US Equity Futures Rise as Markets Focus on Consumer Strength

Strategic Insights -

The US equity futures market showed a gain on Thursday, led by a surge in retail stocks and a solid outlook for the holiday season. Strong October retail sales, as well as positive quarterly outlooks from major retailers Walmart, Target, and Home Depot, suggest that holiday spending will drive economic growth in the fourth quarter. This is despite inflation pressures and near-record gas prices in the US.

Key Takeaways:

  • US equity futures moved higher, with the Dow Jones Industrial Average up 50 points and the S&P 500 up 16 points.
  • Stronger-than-expected October retail sales and solid quarterly outlooks from major retailers suggest robust holiday spending.
  • Strong earnings reports from Macy's, Kohl's, and Nvidia added to the theme, with Nvidia shares surging 8.9% in pre-market trading.
  • A coordinated release of petroleum reserves by the US and China eased near-term inflation worries, while a pullback in benchmark Treasury note yields and an easing of the dollar on global foreign exchange markets also contributed to the rise in US equity futures.
  • The Dow Jones Industrial Average was also boosted by a gain in Boeing shares, while Cisco Systems shares slumped 5.9% after posting weaker-than-expected first quarter sales.
  • Macy's shares surged 7.9% after its impressive third quarter update and outlook boost, while Kohl's gained 6.7%.

Statistics:

  • US equity futures up 50 points, indicating a 50 point opening gain for the Dow Jones Industrial Average.
  • S&P 500 futures up 16 points, indicating a 16 point move to the upside.
  • Nvidia shares surged 8.9% in pre-market trading.
  • WTI futures for December delivery down 21 cents at $78.15 each.
  • Brent crude contracts for January, the global benchmark, down 44 cents at $79.84 per barrel.
  • Benchmark 10-year Treasury note yields edged lower to 1.601% in overnight trading.

Sources:

  • The Street, "U.S. equity futures moved higher Thursday, while oil prices slumped and Treasury bond yields eased..."
  • The Street, "Kohls' stock leaps after Q3 earnings beat, 2022 forecast boost"
  • The Street, "Macy's stock surges after smashing Q3 earnings forecast"
  • The Street, "Alibaba stock slides on Q2 sales miss as Beijing crackdown bites"
  • The Street, "Evergrande default highly likely, S&P Global Ratings says"