Amazon Likely To Weigh On Nasdaq, Dow May See Further Upside

(RTTNews) - The major U.S. index futures are currently pointing to a mixed open on Friday, as the Dow futures are up by 0.2 percent but the Nasdaq futures are down by 0.6 percent.

The tech-heavy Nasdaq may see further downside amid a steep drop by shares of Amazon (AMZN), with the online retail giant plunging by 13.9 percent in pre-market trading.

Amazon is likely to come under pressure after reporting mixed third quarter results and providing disappointing fourth quarter revenue guidance.

Tech giant Apple (AAPL) is also likely to be in focus after reporting better than expected fiscal fourth quarter earnings but slightly weaker than expected iPhone sales.

Meanwhile, shares of Intel (INTC) are seeing significant pre-market strength even though the semiconductor giant lowered its full-year guidance. Intel reported third quarter earnings that beat analyst estimates.

The Dow may also benefit from an advance by shares of Chevron (CVX), with the energy giant moving higher in pre-market trading after reporting third quarter results that exceeded expectations on both the top and bottom lines.

Fellow energy giant Exxon Mobil (XOM) is also seeing pre-market strength after reporting record profits in the third quarter due to higher energy prices.

Early trading may also be impacted by reaction to a Commerce Department report on personal income and spending that includes a reading on inflation said to be preferred by the Federal Reserve.

The report showed personal income and spending both increased by more than expected in the month of September, while core consumer price growth accelerated by slightly less than expected.

The Commerce Department said the annual rate of core consumer price growth accelerated to 5.1 percent in September from 4.9 percent in August.

Economists had expected the annual rate of growth in core consumer prices, which exclude food and energy prices, to accelerate to 5.2 percent.

The major U.S. stocks indexes spent much of Wednesday's session on opposite sides of the unchanged line and turned in another mixed performance during trading on Thursday.

While the Dow closed higher for the fifth straight session, reaching its best closing level in well over a month, the Nasdaq extended the sharp pullback seen in the previous session.

The Dow climbed 194.17 points or 0.6 percent to 32,033.28, but the Nasdaq tumbled 178.32 points or 1.6 percent to 10,792.67 and the S&P 500 fell 23.30 points or 0.6 percent to 3,807.30.

The continued upward move by the Dow partly reflected a surge by shares of Caterpillar (CAT), with the construction equipment maker spiking by 7.7 percent to a four-month closing high.

Caterpillar (CAT) rallied after reporting third quarter results that beat analyst estimates on both the top and bottom lines.

Dow components Honeywell (HON), McDonald's (MCD) and Merck (MRK) also move notably higher after reporting better than expected third quarter earnings.

The blue chip index also benefited from a positive reaction to a report from the Commerce Department showing U.S. economic activity rebounded by slightly more than expected in the third quarter following two straight quarters of contraction.

The report said real gross domestic product shot up by 2.6 percent in the third quarter following a 0.6 percent drop in the second quarter and a 1.6 percent slump in the first quarter. Economists had expected GDP to jump by 2.4 percent.

The rebound in GDP largely reflected a 2.8 percent boost from trade, as exports soared by 14.4 percent and imports, which are a subtraction in the calculation of GDP, plunged by 6.9 percent.

The data offset recent concerns about an impending recession but did little to dent recent optimism about the Federal Reserve slowing the pace of interest rate hikes.

"Overall, while the 2.6% rebound in the third quarter more than reversed the decline in the first half of the year, we don't expect this strength to be sustained," said Paul Ashworth, Chief North America Economist at Capital Economics.

"Exports will soon fade and domestic demand is getting crushed under the weight of higher interest rates," he added. "We expect the economy to enter a mild recession in the first half of next year."

Meanwhile, a steep drop by Meta Platforms (META) weighed on the tech-heavy Nasdaq, with the Facebook parent plunging by 24.5 percent.

The sell-off by shares of Meta came after the company reported weaker than expected third quarter earnings and provided disappointing guidance.

Biotechnology stocks showed a significant pullback on the day, with the NYSE Arca Biotechnology Index slumping by 1.9 percent after ending the previous session at its best closing level in well over a month.

