US futures are mixed, with the Nasdaq lagging as the post-midterm rotation out of chipmakers and the AI complex enters a second day, after the Democratic sweep raised fears of a data center backlash, Qualcomm tumbled on a weak forecast and the Kospi crashed almost 6%, while oil rebounded modestly from Wednesday's plunge and the BoE hiked rates for the first time in three years; as a result the 10Y yield touched 4.83%, the lowest since Sept. 10.
As of 6:20am ET, S&P futures are 0.1% higher while Nasdaq futures are down 0.5%, Russell 2000 futures add 0.
4% and Dow futures are 0.7%; this follows Wednesday's session when the S&P jumped 1.6% for its best day since August and the Dow soared 3%.
In premarket trading, semis are again getting hit (the SOXX ETF was down 2% premarket per Bloomberg) with Qualcomm sliding 10% after a lackluster forecast, continuing the hyperscalers vs semis split we flagged yesterday, while the Mag 7 is mixed with Amazon and Meta higher and Tesla and Nvidia lower; AppLovin soars 16% on blowout guidance. The day's driver is the blue wave (again): with Democrats set to control both chambers, traders are pricing tighter regulation of data centers (Goldman sees moratoria potentially hitting about 45% of planned US data centre capacity expansion), a quicker end to the Iran war and less fiscal largesse, which is why hyperscalers that own compute are bid and everything that builds, powers or supplies it is offered. Treasuries are extending their rally, with the 10Y at 4.
87% after earlier touching 4.83%, as the midterm result fuels expectations that the administration's tax and spending plans will be contained and after the Treasury's refunding hinted at less long-end issuance. The dollar is flat after its worst day in two months, cable erased losses after the BoE hiked 25bps to 4% in an 8-1 vote (Mann wanted 50bps) and Bailey warned it was unlikely to be the last hike unless the Iran war is resolved.
In commodities, Brent rebounds 1.6% to $96.15 after crashing almost 9% on Wednesday, as Iran claims tankers hit mines near Hormuz and Ukraine struck Russia's Ryazan refinery; gold extends its post-midterm rally above $4,100 and silver trades around $52.
7. Bitcoin is little changed. US economic data slate includes Challenger job cuts (already out: 43,994 in October, down 71.
3% y/y), initial jobless claims, Q3 nonfarm productivity and unit labor costs (all 8:30am ET). Fed speaker slate includes Hammack (8:50am), Barkin (9:10am) and Logan (7:00pm). The Treasury sells $115bn of 4-week and $110bn of 8-week bills at 11:30am.
In premarket trading, Mag 7 stocks are mixed: Elon Musk-led stocks are set to extend declines after the electric-carmaker and SpaceX lost a combined $130 billion in market value Wednesday following Democrats’ lanslide win. Tesla (TSLA) -2%, Amazon (AMZN) +1.6%, Meta Platforms (META) +1%, Alphabet (GOOGL) +1.
2%, Apple (AAPL) +0.7%, Microsoft (MSFT) -0.06%, Nvidia (NVDA) -1.
3%Adma Biologics (ADMA) is up 20% after the biotech boosted its adjusted Ebitda guidance for the full year.Albemarle (ALB) rises 3% after the lithium producer reported third-quarter adjusted earnings per share that beat the average analyst estimate as energy storage and specialties segments benefited from higher pricing.AppLovin (APP) is up 19% after the mobile-app marketing company’s third-quarter results beat expectations and it gave an outlook that is above the analyst consensus estimate.
Caris Life Sciences (CAI) slumps 14% after providing results and guidance; analysts note a lack of volume upside for the fourth quarter as a key concern.Cava (CAVA) sinks 8% on concern the company’s momentum is slowing despite the popularity of new dishes such as salmon bowls and barbecue pita chips.Celsius (CELH) rises 6% after the energy drink’s revenue and adjusted Ebitda for the third quarter handily beat Street estimates.
