Stock Futures Pull Back After Red-Hot PPI Reading

The major indexes are pacing for weekly losses

Deputy Editor
Dec 9, 2022 at 9:13 AM
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Following a hotter-than-expected producer price index (PPI) reading, stock futures pulled back from their premarket gains. The PPI increased 0.3% in November, more than economists' anticipated 0.2% reading, and now sports a 7.4% year-over-year rise. In response, Dow Jones Industrial Average (DJIA) futures are 149 points lower this morning, while futures on the S&P 500 Index (SPX) and Nasdaq-100 Index (NDX) sport more modest losses. Even with yesterday's win, it would take a miracle for the major benchmarks to turn in a weekly win.

Continue reading for more on today's market, including:

  • These 3 equities made massive moves yesterday.
  • Why call traders targeted this fintech stock.
  • Plus, unpacking Costco's earnings; 2 analysts weigh in on Netflix; and Bath & Body Works pops on SEC filing.

Futures Chart December 092022

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 1.2 million call contracts and 714,123 million put contracts traded on Thursday. The single-session equity put/call ratio rose to fell to 0.58 and the 21-day moving average stayed at 0.73.
  2. Costco Wholesale Corporation (NASDAQ:COST) announced fiscal first-quarter earnings and revenue that missed analysts' estimates, leading to no fewer than eight price-target cuts. The warehouse retailer, who also saw increased operating expenses, chalked the misses up to inflation denting consumer budgets. COST is 0.3% lower ahead of the open, and 9.2% year-over-year. On the flip side, Cowen named COST a "best idea" for 2023. 
  3. Two analysts upgraded Netflix Inc (NASDAQ:NFLX) today, helping the shares to a 2.7% premarket lead. Wells Fargo upgraded NFLX to "overweight," while Cowen named the stock a "best idea" for 2023, just as its peer above. Helping the analysts' cases is Netflix stock's 61% six-month lead.
  4. Daniel Loeb's Third Point disclosed a 6% stake in Bath & Body Works Inc (NYSE:BBWI), and the U.S. Securities and Exchange Commission (SEC) filing showed the investment firm is pushing for the personal care products retailer to appoint new board members. BBWI jumped 5.5% before the bell, but is down 39.6% in 2022.
  5. The final demand PPI is slated for release today. Also on the calendar is the University of Michigan's five-year inflation expectations and the consumer sentiment index.

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Potential Reopening in China Boosts Overseas Markets

More reports that Hong Kong is considering easing Covid restrictions – including lifting its outdoor mask mandate and relaxing testing for arrivals -- sent Asian stocks higher on Friday. Meanwhile, China’s National Health Commission has released guidelines for quarantining at home as part of the easing restrictions. In response, the Hong Kong Hang Seng rose 2.3%, the Shanghai Composite tacked on 0.3%, and the South Korean Kospi added 0.8%. Elsewhere, the Nikkei in Japan added 1.2% after the country’s gross domestic product (GDP) reading saw a lighter-than-expected 0.8% contraction for the third quarter.

The news of a potential reopening for China is boosting European markets as  well. Meanwhile, traders are eyeing the U.K. government’s announcement that it will enact major reforms to financial regulation, in an effort to inject growth back into the economy. At last glance, the London FTSE 100 is 0.09% higher, the German DAX is up 0.6%, and the French CAC 40 has added 0.3%.

 

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