Significant weakness also emerged among semiconductor stocks, as reflected by the 1.5 percent drop by the Philadelphia Semiconductor Index.

Gold stocks also showed a notable move to the downside amid a modest decrease by the price of the precious metal, dragging the NYSE Arca Gold Bugs Index down by 1.5 percent.

On the other hand, airline stocks moved sharply higher on the day, with the NYSE Arca Airline Index soaring by 2.1 percent to a one-month closing high.

Brokerage stocks also turned in a strong performance on the day, resulting in a 1.5 percent jump by the NYSE Arca Broker/Dealer Index.

Commodity, Currency Markets

Crude oil futures are falling $0.56 to $88.52 a barrel after jumping $1.17 to $89.08 a barrel on Thursday. Meanwhile, after slipping $3.60 to $1,665.60 an ounce in the previous session, gold futures are sliding $10.30 to $1,655.30 an ounce.

On the currency front, the U.S. dollar is trading at 147.57 yen versus the 146.29 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $0.9952 compared to yesterday's $0.9964.

Asia

Asian stocks fell broadly on Friday as investors digested the monetary policy announcements from the ECB and BoJ and looked ahead to next week's FOMC meeting for clues on whether a pivot on the pace of rate hikes is on the table.

U.S. GDP data released on Thursday surprised to the upside but also offered some evidence of a healthy slowdown that could have a positive impact on fighting inflation.

The European Central Bank on Thursday doubled its deposit rate to 1.5 percent to fight inflation but hinted at a slower pace of future increases, saying that "substantial" progress had already been made in its bid to fight off a surge in inflation.

The Japanese yen maintained 146-levels after the Bank of Japan kept rates at ultra-low levels, as widely expected.

China's Shanghai Composite Index tumbled 2.3 percent to 2,915.93 after reports that Chinese cities are introducing new COVID-19 curbs.

The IMF cuts its growth forecast for Asia today, saying China's "sharp and uncharacteristic" slowdown will drag on growth across the region.

Hong Kong's Hang Seng Index closed 3.7 percent lower at 14,863.06 after having plunged more than 4 percent to its lowest levels since April 2009.

Japanese shares fell notably after U.S. tech giants Amazon.com, Microsoft and Intel said that customers were taking an axe to cloud and datacenter spending.

The Nikkei 225 Index slid 0.9 percent to 27,105.20, while the broader Topix closed 0.3 percent lower at 1,899.05. Robot-maker Fanuc plunged 5.5 percent after slashing its earnings forecast.

The Japanese yen swirled between gains and losses against the dollar after the Bank of Japan held interest rates at ultra-low levels but raised its inflation target.

Tokyo CPI inflation hit a 33-year high in October, data showed earlier today, in a sign of broadening inflationary pressure. Another report showed Japan's unemployment rate unexpectedly edged higher in September.

Seoul shares ended lower to snap a two-day winning streak in the wake of dim guidance from major U.S. tech companies. The Kospi dropped 0.9 percent to 2,268.40.

Tech heavyweight Samsung Electronics tumbled 3.7 percent, while chip giant SK Hynix lost 7.3 percent to extend losses from the previous session after reporting a steep decline in third-quarter profit.

Australian markets snapped a four-day winning streak as heavyweight miners and steelmakers slipped on China demand concerns. BlueScope Steel, BHP, Rio Tinto, Mineral Resources and Fortescue Metals Group plummeted 4-8 percent.

The benchmark S&P/ASX 200 Index fell 0.9 percent to 6,785.70 but rose 1.6 percent for the week - marking its best since the week ended Oct. 7. The broader All Ordinaries Index settled 1.0 percent lower at 6,973.50.

Europe

European stocks have moved to the downside on Friday as investors digest a deluge of earnings and economic reports. Investors are also looking ahead to next week's Federal Reserve meeting for clues on whether a pivot on the pace of rate hikes is on the table.

The weakness in the markets comes following disappointing earnings results from U.S. tech companies. Amazon offered a gloomy view of its financial future and Apple signaled slower growth ahead, while Intel provided lower-than-expected earnings guidance for the full year.

