benchmark indexes in London, Paris, Milan, and Frankfurt edged higher in a busy week of earnings and economic data flow. 

The eurozone GDP in the third quarter is likely to expand by 0.2%, and consumer inflation in October is likely to stay below the 2% target rate set by the central bank. 

Third-quarter GDP in France and Italy is likely to increase by a fraction, but in Germany it will shrink by 0.3%. 

Economists are anticipating unemployment in the Euro Area to stay near the record level of 6.4%.

Investors are anticipating the U.K.'s Autumn Budget to show significant revisions in taxes on high-income earners and key wage adjustments that could impact operating costs for businesses. 

A private survey of forward-looking consumer sentiment showed an improvement for the second month in a row. 

The forward-looking consumer sentiment improved to -18 in November from -21 in October as income expectations and willingness to spend improved, according to the latest survey published by the Nuremberg Institute for Market Decisions and market research group GfK.  

Retail store prices declined the most in three years amid a decline in non-food prices and easing food inflation, noted the British Retail Consortium. 

The shop price annual decline accelerated to 0.8% in October from a fall of 0.6% in September, the largest annual rate of decline since August 2021. 

 

Europe Indexes and Yields

The DAX index decreased by 0.3% to 19,478.07; the CAC-40 index fell by 0.6% to 7,511.11; and the FTSE 100 index fell by 0.8% to 8,219.61. 

The yield on 10-year German bonds edged higher to 2.31%, French bonds inched higher to 3.04%, the UK gilts edged down to 4.27%, and Italian bonds increased to 3.51%.

The euro edged lower to $1.08; the British pound inched higher to $1.29; and the U.S. dollar strengthened to 86.69 Swiss cents.

Brent crude increased $0.24 to $71.18 a barrel, and the Dutch TTF natural gas fell by €0.34 to €42.33 per MWh. 

 

Europe Stock Movers

HSBC Holdings increased 4% to 719.80 pence after the UK- and Hong Kong-based bank reported rising revenue and earnings in the September quarter. 

Revenue increased 5% to $17.21 billion from $16.7 billion, and net income advanced 8% to $6.7 billion from $6.2 billion a year ago, respectively.  

The largest European bank also announced a stock repurchase plan of $3 billion. 

China-linked luxury product makers advanced more than 1% ahead of China's top legislative committee's meeting next week to finalize the annual budget and approve the issuance of additional long-term bonds. 

Hermes International increased 0.9% to €2,149.0, Kering SA gained 0.8% to €244.95, and LVMH advanced 0.7% to €642.10. 

adidas AG gained 1.3% to €216.50 after the German sportswear maker reported a 71% rise in its third quarter profit and higher sales in China. 

The company also lifted its annual profit estimate for the third quarter in a row. 

Deutsche Lufthansa AG decreased 2.7% to €6.68 after the German airline reported a 9% decline in its operating profit in the third quarter. 

BP plc decreased 2.5% to 389.14 pence after the UK-based energy company reported its weakest quarterly profit in four years. 

Weaker oil trading profit and a decline in refining margin weighed down net income and cash flow in the quarter. 

Novartis AG decreased 3% to CHF 96.83 despite the Swiss pharmaceutical company raising its annual profit outlook for the third quarter in a row. 

Banco Santander SA decreased 1.8% to €4.50 after the Spain-based bank reported lower-than-expected quarterly results. 

 

Japan Indexes Extend Gains Despite Rising Political Instability and Policy Uncertainty 

Stock market indexes in Tokyo closed higher following gains in overnight trading in New York. 

The Nikkei 225 stock average and the broader Topix advanced around 0.8%, driven by strong gains in tech and financial stocks. 

Japan's market indexes advanced for the second day in a row as investors continue to reassess the implications of the recent national election. 

The Liberal Democratic Party-led coalition lost its parliamentary majority, raising political instability and heightened policy uncertainty as leading parties struggle to form the next government. 

