Futures Extend Blowout Rally With Nvidia Rallying For Record 11th Day But Retail Sales Can Spoil The Party

Wall Street looks set to add to Tuesday’s blistering post-CPI rally as futures gained and world stocks surged. As of 7:50am, S&P 500 contracts are up 0.4% reaching a new 2-month high after the index ended Tuesday with its biggest advance since April; mood was also lifted by progress in Congress on a avert a government shutdown and pass a temporary funding bill while investors welcomed cooler-than-expected inflation readings in the UK as evidence that central banks may be done with their aggressive interest-rate increases. Europe’s Stoxx 600 Index jumped, led higher by consumer product and mining stocks, MSCI’s Asia Pacific Index jumped over 2%, with all markets in the green.

In premarket trading, retailers are broadly higher after Target reported adjusted earnings per share for the third quarter that beat the average analyst estimate and a decline in comparable sales that was less steep than expected. Target climbs as much as 15% premarket. Walmart rises 1.3% premarket, Dollar Tree +2.4%, Dollar General +2.2%, Best Buy +1.2% and Costco Wholesale +0.8%. Here are some other notable premarket movers:

  • Nvidia shares edge 0.7% higher, set to extend gains for a record 11th consecutive session. The stock has climbed 22% during its latest rally as of the last close, adding about $219 billion in market value.
  • Canadian Solar shares drop 1.8% after the solar module maker is downgraded to underweight from neutral at JPMorgan following Tuesday’s disappointing guidance, with the broker saying near-term visibility needs to improve.
  • Advance Auto falls about 5% after cutting its earnings per share guidance for the full year.
  • Arcturus Therapeutics rises 19% after reporting results and saying it should now have enough cash resources to last until the end of 2026.
  • Catalent rises 5% after reaffirming its adjusted Ebitda forecast for the full year.
  • Goodyear Tire & Rubber gains 8.6% after the company said it’s actively pursue strategic alternatives for its chemical business, the Dunlop brand and the off-the-road equipment tire business.
  • Varex Imaging slips 9.8% after the maker of X-ray equipment posted disappointing fiscal 4Q revenue and provided a 1Q profit and sales outlook that fell short of expectations.
  • ZIM Integrated Shipping falls 8% after cutting its adjusted Ebitda guidance for the full year.

Attention now turns to today’s data on US retail sales and producer prices for further confirmation that an economic slowdown will allow the Federal Reserve to stop tightening monetary policy. Fed swaps indicate the odds of another hike have fallen to almost zero — with the market pricing in a 50 basis-point rate cut by July.

“If the Fed is done hiking interest rates, there’s a sense of relief out there that this big headwind to market appreciation is being removed,” said Matt Stucky, chief equity portfolio manager at Northwestern Mutual Wealth Management. However, if upcoming data, including retail sales, signal only a gradual economic slowdown, “what we’re likely to see is that the Fed continues to be on pause,” he added. 

Incidentally, the party may be about to end and a hangover is coming because according to BofA real-time credit and debit card spending data, a strong retail sales print is now on deck, which would spark renewed fears that the Fed may have to be hawkish for longer.

European stocks also jumped, rising for a third day, led by UK shares after data showed inflation slowed more than expected in October. The FTSE 100 adds 0.9% while the Stoxx 600 rises 0.6%, with Infineon and Delivery Hero leading gains and Alstom posting the steepest declines. London’s FTSE 100 index gained 1% and the pound slipped after UK inflation slowed more than forecast, a similar outcome to Tuesday’s reading of US prices. That news strengthened optimism that the Bank of England is also finished raising rates.

