US open: Stocks mixed as tech giants guidance disappoints, core PCE misses

US futures

Dow futures +0.05% at 32013

S&P futures -0.36% at 3795

Nasdaq futures -0.84% at 11103

In Europe

FTSE -0.18% at 7060

Dax -0.52% at 13144

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Apple & Amazon raise concerns over the health of the consumer

US stocks are set for a mixed open with fears surrounding tech stock earnings weighing on the Nasdaq, while the Dow Jones is finding support from cyclical. This was a similar play to yesterday when the Nasdaq closed 1.6% lower, and the Dow Jones booked gains of 0.6%.

Weak guidance from Amazon and Apple have raised concerns over the health of the consumer ahead of the all-important holiday season.

Core PCE, the Fed’s preferred gauge for inflation, rose, but less than forecast in a sign that inflation could be slowing. The Core PCE came in at 5.1% YoY, up from 4.9%, but short of the 5.2% forecast. Meanwhile personal spending was also strong at 0.6%, up from 0.4% in August.

The data is not likely to change the Fed’s course of action in the November meeting with a 75 basis point hike expected then potentially a 50 basis point after that.

Whilst the markets have been gearing themselves up for a dovish pivot, that still seems a little premature, given that core CPI is still rising.

Corporate news:

Amazon is tumbling 12% pre-market after the e-commerce giant forecast a slowdown in sales in the all-important holiday quarter. EPS was $0.28 vs. $0.20 expected. Revenue came in short at $127.01 billion, missing forecasts of $127.47 billion. However, Q4 revenue is expected tgo be $140-148 bilion, below the $155.15 billion forecast.

Apple is rising pre-market after quarterly revenue topped forecasts but iPhone sales were an area of concern. Apple also cautioned over revenue growth in the coming quarter.

Exxon Mobil and Chevron trade at all time highs after Exxon reported a record profit and Chevron reported a Q3 net profit of $11.2 billion

Where next for the NASDAQ?

The Nasdaq rebounded lower from 11685, the weekly high, falling below the 20 & 50 sma. The RSI has fallen back below 50, suggesting that momentum supports the sellers. Bears will look for a move below 10880 the weekly low to test support at 10690. Buyers will look for a rise over the 20 sma at 11180 and the weekly high around 11770 to attack the falling trendline resistance at 12450. Sellers will look for a move below the 20 sma at 11170 to open the door to a deeper selloff to 10700 and the 2022 low of 10430.

FX markets – USD rises, EUR steady

The USD is rising but is set to decline across the week as investors have been raising bets that the Fed will adopt a less hawkish stance at the December meeting.

EURUSD is holding steady after mixed bag of data. While German GDP came in stronger than expected at 0.3%, defying forecasts of a -0.2% decline. Meanwhile, Eurozone economic sentiment fell again to 92.5, down from 93.6.

GBPUSD is falling but is set to rise across the week after Rishi Sunak became the new Prime Minister and brought a level of order back to the UK financial markets. Attention is shifting to the BoE interest rate decision which is due next week.

GBP/USD -0.07% at 1.1550

EUR/USD -0.04% at 0.9962

Oil holds gains as US exports rise

Oil prices are edging lower on Friday after China, the world’s largest oil importer, extended COVID restrictions, locking down districts in an attempt to halt a widening outbreak.

The news comes after the IMF downwardly revised China’s growth to slow to 3.2% this year from 4.4% forecast in April. This was down from 8.1% growth in 2021.

Still, oil prices are set to rise across the weak, helped higher by stronger-than-forecast GDP growth in the US, the world’s largest consumer of oil.

Looking ahead, nerves surrounding the European ban on Russian crude oil imports, which is expected to kick in on December 5^th.

WTI crude trades -0.52% at $87.20

Brent trades -0.53% at $94.56.

Learn more about trading oil here.

Looking ahead

15:00 US Michigan consumer confidence

15:00 US pending home sales