The Bank of Japan is widely expected to leave its benchmark rates unchanged on Thursday, but the central bank's plan to gradually increase its interest rates may face additional political headwinds. 

On the economic front, Japan's seasonally adjusted unemployment rate decreased to 2.4% in September from 2.5% in August and fell to the lowest level since January, the Ministry of Internal Affairs and Communications said on Tuesday. 

The number of employed persons was 68.14 million, an increase of 270,000 from a year ago, and increased for the 26th consecutive month.

The number of unemployed declined by 90,000 from a year ago to 1.73 million and decreased for the second month in a row.

The job-to-applications ratio was unchanged from the previous month at 1.24%, and the labor force participation rate edged slightly higher to 63.5%. 

 

Japan Stock Movers 

The Nikkei 225 Stock Average increased 0.8% to 38,903.68, the broader Topix index gained 0.9% to 2,682.02, and the yen edged higher to 152.67 against the U.S. dollar. 

Banks traded higher ahead of the Bank of Japan's rate decisions on Thursday.

Mitsubishi UFJ Financial increased 3% to ¥1,609.0, Sumitomo Mitsui Financial gained 2.6% to ¥3,242.0, and Mizuho Financial advanced 2.6% to ¥3,242.0. 

Industrial companies also advanced in Tokyo trading following the weakness in the yen. 

IHI Corp. increased 5.4% to ¥8,095.0, Nitto Denko added 2.6% to ¥2,507.0, Furukawa Electric advanced 6.2% to ¥3,718.0, but Toto Ltd. declined 13% to ¥4,303.0. 

Tokuyama dropped 3.7% to ¥2,630.0 after the chemical company reported fiscal second quarter sales declined slightly but net profit advanced 51.8% from a year ago. 

The company reiterated its positive sales and earnings outlook in the current fiscal year.

 

China Indexes Traded In Tight Range

Market indexes in China and Hong Kong fluctuated between gains and losses amid mixed market sentiment as investors awaited details of possible fiscal measures and reviewed the latest batch of earnings. 

The Hang Seng index advanced 0.4%, but the mainland-focused CSI 300 index dropped 0.7% after investors stayed on the sidelines ahead of the National People's Congress' standing committee's meeting next week. 

Investors widely anticipate the approval of a higher budget deficit, paving the way for the government to issue long-term bonds worth between 2 trillion yen and 4 trillion yen. 

The central government plans to disburse funds to local governments to support the completion of residential property projects and revive property market transactions after falling for four years in a row. 

China's stock market indexes have soared as much as 40% over the five-week period to the first week in October after the People's Bank of China announced larger-than-expected monetary stimulus and political leaders signaled additional fiscal measures to bolster consumer confidence. 

However, corporate earnings have lagged market expectations, and results are not likely to improve for at least another three quarters as the fiscal and monetary stimulus measures trickle down through various sectors of the economy. 

Market indexes in Hong Kong and mainland China may face excessive volatility as euphoric investors scale down their expectations and foreign investors lose their patience with earnings growth and lackluster economic growth. 

The Hang Seng index increased 0.4% to 20,678.97, and the mainland-focused CSI 300 index decreased 0.7% to 3,936.41. 

 

HSBC Announced $3 Billion Stock Repurchase Plan, Sinopec Earnings Declined 

Sinopec dropped 2.7% to HK $4.39 after the largest oil refiner in China said low demand and an economic slowdown knocked the third quarter's profit down by 55% to 8.03 billion yuan, or $1.1 billion. 

Following Sinopec's results, CNOOC Ltd. decreased 1.9% to HK $18.36 and PetroChina fell 2.8% to HK $5.77. 

WuXi AppTec rose 1.5% to HK $53.55 after the biotech company reported a 2% decline in revenue to 10.5 billion yuan, but surpassed analysts' estimates. 

HSBC Holdings increased 3.4% to HK $71.40 after the UK- and Hong Kong-based bank reported rising revenue and earnings in the September quarter. 

Revenue increased 5% to $17.21 billion, and net income advanced 9% to $6.13 billion.