Nvidia Earnings, Jobless Claims, Sliding Oil - What's Moving Markets

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By Geoffrey Smith 

Investing.com -- There are jobless claims and Federal Reserve speakers galore - and an auction of inflation-linked Treasury bonds to look out for in your daily check on the outlook for U.S. interest rates. China takes a step forward to clear up one of the biggest messes in its real estate sector, India's payments champion suffers an embarrassing fall on its market debut, and Nvidia (NASDAQ:NVDA) is set to lead U.S. stocks higher at the open. Oil continues to weaken on talk that the world's biggest consumers will coordinate a release of strategic reserves. Here's what you need to know in financial markets on Thursday, 18th November. 

1. Jobless claims, TIPS auction and Fed speakers galore 

It’s a busy day for those trying to track the evolution of the Federal Reserve’s thinking on interest rates. The regional presidents from Chicago, New York, San Francisco and Atlanta will all speak during the day, and will have the opportunity to comment on the 30-year high in inflation and the latest weekly jobless claims data which are due out at 8:30 AM ET (1330 GMT). Analysts expect initial claims to edge down to a new post-pandemic low of 260,000.

On Wednesday, JPMorgan (NYSE:JPM) had joined Goldman Sachs (NYSE:GS), Citigroup (NYSE:C) and Morgan Stanley (NYSE:MS) in shifting its house view on the coming tightening cycle. JPM now sees the first interest rate hike coming in September next year.

There may also be more interest than usual on the Treasury’s auction of inflation-protected 10-year notes at 1 PM ET, given that yields on such paper have fallen close to all-time lows recently.

2. China's National Team set to bail out Huarong 

China stepped up its efforts to stop the slow-motion train wreck in its real estate sector from accelerating.

China Huarong Asset Management, a specialist investor in distressed debt, will be recapitalized with an injection of up to $6.6 billion from a handful of state-backed financial institutions including Citic and China Life. That will dilute the Finance Ministry’s directly-held stake below 50%.  It will also sell its 40.53% stake in Huarong Xiangjiang Bank and an 80% stake in Huarong Financial Leasing.

The recapitalization represents further progress in stabilizing the vehicle that holds a lot of the most toxic developer debt in China. Huarong’s former chairman was executed in January for financial crimes.

3. Stocks set to open higher, boosted by Nvidia

U.S. stocks are set to open higher later, recouping some of the losses of Wednesday that followed another unsettling batch of retail earnings.

By 6:20 AM ET, Dow Jones futures were up 77 points, or 0.2% at 36,007 points, while S&P 500 futures were up 0.4% and Nasdaq 100 futures were up 0.6%.

Stocks likely to be in focus later include Nvidia, whose buoyant forecast for the coming quarters after the bell on Wednesday is one of the main reasons for the turn in sentiment. Going the other way is likely to be Cisco Systems (NASDAQ:CSCO), whose problems with supply chain and other input cost issues were only too visible in its quarterly report.

Intuit (NASDAQ:INTU) and Advanced Materials lead a much-diminished earnings roster Thursday – and both of them report late.

4. India's Paytm flops in massive IPO

Maybe somebody does ring a bell at the top of the market in other countries. India’s largest domestic fintech, Paytm, fell 27% on its debut overnight, amid concerns about valuation, its unclear path to profitability and the willingness of early backers such as SoftBank (OTC:SFTBY) and Ant Group to sell down their stakes.

It’s the latest, and by some way the biggest, company to fall flat on its debut in Mumbai, although a series of expensive IPOs still hasn’t derailed the benchmark SENSEX index, which is still only 5% off last month’s record high. 

India’s stock market has risen some 50% in the last 12 months as the country has defied doomsayers to overcome the Covid-19 epidemic. Case numbers have not picked up in recent weeks, despite signs of a fresh wave further east in Asia and, increasingly, in Europe and North America. 

Despite the weak debut, Paytm was still valued at around $15 billion at the close of trade.

5. Oil weakens again on talk of coordinated reserve release 

Crude oil prices continued to ease after Chinese authorities confirmed that they have been examining the possibility of a coordinated release of strategic petroleum reserves to dampen high prices.

By 6:30 AM ET, U.S. crude futures were down 0.1% at $77.13 a barrel, while Brent was down 0.1% at $80.24 a barrel.

Prices had fallen to their lowest in six weeks overnight, despite data from the U.S. government showing a surprisingly sharp drop in both crude and gasoline inventories last week.