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Pre-Markets Open Green to Close Out Flat Week

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We close out this eventful week with pre-market futures in the green across the board: the Dow is +230 points at this hour, the S&P 500 is +35 and the Nasdaq +120 points aheads of the bell. The smoke continues to clear on big-box retailers having reported Q3 earnings, and economic prints continue the narrative, for the most part, that the economy remains on a slow trajectory toward lower inflation metrics. Major market indices are flat over the past five trading days, with the exception of the small-cap Russell 2000, which is down -2.5%.

Next week is Thanksgiving Week, which typically brings us lower trading volume and, to the extent we do have important economic prints and earnings reports, we usually see these packed into the first three trading days. Markets are also usually cut to a half day on the Friday after Thanksgiving, aka “Black Friday,” which is typically the busiest day for most retailers catering to holiday shopping season.

Speaking of retailers, Foot Locker (FL - Free Report) put up impressive numbers this morning on its Q3 earnings report: coming in at $1.27 per share, earnings were +16.5% ahead of expectations for $1.09. Revenues in the quarter reached $2.17 billion, an improvement over the Zacks consensus by +2.73%. Though the specialty retailer carried a Zacks Rank #4 (Sell) rating into its earnings release, this marks Foot Locker’s 10th straight earnings beat, with a trailing 4-quarter average of +28%.

On the other side of the retail coin, Buckle (BKE - Free Report) missed estimates by a penny on its bottom line to $1.24 per share (two cents off the year-ago quarter’s $1.26 per share) on in-line revenues of $332.34 million in the quarter. Shares are still up +2%, as a result of after-market buying yesterday afternoon ahead of the Q3 report; the stock has rolled back a bit from those post-market highs. Buckle shares are now around -2% year to date.

We may continue to see further contagion related to the collapse of crypto exchange FTX in the coming week; with a dearth of meaningful news items for market participants ahead of the Thanksgiving holiday, this disaster, while it appears relatively contained to this point, does have the potential to absorb more oxygen in the trading days to come. This would suggest a downward bias in a market that clearly wishes to buoy higher on the idea that the Fed is close to the end of interest rate hikes.

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