  • Infineon rises as much as 2.9% as analysts say the German chipmaker’s FY24 guidance is reassuring given tepid investor expectations, after peers from Texas Instruments to ON Semiconductor signaled demand weakness in chips used for industrial applications
  • Delivery Hero climbs as much as 8.7%, extending post-earnings gains into a second session and notching the biggest two-day rise since November 2022
  • Experian shares gain as much as 6%, the most intraday since February, after the credit-data agency reiterated its organic revenue forecast for the full year
  • Siemens Energy gains as much as 8.9% as the German renewable firm’s stronger 4Q free cash flow and lower net debt figures encourage investors and reduce the risk of a capital raise, according to Citigroup
  • Prosus rises as much as 4.9% to a session high in Amsterdam trading after Tencent reported better-than-expected net income. Shares of its parent Naspers also extend gains
  • Siemens shares gain as much as 1.1% after the German industrial giant announced the acquisition of 18% in Siemens Ltd. India for a purchase price of €2.1 billion
  • Compass Group shares rise as much as 2.2% after the foodservice company was raised to buy from hold at Deutsche Bank, which said it expects growth, quality and further returns
  • ALK-Abello jumps as much as 17%, the most since 2009, after the Danish allergy drugmaker reported a significant beat to its higher-margin tablet sales in the key European market, beating expectations on both Ebitda and EPS
  • SSE rise as much as 2.7% to the highest since July, after the UK utility reaffirmed its adjusted earnings per share forecast for the full year
  • Genuit gains as much as 8.4%, the most in six months, as analysts say the plastic-piping system manufacturer is delivering against its strategy despite a tough operating environment
  • Alstom falls as much as 14%, the most in a month, after the French train and rail manufacturer reported full 1H figures and a new liquidity-boosting plan
  • Woolworths falls as much as 5.8%, the most since March 2022, after the retailer released a 20-week trading update that analysts said shows slower sales growth

Earlier in the session, MSCI’s gauge of Asian stocks rose more than 2% as China stepped up economic support. The People’s Bank of China injected the largest amount of cash into the banking system since 2016, offering 1.45 trillion yuan ($200 billion) of cash through its medium-term lending facility.

  • Hang Seng and Shanghai Comp were underpinned after Chinese Industrial Production and Retail Sales topped forecasts, while sentiment was also supported by reports that China is mulling CNY 1tln of new funding to boost the housing market and after the PBoC conducted the largest MLF net injection in seven years.
  • Japan’s Nikkei 225 extended on gains after it gapped above the 33,000 level alongside the broad heightened risk appetite which helped markets shrug off disappointing preliminary Q3 GDP.
  • Australia’s ASX 200 was led higher by notable outperformance in real estate and tech following a decline in yields and with the index unfazed by the acceleration in the quarterly Wage Price Index.
  • India stocks posted the best day in 7 months; A key stock benchmark in India jumped the most since March, boosted by a rally in equities across Asia after soft inflation data in the US stoked optimism that the Federal Reserve’s rate hike cycle may be over. The NSE Nifty 50 Index rose 1.2% to 19,675.45 in Mumbai, while the S&P BSE Sensex rose 1.1% to 65,675.93. The MSCI Asia Pacific Index was up 2.3%, set for its best day this year.

In FX, the Bloomberg Dollar Spot Index is flat. The pound has struggled, falling 0.3% versus the greenback and is the worst performer among the G-10’s. Money-markets close to completely erased the possibility of an additional 25bps hike from the Federal Reserve in December and now only price 2bps of tightening by year-end

  • GBP/USD slumped as much as 0.4% to 1.2454, reversing three sessions of gains, after UK inflation slowed to the lowest level in two-years; Gilts twist-steepened
  • EUR/USD dropped as much as 0.3% to 1.0846, partly paring its biggest daily gain since November on Tuesday; the ECB’s Centeno said there are concerns over whether Europe will see a soft landing
  • NZD/USD rose as much as 0.5% to 0.6040, with the New Zealand dollar leading group-of-10 gains against the dollar, as cooling inflation on both sides of the Atlantic bolstered global risk appetite; European stocks markets rallied, while US equity futures rose

In rates, yields higher by 1bp-2bp across the curve, with 10-year yields rising 2bps to 4.47% with bunds and gilts outperforming by 2bp and 0.5bp in the sector following weaker than expected October UK CPI data; curve spreads are within 1bp of Tuesday close levels, 5s30s around 18bp after exceeding 22bp in CPI rally. The Dollar IG issuance slate empty so far; three names priced deals on Tuesday, bringing weekly total to less than $5b vs dealer forecasts of $25b to $30bn. US economic data includes October retail sales and PPI and November Empire manufacturing (8:30am) and September business inventories (10am). Scheduled Fed speakers include Barr (9:30am) and Barkin (3:30pm). An auction for UK government bonds attracted the biggest-ever orderbook for a conventional bond sale, as investors rushed to lock in high rates while they still can.

