US and European futures are trading higher today as bargain hunters have finally decided to step in to bag some bargains. The fact of the matter is that 2022 has been a great year for the US stock market as we saw inflation climbing to its 40-year high and the Fed increasing the interest rate at its most hawkish pace. However, despite all this, we have seen the economic data perform much better than expected.
This is certainly a factor that cannot be ignored, and it has told us one thing and one thing only, which is that the US economy is standing on solid footing. Yes, the concerns are there that going into 2023, we are likely to see a recession taking place in the US, which the Fed denies for the time being. But given the robustness of the economy and the resilience in the economic numbers, it is hard to anticipate a scenario under which we will see a massive and prolonged period of crisis in the US.
In terms of stock news, we saw Nike coming out of the gates swinging with signs of victory yesterday. The company reported results that easily topped Wall Street estimates, and it also raised its outlook. Nike was able to clear most of its hefty inventory, which was a concern for many traders given the fact that we are going through a time where the cost of living crisis is a major factor.
Nike reported earnings per share of 85 cents against the forecast was 64 cents, and it produced a revenue of $13.32 billion against the forecast of $12.57 billion. The net income came in at 1.33 billion or 85 cents per share which was a completely smashing number.
Nike beating all Wall Street estimates is certainly a big deal but what is the most encouraging sign for investors and traders in the earnings report was that the company has been successful in getting rid of inventory while other retailers have not.
FedEx was another stock that made a lot of noise in after-market hours yesterday. The company’s stock soared over 3% yesterday as it was able to comfortably beat market expectations. However, it did fall short of expectations in its revenue numbers.
US Stock Market
The Dow Jones Industrial Average increased by more than 92 points, which is equivalent to a roughly 0.3% gain. The S&P 500 index advanced by 0.1%, while the Nasdaq Composite index managed a marginal advance of 0.01%. The three main market indexes ended their losing streaks of four consecutive days, which gave investors renewed optimism for a strong finish to the year’s trading.
Investors are awaiting the release of yet another batch of statistics on Wednesday morning, starting with the weekly assessment of countrywide home loan applications published by the Mortgage Bankers Association (MBA). Traders will also get updates on statistics about consumer confidence and sales of previously owned homes.
There are still some major companies that need to disclose their profits before the holiday break for Christmas. On Wednesday, Rite Aid and Cintas will announce their earnings before the opening bell. Following the completion of the bell, Micron will report.
Brent and Crude oil prices have started to record more encouraging price action for the past two consecutive days. Traders are certainly more comfortable about the future oil demand. The weakness in the dollar index is helping the price, but mainly it is about the demand equation, which traders believe is likely to remain solid as the recession is likely to be a mild one.