Stocks Higher On Positive Tech Earnings Although Crypto Falls
What you need to know…
The S&P 500 Index ($SPX) (SPY) this morning is up +0.13%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.12%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.42%.
U.S. stocks today are mildly higher, seeing support from positive earnings news from Microsoft, Alphabet, Coca-Cola, McDonalds, and others. Stocks are seeing continued support from expectations that Democrats will not raise the corporate tax rate in their reconciliation bill, although they are focused on implementing a minimum tax on profitable U.S. corporations and a tax on the unrealized capital gains of billionaires. Stocks are being undercut by lower European stocks and weakness in mining and oil stocks after industrial metals and oil prices fell.
Also, there is some risk-off sentiment after bitcoin today fell nearly -5% to a 2-week low as the market sees long liquidation pressure and as some worries emerge ahead of possible SEC crypto regulation news.
U.S. stocks were undercut by today’s -0.98% sell-off in China’s Shanghai Composite Index. Chinese tech stocks were undercut after the U.S. Federal Communications Commission’s board on Tuesday voted 4-0 to cancel permission to operate in the U.S. for China Telecom, one of China’s three largest telecom providers. The FCC’s decision highlighted the continued high level of tensions between the U.S. and China and the fall-out for stocks.
Stocks saw some support from today’s better-than-expected U.S. durable goods orders report. U.S. Sep durable goods orders fell by only -0.4% m/m, which was better than expectations for a -1.1% decline. Sep durable orders ex-transportation rose +0.4%, which was in line with market expectations. Sep core capital goods orders (ex defense and aircraft) rose +0.8% m/m, which was better than expectations of +0.5% and was a good sign for capital spending.
The 7-day average of new U.S. Covid infections on Tuesday fell to a 3-month low of 68,274.
Today’s stock movers…
Strength in technology stocks today is lifting the overall market. Microsoft (MSFT) is up +2.6% and Alphabet (GOOG) is up +2.2%.
Enphase Energy (ENPH) is leading the S&P 500 with a +24% gain, up on positive 3Q results and 4Q guidance late Tuesday.
Crypto stocks are taking a hit today with bitcoin down -5%. Crypto miners are sharply lower with Marathon Digital Holdings (MARA) down -5.8%, Hut 8 Mining Corp (HUT) -2.7%, Bit Digital (BTBT) -3.1%, Riot Blockchain (RIOT) -3.9%, Hive Blockchain Technologies (HIVE) -3.9%, Bitfarms (BITF) -2.3%.
Robinhood (HOOD) plunged -11% on a Q3 revenue miss and negative Q4 guidance, which caused some analysts to cut their price targets.
Coinbase (COIN) is down -0.4% on the overnight drop in bitcoin and other crypto assets, and on carry-over weakness from Robinhood.
Across the markets…
Dec T-notes (ZNZ21) this morning are up +9.5 ticks, and the 10-year T-note yield is down -4.6 bp at 1.562%. Bullish factors include a -1 bp decline in the 10-year breakeven inflation expectations rate and better-than-expected demand for yesterday’s 2-year T-note auction. T-notes are seeing some downward pressure from this week’s $211 billion T-note auction package. The Treasury today will sell $61 billion of 5-year T-notes and $28 billion of 2-year floating-rate notes. The Treasury will wrap up this week’s T-note package by selling $62 billion of 7-year T-notes on Thursday.
The dollar index (DXY00) this morning is mildly lower by -0.15%. The main bearish factor is today’s decline in U.S. T-note yields, which reduces the dollar’s interest rate differentials. EUR/USD (^EURUSD) is up +0.16%. The ECB at its meeting on Thursday is expected to leave its policy unchanged but may provide indications it is willing to extend the part of its QE program that expires early next year. USD/JPY (^USDJPY) is down -0.46%.
December gold (GCZ21) this morning is up +2.8 (+0.16%), and Dec silver (SIZ21) is up +0.077 (+0.32%). Precious metals are seeing some support from the mildly weaker dollar, lower T-note yields, and some increased safe-haven demand as crypto assets fall.
he S&P 500 Index ($SPX) (SPY) this morning is up +0.13%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.12%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.42%.
Stocks Higher On Positive Tech Earnings Although Crypto Falls (barchart.com)