In commodities, oil prices decline, with WTI falling 0.5% to trade near $77.80 but off session lows . Spot gold rises 0.5%

Looking to the day ahead now, and data releases include US retail sales and PPI for October, UK CPI for October, and Euro Area industrial production for September. From central banks, we’ll hear from the Fed’s Barr and Barkin, along with the BoE’s Haskel. Lastly, earnings releases include Target, and the EU Commission will release their latest economic forecasts.

Market Snapshot

  • S&P 500 futures up 0.2% to 4,521.00
  • MXAP up 2.3% to 161.01
  • MXAPJ up 2.6% to 504.56
  • Nikkei up 2.5% to 33,519.70
  • Topix up 1.2% to 2,373.22
  • Hang Seng Index up 3.9% to 18,079.00
  • Shanghai Composite up 0.5% to 3,072.84
  • Sensex up 1.1% to 65,631.10
  • Australia S&P/ASX 200 up 1.4% to 7,105.90
  • Kospi up 2.2% to 2,486.67
  • STOXX Europe 600 up 0.6% to 455.37
  • German 10Y yield little changed at 2.58%
  • Euro down 0.3% to $1.0846
  • Brent Futures down 0.6% to $81.97/bbl
  • Gold spot up 0.4% to $1,971.77
  • U.S. Dollar Index up 0.23% to 104.29

Top Overnight News


A more detailed look at global markets courtesy of Newsquawk

Asia-Pac stocks followed suit to the global risk-on mood after softer-than-expected US CPI data spurred dovish Fed repricing amid hopes that the Fed could be done with its hiking cycle, while the region also digested better-than-expected Chinese activity data. ASX 200 was led higher by notable outperformance in real estate and tech following a decline in yields and with the index unfazed by the acceleration in the quarterly Wage Price Index. Nikkei 225 extended on gains after it gapped above the 33,000 level alongside the broad heightened risk appetite which helped markets shrug off disappointing preliminary Q3 GDP. Hang Seng and Shanghai Comp were underpinned after Chinese Industrial Production and Retail Sales topped forecasts, while sentiment was also supported by reports that China is mulling CNY 1tln of new funding to boost the housing market and after the PBoC conducted the largest MLF net injection in seven years.

Top Asian News

  • PBoC announced CNY 1.45tln in 1-year MLF vs CNY 850bln maturing with the rate kept at 2.50%.
  • China’s stats bureau official said the foundation of the economic recovery is yet to be consolidated and noted expectations that China’s price situation to improve with no deflation seen. The stats bureau also said there will be twists and turns in the economic recovery with more efforts needed to promote continued economic recovery and that China’s manufacturers still face inadequate market demand. However, the official also commented that the property market is still in adjustment and transformation, while they expect consumption recovery to continue due to policy support and there is still strong demand for infrastructure investment.
  • US President Biden and Chinese President Xi will meet on Wednesday at 10:45PST (18.45GMT/13:45EST) and Biden will hold a press conference at 16:15PST (00:15GMT/19:15EST)
  • US President Biden said US and Chinese militaries need to be able to make contact and the US is trying to improve bilateral relations with China.
  • US and China reaffirmed their commitment to the Paris Agreement and agreed to restart the energy efficiency forum, while they will work together on a global and legally binding agreement to tackle plastic pollution.

European bourses are in the green, Euro Stoxx 50 +0.6%, with support across the board for benchmarks in a continuation of Tuesday’s trade with further impetus from favourable Chinese activity data. Sectors are mixed, with Telecom & Healthcare names underperforming while Consumer Products/Services perform well given their exposure to China. Stateside, futures are in the green with the NQ +0.5% continuing its outperformance despite a very modest uptick in US yields this morning.

