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The indices stumbled yesterday on the back of a huge disappointment from semiconductor equipment company ASML (ASML) with respect to its Q3 earnings results, net bookings, and 2025 guidance. The sting is still there for ASML. After plunging 16.3% yesterday, it is down another 4.1% in pre-market trading.
Ah, but the chance to buy the dip in the market is right there for participants who have taken that chance many times before and won. Will it prove successful again today? That is the question.
Currently, the S&P 500 futures are up three points and are trading 0.1% above fair value, the Nasdaq 100 futures are up 17 points and are trading 0.1% above fair value, and the Dow Jones Industrial Average futures are up 18 points and are trading fractionally above fair value.
Morgan Stanley (MS) and United Airlines (UAL) have done their part to contribute to a buy-the-dip trade. They both reported better-than-expected Q3 results. MS is up 3% and UAL is up 1%.
The September Import-Export Price Indexes also seemingly did their part with readings that were disinflationary in some respects and deflationary in others.
Import prices declined 0.4% month-over-month following a 0.2% decline in August. Excluding fuel, import prices were up 0.1% month-over-month for the third straight month. Export prices fell 0.7% month-over-month following a 0.9% decline in August. Excluding agricultural products, export prices were down 0.9% month-over-month following a 0.7% decline in August.
On a year-over-year basis, import prices were down 0.1% while import prices excluding fuel were up 1.8%. Export prices were down 2.1% while export prices excluding agricultural products were down 1.8%.
This news joined with some other inflation-friendly news heard overnight from the UK and New Zealand, which put a bid in Treasuries and triggered rate cut speculation.
Strikingly, yields went up after the import-export price news, perhaps with some attention being paid to the price index for nonfuel imports seeing its largest year-over-year advance since December 2022. The 2-yr note yield, at 3.92% before the report, is at 3.94% now. The 10-yr note yield, at 4.01% in front of the report, is at 4.02% now.
Yields, however, are still down from Friday's settlement levels, so this action isn't causing too much of a stir for equities, which are likely paying closer attention to the price action in NVIDIA (NVDA), up 0.8% after falling 4.7% yesterday, as the buy-the-dip proxy.
