Pre-Market Brief: Stocks See Support from Dovish Chinese Policy News

Morning Markets

Dec S&P 500 futures this morning are up by +0.21%.  Stocks are seeing support from a rally in Chinese stocks today on signs that China’s central bank may soon ease monetary policy.  In its quarterly report last Friday, the PBOC dropped language the precluded policy accommodation.  U.S. stock indexes also have strong seasonal support, with the week of the Thanksgiving Day holiday typically a strong time of year for stocks.  The markets will focus on President Biden’s nomination for Fed Chair after Punchbowl News reported this morning that the White House sometime today will announce who it will appoint for Fed Chair.  

The Euro Stoxx 50 index today is down by -0.27%.  European stocks gave up early gains today and turned lower on comments from German Chancellor Merkel, who called for tighter restrictions to stem the surge in new Covid infections and said the recent spike in infections “is worse than anything we’ve seen.”  She said the pandemic situation in Germany is “highly dramatic” and warned that hospitals would soon be overwhelmed.  European stocks had initially opened higher today on M&A activity after Ericsson said it would purchase Vonage and KKR & Co said it would acquire Telecom Italia SpA.

Stocks in Asia closed higher.  China’s Shanghai Composite index climbed to a 3-1/2 week high and closed up +0.61%.  Signs that China’s central bank will soon ease monetary policy lifted Chinese stocks today.  In its quarterly monetary policy report published Friday, the PBOC removed language cited in previous reports, including “normal monetary policy” and “to control the value on the money supply.”  The removal of the hawkish language bolstered speculation the PBOC is close to easing its monetary policy.

Japan’s Nikkei Stock Index closed up +0.09%.  Strength in Japanese technology stocks lifted the overall market today on optimism the microchip shortage was easing.  The Sankei newspaper reported the Japanese government would earmark 774 billion yen ($6.8 billion) to bolster domestic chipmaking.  Also, Samsung said it would build a new chip plant in the U.S. 

Today’s data was bullish for stocks after the U.S. Oct Chicago Fed national activity index rose +0.94 to 0.76, stronger than expectations of 0.10.

Pre-Market U.S. Stock Movers

Moderna (MRNA) is up more than +2% in pre-market trading after the FDA and CDC endorsed extra doses of Covid vaccines for all adults 18 and up. 

Vonage (VG) surged +26% in pre-market trading after Ericsson announced it would acquire the company in a $6.2 billion deal.

Globalfoundries (GFS) climbed more than +4% in pre-market trading after Deutsche Bank initiated coverage on the stock with a buy recommendation.

CASI Pharma (CASI) rallied +17% in pre-market trading after CEO Wei-Wu He disclosed the purchase of 400,000 shares of his company’s stock in a regulatory filing. 

Astra Space (ASTR) soared more than +30% in pre-market trading after it said its LV007 rocket reached orbit.

Activision Blizzard (ATVI) is down nearly -2% in pre-market trading after MKM Partners downgraded the stock to sell from neutral.

Progyny (PGNY) slid nearly -2% in pre-market trading after Citigroup cut its recommendation on the stock to neutral from buy. 

Aurinia Pharmaceuticals (AUPH) tumbled -14% in pre-market trading after it filed for an at-the-market offering of up to $250 million in shares via Cantor Fitsgerald.

Today’s U.S. Earnings Reports (11/22/2021)

Agilent Technologies Inc (A), Arrowhead Pharmaceuticals Inc (ARWR), Avaya Holdings Corp (AVYA), Central Garden & Pet Co (CENT), Cerence Inc (CRNC), Enanta Pharmaceuticals Inc (ENTA), IBEX Holdings Ltd (IBEX), Jack in the Box Inc (JACK), Keysight Technologies Inc (KEYS), Spire Inc (SR), Twist Bioscience Corp (TWST), Urban Outfitters Inc (URBN), Zoom Video Communications Inc (ZM).