Dutch Bros (BROS) falls 14% after the coffee chain cut its adjusted Ebitda forecast for the full year.Expedia (EXPE) is down 6% after the online travel agency provided guidance, with the midpoint of its fourth-quarter gross bookings forecast trailed the average analyst estimate,Elf Beauty (ELF) climbs 5% after the cosmetics company boosted its net sales forecast for the full year.Fastly (FSLY) falls 13% after the cloud-platform provider posted quarterly results and provided guidance.
Goodyear Tire (GT) falls 4% after third quarter results disappointed.LegalZoom (LZ) tumbles 17% after posting third quarter results and a fourth quarter forecast.Molson Coors (TAP) falls 4% after the company cut its annual guidance for EPS and net sales, citing persistent softer global beer industry trends.
MNTN (MNTN) falls 45% after the advertising and marketing platform posted disappointing third-quarter results and appointed a new CEO.Nike (NKE) is down 1% after Truist Securities downgrades the stock to sell, saying the company has “risks across the portfolio and an inflated valuation.”Sezzle (SEZL) climbs 28% after financial technology company posted third quarter results.
Sunrun (RUN) rises 24% after the solar company reported third-quarter revenue that beat the average analyst estimate. Analysts also note that free cash flow is expected to improve in 2027.Tapestry (TPR) gains 11% after the accessories company’s first-quarter results topped Wall Street expectations, and management boosted its annual guidance, as well as its capital returns projection.
Veracyte (VCYT) tumbles 31% after the diagnostics company’s full-year revenue forecast fell short of Wall Street estimates.Wendy’s (WEN) slips 1% after the company rejected the takeover proposal from a Trian Partners-led group.Zillow (Z) falls 14% after the digital real estate company reported adjusted earnings per share and revenue for the third-quarter that missed the average analyste estimate.
In other corporate news, the AI capex hangover continues to spread: Micron paused work on a $4.5 billion Taiwan chip plant after a labor row, and China blocked the roughly $5.4 billion sale of ABB's robotics unit to SoftBank.
Meanwhile the hyperscalers that "won" the election are busy raising cash anyway: Meta raised €9 billion in its first euro bond on a record €53 billion of orders, and Microsoft raised $25 billion in a 10-tranche bond offering. Goldman and Apollo are in talks with investors to start selling portions of a roughly $40 billion chip financing deal for SpaceX, and Apple is cutting employee budgets for AI usage as part of a cost-cutting effort. Wendy's rejected a takeover proposal from a Trian Partners-led group; DTE Energy agreed to sell its DTE Vantage business for about $3 billion; SS&C priced an upsized $1.
05 billion of convertible notes.The global framing is unchanged from yesterday: the midterm-fueled rotation out of the AI trade is entering a second day, with previously unloved markets and economically sensitive stocks outperforming at the expense of chipmakers. Asia took the semi pain overnight, with the Kospi tumbling almost 6% (and triggering a trading halt) as SK Hynix and Samsung slumped, while Hong Kong was the other side of the trade, with the Hang Seng Tech index up more than 5%.
Europe, the market with the least AI in it, extended its outperformance with the Stoxx 600 surpassing its August closing record.“Chip names are under pressure because traders see Democrats as bad news for data centers and thus demand for compute,” said Hao Hong, chief investment officer at Lotus Asset Management. “Some money is rotating into consumer names in Korea, China and elsewhere now.
”As Bloomberg's Jan-Patrick Barnert notes, Wednesday's post-vote bounce was fairly ordinary by historical standards: the Dow jumped 3%, the S&P rose 1.6% and the Nasdaq 100 closed up just 0.9% after rising as much as 2.
3%, while semis fell 3.1%, energy lost 4.8% and a Goldman basket of AI data-center names sank 5.
4% on a day consumer discretionary stocks gained 6.1% (as we noted yesterday). In other words, a typical bounce in a market that i