Top European News

  • ECB’s Centeno says must be patient with policy. Inflation is falling faster. Data shows the global inflation is falling. Still expects a “good” inflation print for November. Do not see reasons to accelerate APP QT, via Bloomberg TV.
  • German Constitutional court rules that the transfer of unused pandemic debt into climate fund is illegal (Second Supplementary Budget Act 2021 is void). “The Court’s decision means that the volume of the Climate and Transformation Fund is reduced by EUR 60 billion. Insofar as the state has entered into obligations that it can no longer service as a result of this reduction, the legislator must compensate for this through other means.”. Click here for details, analysis & reaction.
  • EU Commission sees EZ GDP growth at 0.6% in 2023 (prev. 0.8%), 1.2% 2024 (prev. 1.3%); Sees EZ inflation in 2023 at 5.6% (prev. 5.6%); Says ECB interest rates and weaker external demand took heavier tool on EZ growth than expected.


  • DXY is relatively contained after hovering in a tight 104.04-22 band in APAC and early European hours, before eking fresh highs of 104.31 after yesterday’s post-US CPI low of 103.99.
  • GBP/USD slipped from a 1.2499 high set overnight to a post-UK CPI low of 1.2458 at the time of writing, well within yesterday’s 1.2261-2505 parameter; EUR/USD holds onto a lion’s share of yesterday’s gains with large FX options expiries near the money.
  • Largely flat intraday trade in the Yen and Yuan, with the latter retracing the strength seen on the release of better-than-expected Chinese activity data overnight despite a lack of pertinent headlines in the European morning ahead of the Biden-Xi meeting.
  • The non-US Dollars see a mixed picture with the NZD outperforming, the AUD flat and the CAD lagging.
  • PBoC set USD/CNY mid-point at 7.1752 vs exp. 7.2564 (prev. 7.1769).

Fixed Income

  • Core fixed income began the session in the green and towards the best levels printed on Tuesday in the wake of cooler than expected US CPI.
  • However, as the morning progresses and we near the commencement of US trade benchmarks have slipped from best within Europe, a move that is seemingly UST led in a slight paring of Tuesday’s significant action.
  • Cooler UK CPI drove Gilts above 97.00; though, alongside a broader pullback in benchmarks Gilts have lost the level and reside towards the 96.58 low.
  • Bunds received a circa. 15 tick boost on the German Constitutional Court ruling that the transfer of circa. EUR 60bln of unused COVID debt into the climate fund is illegal; though, the move was shortlived given the FY implications are limited between now and FY27.


  • WTI Dec and Brent Jan are softer intraday after settling relatively flat yesterday despite the softer inflation data and subsequent slide in the Dollar.
  • As a reminder, the US weekly EIA data will be released in two parts today to account for last week’s data blunder – last week’s data will be released at the usual time of 15:30GMT/10:30EST whilst this week’s data is slated for 18:00GMT/13:00EST.
  • Spot gold topped yesterday’s USD 1,971/oz high around the time European cash markets opened, and irrespective of Dollar strength ahead of the Biden-Xi meeting on the sidelines of the APEC summit, with the yellow metal eyeing the 7th November peak at 1,978.36/oz.
  • Base metals are firmer across the board following the upbeat Chinese activity data overnight, with 3M LME copper gaining ground above USD 8,250/t
  • US Private Energy Inventory Data (bbls): Crude +1.3mln (exp. +1.8mln), Cushing +1.1mln, Gasoline +0.2mln (exp. +0.6mln), Distillates -1.0mln (exp. -1.2mln)
  • Vitol said its expects a fairly balanced to slight surplus in the global oil market for 2024, while it added that non-OPEC supply has surpassed previous highs and continues to grow. Furthermore, it stated that it is premature to call for peak gasoline demand in China as gasoline car sales are still being added to the fleet.


  • Israel conducted an operation against Hamas in Gaza’s Al Shifa hospital and it noted that its forces had undergone specified training to prepare for the complex and sensitive environment, while it called on all Hamas operatives in the hospital to surrender.
  • US, South Korean and Japanese foreign ministers said Russia-North Korea cooperation is a serious threat to international peace, while it was also reported that North Korea developed a new type of solid-fuel engine for intermediate-range ballistic missiles, according to KCNA and Yonhap
  • EU Commission has reportedly suggested fresh sanctions on Russia, via Politico citing documents; introducing a ban on diamonds and tightening other measures incl. oil price cap.

