World Markets Flounder Near Flatlines ahead of Key Jobless Claims Report

Wall Street index futures are trading sideways ahead of the U.S. jobless claims report with investors also awaiting the slew of corporate publications.

Yesterday, U.S. equities fell, dragged by retail stocks after Target’s (TGT) earnings disappointed (to remind, Target reported Q3 FY22 sales growth of 3.4% YoY to $26.52 billion, beating the consensus of $26.38 billion, while comparable sales increased 2.7% on top of 12.7% growth last year; however, its gross margin decreased by 3.3 percentage points to 24.7% and the company unexpectedly downgraded its sales forecast during the key holiday season).

In addition, a report from the U.S. Commerce Department showed October retail sales jumped more than expected, and that combined with comments from Fed officials raised concerns about how soon policymakers might revise their aggressive monetary policy to fight inflation. Also, an indicator of the U.S. home builder confidence sagged for the 11th consecutive month in November as high inflation and interest rates continue to negatively impact the market. The NAHB/Wells Fargo Housing Market Index (HMI) slumped five points to 33, the lowest level since June 2012 except during the onset of the Covid-19 pandemic in April 2020.

For the day, Target shares plunged 13%. The news caused a ripple effect across the sector, with shares of such names as Macy’s (M) and Kohl’s (KSS) tumbling. Another retailer, Advance Auto Parts (AAP), was the worst-performing stock in the S&P 500 after its earnings and revenue also missed estimates, and the company cut its FY profit forecast. Tech stocks also stumbled. Salesforce (CRM) shares sank 4%. Shares of Meta Platforms (META), Tesla (TSLA), and Intel (INTC) dropped 3%. Along with Intel, shares of Micron Technology (MU), Nvidia (NVDA), and other microchip companies declined.

Notwithstanding, Cisco Systems (CSCO) reported better-than-expected earnings for its fiscal Q1. The company said it sees FY revenue to be up 4.5% to 6.5% on a year-over-year basis. Full year earnings per share are expected to be in a range of $3.51 to $3.58 versus a consensus estimate of $3.53. Cisco shares gained 4.1% to $46.20 in today’s premarket.

Also today highly in focus, Wall Street expects Alibaba Group (BABA) to report quarterly EPS of $1.64 on revenue of $29.45 billion before the opening bell. Alibaba shares gained 1.14% to $79.05 in premarket at the time of writing.

European markets are trading also mixed today as investors focused on final hours of G-20 Summit in Indonesia, unabating geopolitics and a big budget announcement anticipated to come from Great Britain. As of 11:30 a.m. CET, the Stoxx 600 index rose just 0.23%, with sectors and major bourses pointing in opposite directions. Food and beverages stocks led gains at 0.3% while mining stocks fell 0.5%. Also, at the time of writing, the German DAX traded just 0.1% higher. However, the British FTSE 100 decreased by 0.47%, while the French CAC 40 fell by 0.5%. According to the European Commission's statistical office Eurostat, the seasonally adjusted production in the construction sector in the Eurozone increased by just 0.1% in September on a monthly basis.

The Asia-Pacific markets traded mostly lower earlier today with the Hong Kong’s Hang Seng Index falling 2.09% as Chinese technology stocks saw sharp losses after Tencent (0700.HK) announced to slash its over $20 billion-stake in Meituan. In mainland China, the Shanghai Composite fell 0.52% and the Shenzhen Component also fell 0.69%. Australia’s S&P/ASX 200 gained 0.19% to close at 7,136 as the nation’s unemployment numbers came in better than expected.

In Japan, the Nikkei 225 shed 0.35% to end the session 27,931 at while the Topix gained 0.15% to close at 1,966 as the country reported a trade deficit of $15.5 billion, bigger than forecasted in a Reuters poll. South Korea’s Kospi fell 1.14% and closed its session at 2,448.