While the French CAC 40 Index is just below the unchanged line, the German DAX Index and the U.K.'s FTSE 100 Index are both down by 0.5 percent.

Swiss Re AG shares have fallen after the Swiss reinsurer reported a net loss in its third quarter and the first nine months of fiscal 2022.

NatWest has plunged as the high street lender missed estimates for profit in the third quarter amid increased impairment provisions.

Air France KLM has also plummeted after the airline lowered its full-year capacity guidance.

British Airways owner IAG has also shown a notable move to the downside despite revenue exceeding pre-pandemic levels.

Porsche AG has also tumbled despite the luxury carmaker reporting higher operating profit and sales in its first nine months of fiscal 2022. Further, the company confirmed its fiscal 2022 targets.

Volkswagen has also come under pressure after saying it expected deliveries to be around the same as last year.

On the other hand, Italian energy group ENI has risen after profits in the third quarter beat expectations.

French food group Danone has also moved to the upside after raising its 2022 revenue growth forecast.

Sanofi has also advanced. The drug maker forecast faster earnings growth this year after reporting strong sales in the third quarter.

Safran has also moved to the upside. The jet engine maker and aerospace supplier raised its 2022 revenue and cash flow targets.

In economic news, economic sentiment in the eurozone deteriorated again in October, weighed by high inflation and a darkening outlook for the economy, the European Commission said.

The corresponding indicator dropped to 92.5 in October from a revised reading of 93.6 in September.

Germany's economy expanded unexpectedly in the third quarter underpinned by private consumption, flash data from Destatis showed.

The biggest euro area economy logged quarterly growth of 0.3 percent, confounding expectations for a contraction of 0.2 percent. The pace of growth was faster than the 0.1 percent rise posted in the second quarter.

The French economy posted slower growth in the third quarter, thanks to stagnation in household spending due to high inflation and weak foreign demand, preliminary data from the statistical office INSEE revealed.

Gross domestic product grew 0.2 percent from the second quarter, when the economy expanded 0.5 percent. The pace of growth came in line with economists' expectations.

Separately, flash data from the statistical office revealed that French consumer price inflation accelerated at a faster-than-expected pace to a new record high in October amid higher costs of energy, food, and manufactured goods.

Consumer price inflation rose to 6.2 percent in October from 5.6 percent in September, while economists had forecast inflation to increase slightly to 5.7 percent. This was the strongest inflation since 1985.

U.S. Economic Reports

A report released by the Commerce Department on Friday showed personal income in the U.S. rose by slightly more than expected in the month of September.

The Commerce Department said personal income climbed by 0.4 percent in September, matching the upwardly revised increase in August.

Economists had expected personal income to rise by 0.3 percent, which would have matched the growth originally reported for the previous month.

The report also showed personal spending increased by 0.6 percent in September following an upwardly revised 0.6 percent advance in August.

Personal spending was expected to climb by 0.4 percent, matching the increase originally reported for the previous month.

Meanwhile, a reading on inflation said to be preferred by the Federal Reserve showed the annual rate of core consumer price growth accelerated to 5.1 percent in September from 4.9 percent in August.

Economists had expected the annual rate of growth in core consumer prices, which exclude food and energy prices, to accelerate to 5.2 percent.

At 10 am ET, the University of Michigan is scheduled to release its revised reading on consumer sentiment in the month of October.

The consumer sentiment index for October is expected to be unrevised from the preliminary reading of 59.8, which was up from 58.6 in September.

The National Association of Realtors is also due to release its report on pending home sales in the month of September at 10 am ET. Pending home sales are expected to tumble by 5.0 percent in September after slumping by 2.0 percent in August.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Stocks In Focus

Shares of Pinterest (PINS) are moving sharply higher in pre-market trading after the image sharing and social media service reported better than expected third quarter results.

Wireless network operator T-Mobile (TMUS) may also move to the upside after reporting strong third quarter subscriber growth and raising its full-year guidance.

On the other hand, shares of Deckers Outdoor (DECK) are seeing notable pre-market weakness even though the footwear and apparel maker reported fiscal second quarter results that beat analyst estimates. Investors seem disappointed the company reaffirmed its full-year forecast.