US Event Calendar

  • 08:30: Oct. Retail Sales Advance MoM, est. -0.3%, prior 0.7%
    • 08:30: Oct. Retail Sales Ex Auto MoM, est. -0.2%, prior 0.6%
    • 08:30: Oct. Retail Sales Ex Auto and Gas, est. 0.2%, prior 0.6%
    • 08:30: Oct. Retail Sales Control Group, est. 0.2%, prior 0.6%
  • 08:30: Oct. PPI Final Demand MoM, est. 0.1%, prior 0.5%
    • 08:30: Oct. PPI Final Demand YoY, est. 1.9%, prior 2.2%
    • 08:30: Oct. PPI Ex Food and Energy YoY, est. 2.7%, prior 2.7%
    • 08:30: Oct. PPI Ex Food and Energy MoM, est. 0.3%, prior 0.3%
  • 08:30: Nov. Empire Manufacturing, est. -3.0, prior -4.6
  • 10:00: Sept. Business Inventories, est. 0.4%, prior 0.4%

Central Bank Speakers

  • Nov. 14-Nov. 15: Fed’s Philip Jefferson and SNB’s Thomas Jordan Speak in Zurich
  • 09:30: Fed’s Barr Testifies on Oversight of Financial Regulators
  • 15:30: Fed’s Barkin Speaks About Housing

DB’s Jim Reid concludes the overnight wrap

What a difference a tenth of a percentage point makes as markets have staged a remarkable rally across the board after the US CPI release. A (small) downside surprise led to increasing confidence that the Fed were done hiking rates, and that a cut was now more likely than another hike. Will this be seventh time lucky in this cycle in terms of pricing a dovish pivot? The other 6 have failed to materialise and although one will obviously do so at some point, is this it? The market thinks so and front-end Treasury yields saw their biggest daily decline since the banking turmoil in March, with the 2yr yield down by a massive -19.9bps on the day. And the prospect of lower rates proved great news for equities as well, with the S&P 500 (+1.91%) posting its strongest advance since April with the Russell 2000 (+5.44%) having its best day for over a year. Watch out for US retail sales today and the Xi-Biden meeting at around 7pm London time with a press conference 11:15pm London time.

When it came to the details of the CPI release, the main headline was that CPI came in at +0.0% in October (vs. +0.1% expected), whilst core CPI also surprised on the downside at +0.2% (vs. +0.3% expected). In turn, that meant the year-on-year CPI fell back to +3.2% (vs. +3.3% expected), and core CPI fell back to a two-year low of +4.0% (vs. +4.1% expected). So lots of positive momentum from the Fed’s perspective. Lower gasoline costs were a big part of the reduction, which fell -5.0% on the month, whilst shelter inflation (+0.26%) saw its joint-slowest print over the last two years as well. The most surprising areas of weakness relative to our econ team’s forecasts were lodging away from home (-2.4%) and airfares (-0.9%), whilst new vehicles (-0.1%) fell despite the workers strike. On airfares, today’s PPI component for this category feeds directly into core PCE so it is arguably more important for the Fed; and we’ll see if it confirms or contradicts the trend. Most other components were in line. For an in-depth review and breakdown of the inflation release see our economists’ note here.

With the weaker CPI print, investors moved to significantly pare back the likelihood of another rate hike in this cycle. For instance, futures had put the likelihood of another hike at 30% just before the CPI release, but by the close that had been priced out altogether. Instead, they moved to ratchet up the likelihood of a cut, with the prospect of a cut by May soaring from 23% on Monday to 86% by yesterday’s close. Today’s retail sales will be the next print to look out for, but remember that there’s still another jobs report and CPI report before the Fed’s next decision in December, so plenty of time for those numbers to shift in either direction. Richmond Fed President Barkin also struck a cautious note, saying that “I’m just not convinced that inflation is on some smooth glide path down to 2%”. Chicago Fed President Goolsbee indicated that while people are “coming back to the job market” there is still a ways to go. He pointed to housing costs as a key focus going forward, and added that “commercial real estate remains an area of concern.”

