S&P futures vs fair value: +18.70. Nasdaq futures vs fair value: +92.00


The S&P 500 futures trade 19 points, or 0.4%, above fair value and continue to trade just below record highs. 

The initial move today should be higher based on the directional activity provided by the futures market.

Currently, the S&P 500 futures are up 13 points and are trading 0.4% above fair value, the Nasdaq 100 futures are up 91 points and are trading 0.6% above fair value, and the Dow Jones Industrial Average futures are up  20 points and are trading 0.3% above fair value.

That firmer foundation rests largely on an appreciation for better than expected earnings news, although a bubbling up of reports discussing a surge in COVID cases in Europe, South Korea, China, and the Upper Midwest in the U.S. has acted like a governor on the stock market's engine.

Some of those concerns have seemingly risen to the surface of late, evidenced by the underperformance of cyclical sectors and travel stocks, fading oil and copper prices, a strengthening dollar (and weakening euro), and a dip in long-term rates.

This morning's economic data should help temper some of the growth concerns.

Initial jobless claims for the week ending November 13 decreased by 1,000 to 268,000 (Briefing.com consensus 260,000), which was the lowest level since March 14, 2020. Continuing jobless claims for the week ending November 6 decreased by 129,000 to 2.080 million, also the lowest level since March 14, 2020.

The key takeaway from the report is that the low level of initial claims should help set expectations for another nice pickup in hiring activity since it covers the week in which the survey for the November Employment Situation Report was conducted.

The Philadelphia Fed Index for November shot up to 39.0 (Briefing.com consensus 22.0) from 23.8, led by an uptick in the New Orders Index to 47.4 from 30.8 and an increase in the Prices Paid Index to 80.0 from 70.3.

Still, the 10-yr Treasury yield is up just one basis point to 1.61%.

Separately, there has been a persistent bid in the mega-cap stocks and many of the growth stocks this week. NVIDIA (NVDA) is keeping that bid alive today, too.

NVDA is up 8.2% and a key driver of the Nasdaq 100 futures after reporting some impressive third quarter results, which were replete with better than expected fourth quarter revenue guidance and upbeat commentary about demand trends for its products.

Cisco (CSCO), meanwhile, is a drag. It failed to impress with its fiscal first quarter results and fiscal second quarter guidance, laying some blame on component shortages. Shares of CSCO are down 6.7%. Alibaba (BABA) is another big laggard. It is down 6.4% after coming up well shy of earnings estimates for its fiscal second quarter and issuing disappointing full-year revenue guidance.


There was a slate of good earnings news from the retail industry, which has been the case all week. Macy's (M), Kohl's (KSS), The Children's Place (PLCE), Victoria's Secret (VSCO), Bath & Body Works (BBWI), and BJ's Wholesale (BJ) all posted much better than expected earnings results and they are all trading nicely higher in pre-market action. M and KSS, for example, are up 10.8% and 9.2%, respectively.




NVIDIA (NVDA 318.00, +25.39, +8.7%) has set the tone with an 8.7% gain following its positive earnings results and upside Q4 revenue guidance. Macy's (M 32.81, +1.97, +6.5%), Kohl's (KSS 60.30, +3.82, +6.8%), and BJ's Wholesale (BJ 62.20, +2.23, +3.7%) have also aided risk sentiment following their better-than-expected earnings reports. 

Cisco (CSCO 53.43, -3.33, -5.9%), on the other hand, has been a drag with a 6% decline after guiding fiscal Q2 revenue below consensus. The company said component supply shortages are preventing it from fully converting product orders into revenue. 

On the data front, investors will receive the weekly Initial Claims (Briefing.com consensus 260,000) and Continuing Claims report and the Philadelphia Fed Index for November (Briefing.com consensus 22.0) at 8:30 a.m. ET, followed by the Conference Board's Leading Economic Index for October (Briefing.com consensus 0.8%) at 10:00 a.m. ET. 

U.S. Treasuries trade little changed. The 2-yr yield is unchanged at 0.50%, and the 10-yr yield is unchanged at 1.60%. The U.S. Dollar Index is down 0.1% to 95.71. WTI crude futures are down 0.9%, or $0.68, to $77.68/bbl after falling 3% yesterday. 

In U.S. Corporate news:


  • NVIDIA (NVDA 318.00, +25.39): +8.7% after beating top and bottom-line estimates and guiding Q4 revenue above consensus. 
  • Cisco (CSCO 53.43, -3.33): -5.9% after guiding revenue for its fiscal second quarter below consensus. EPS was better than expected. 
  • Boeing (BA 230.20, +3.88): +1.7% after being upgraded to Overweight from Neutral at JP Morgan.
  • Kohl's (KSS 60.30, +3.82): +6.8% after beating top and bottom-line estimates and raising its FY21 financial outlook.
  • Macy's (M 32.81, +1.97): +6.5% after beating top and bottom-line estimates. 
  • BJ's Wholesale (BJ 62.20, +2.23): +3.7% after beating top and bottom-line estimates and authorizing a share repurchase program of up to $500 million.

Reviewing overnight developments:


  • Equity indices in the Asia-Pacific region ended Thursday on a mostly lower note. Japan's Nikkei: -0.3% Hong Kong's Hang Seng: -1.3% China's Shanghai Composite: -0.5% India's Sensex: -0.6% South Korea's Kospi: -0.5% Australia's ASX All Ordinaries: +0.1%.
    • In economic data:
      • New Zealand's Q4 Inflation Expectations 3.0% (last 2.3%)
    • In news:

      • Nikkei reported that Japan's fiscal spending will reach JPY55.70 trln, about JPY15 trln more than originally expected.
      • China reportedly plans to release crude oil reserves.
      • There are growing expectations that the Reserve Bank of New Zealand will raise its cash rate by at least 25 bps next week after inflation expectations reached a decade high in Q4.

  • Major European indices trade near their flat lines. STOXX Europe 600: -0.1% Germany's DAX: +0.1% U.K.'s FTSE 100: -0.2% France's CAC 40: +0.2% Italy's FTSE MIB: -0.2% Spain's IBEX 35: -0.1%.
    • In economic data:
      • Swiss October trade surplus CHF5.65 bln (last surplus of CHF5.01 bln)
    • In news:
      • European Central Bank policymaker Centeno repeated the view that the spike in inflation is temporary.
      • Norges Bank raised its one-year inflation outlook to 3.0% from 2.3% while the 2-3 year outlook was increased to 3.9% from 3.5%.
      • France sold 3- and 5-yr debt while Spain sold 5- and 10-yr debt to solid demand.


Just in, the latest weekly initial jobless claims count totaled 268,000 (Briefing.com consensus 260,000). This was below the prior week's revised count of 269,000 (from 267,000). As for continuing claims, they decreased to 2.080 mln from a revised count of 2.209 mln (from 2.160 mln).

The Philadelphia Fed Index for November increased to 39.0 (Briefing.com consensus 22.0) from 23.8 in October.



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