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Briefing.com Summary:
*Microsoft and Meta are falling after their earnings reports, while Alphabet and Eli Lilly are rising after theirs.
*President Trump and President Xi held their meeting, which seemed to go as planned.
*Apple and Amazon.com headline the earnings reports after today's close.
Fed Chair Powell said yesterday that it is not a foregone conclusion that there will be a rate cut at the December meeting, "far from it." President Trump said overnight that the U.S. will begin testing nuclear weapons again (the first time since 1992). Microsoft (MSFT) is down 2.3% after its earnings report, and Meta Platforms (META) is down 10.2% after its report. Interest rates are moving higher.
Currently, the S&P 500 futures are down 31 points and are trading 0.5% below fair value, the Nasdaq 100 futures are down 172 points and are trading 0.3% below fair value, and the Dow Jones Industrial Average futures are down 193 points and are trading 0.6% below fair value.
The futures for the major indices have a negative disposition, but only modestly so, which begs the question: why aren't they down even more? Here are some answers:
- President Trump and President Xi had a cordial meeting, highlighted by a cut in the fentanyl tariff to 10%, China delaying its rare earth export controls for one year, a one-year suspension of Section 301 measures against China's maritime shipbuilding, and an agreement by China to purchase 12 million metric tons of U.S. soybeans this year and 25 million metric tons each year thereafter through 2028.
- Alphabet (GOOG) is up 8.0% after its earnings report, and Eli Lilly (LLY) is up 4.0% after its report.
- Alphabet, Microsoft, and Meta all announced increases to their capital spending plans.
There has been a ton of earnings news since yesterday's close. Like yesterday, we can't get to it all here, so we would direct readers' attention to Briefing.com's Earnings Results Calendar to get the full rundown.
The brief synopsis is that there have been some real hits and misses in the reporting lineup that have (a) created some offsets and (b) created an excuse to take some money off the table.
The same can be said for the bump in interest rates following the Fed meeting and press conference. The 2-yr note yield is at 3.62%, up 13 basis points since Tuesday's settlement, and the 10-yr note yield is at 4.10%, up 12 basis points since Tuesday's settlement.
Treasury yields are still down appreciably for the year, but direction matters more than the scope at this juncture as a headwind of sorts for stocks.
Given the mixed reaction to the earnings results from Alphabet, Meta, and Microsoft, there is also some natural hesitation in front of the earnings reports from Apple (AAPL) and Amazon.com (AMZN) after today's close.
The Advance Q3 GDP report and weekly Initial Jobless Claims report would have been released today, but like many other government reports before them, they are being delayed due to the ongoing government shutdown.