With investors pricing in a growing likelihood of rate cuts for 2024, US Treasuries rallied sharply across the curve, whilst the dollar index (-1.49%) weakened to its lowest closing level since August. In fact, the decline in the 2yr Treasury yield (-19.9bps) was the biggest since 22nd March, during the banking turmoil, back when there was a similar expectation in markets that the Fed could well have finished its rate hikes. The 10yr yield also saw a similar decline of -19.3bps, which was just smaller than on November 1, when we had another big rally thanks to the dovish-leaning FOMC outcome, along with the quarterly refunding announcement and the weak ISM manufacturing print. That said, it meant the 10yr yield closed at 4.447%, which is its lowest closing level since September. On a relative basis US yields are quiet in Asia moving just less than a basis point lower across most of the curve .

That bond rally was mirrored by a similar surge in equities, which saw the S&P 500 (+1.91%) post its strongest daily performance since April. In fact, even though we’re only half-way through November, the S&P 500 is now on track for its best monthly performance of 2023 so far, having risen by +7.20% since the start of the month .

Yesterday’s advance was incredibly broad-based, with every sector moving higher on the day, whilst the total number of companies moving higher in the index (467) was the fourth-highest number of 2023 so far. In addition, it means the equal-weighted S&P 500 (+2.83% yesterday) is now back in positive territory on a YTD basis again. Meanwhile, the NASDAQ (+2.37%) hit its highest level since early August, having now risen nearly 12% in just two-and-a-half weeks. The Russell 2000 (+5.44%) had its best day in just over a year and has now risen +9.86% over the last two-and-a-half weeks, but remains down -10.2% from its YTD highs from back in July .

In the meantime, sentiment was further boosted by growing hopes that a US government shutdown would be avoided, with the deadline now less than 72 hours away as we go to print. Last night saw the House vote on Speaker Johnson’s proposal pass with a 209-127 margin as it was voted on in an expedited process that required a two-thirds majority. Senate Majority Leader Schumer was “heartened” by the proposal and said he and Minority Leader McConnell “will figure out the best way to get this done quickly” as the bill moves to the Senate. The proposal would fund some parts of the government through Jan 19 and others until the first week of February .

Over in Europe, markets also performed very strongly yesterday, with bonds and equities rallying across the board. That meant yields on 10yr bunds (-11.3bps), OATs (-13.0bps) and BTPs (-15.3bps) all saw sharp declines, whilst the STOXX 600 also surged by +1.34%. Here in the UK, gilts saw a particularly strong rally, with 10yr yields down -16.2bps following the latest employment data. That showed that total wage growth was running at +7.9% in the three months to September, down from 8.2% in the three months to August. Furthermore, vacancies fell to 957k in the three months to October, which is their lowest in over two years. The UK CPI release is out shortly after we go to press, so that’ll be another one to look out for.

Asian equity markets have also surged this morning with the Hang Seng (+2.95%) leading gains, with the Nikkei (+2.54%) and the KOSPI (+1.96%) also soaring. China stocks are lagging behind a bit, possibly due to strong data (more below, reducing stimulus possibilities. The CSI (+0.67%) and the Shanghai Composite (+0.45%) are still higher though. S&P 500 (+0.30%) and NASDAQ 100 (+0.34%) futures are seeing the positive momentum continue.

Coming back to China, data showed that economic activity in the world’s second biggest economy perked up last month with industrial output growing +4.6% y/y in October (v/s +4.5% expected), recording its strongest growth since April while retail sales advanced +7.6% y/y in October (v/s +7.0% expected) and seeing the fastest growth since May. It accelerated from a +5.5% gain in September. This was accompanied by the PBoC injecting a net CNY600bn, despite leaving the one-year medium-term lending facility (1Y MLF) at 2.5%. Meanwhile, fixed asset investment for the first 10 months of the year grew by +2.9% from a year ago, missing market expectations for a +3.1% increase.

Elsewhere, Japan’s economy shrank at its fastest annualised quarterly pace in two years in the July-September period, contracting -2.1% (v/s -0.4% expected) after expanding by a revised +4.5% in Q2 as domestic inflation weighed on consumer demand. See our Japanese economists’ review of the surprise here.

To the day ahead now, and data releases include US retail sales and PPI for October, UK CPI for October, and Euro Area industrial production for September. From central banks, we’ll hear from the Fed’s Barr and Barkin, along with the BoE’s Haskel. Lastly, earnings releases include Target, and the EU Commission will release their latest economic forecasts.





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