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Futures Rise With Inflation Data Due; Tesla, Lululemon In Focus

Dow Jones futures rose modestly Friday morning, along with S&P 500 futures and Nasdaq futures, with a wholesale inflation report due.




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The stock market rally bounced somewhat Thursday, with the Nasdaq rebounding from near its 50-day moving average. But the major indexes only recouped a fraction of recent losses, with the S&P 500 still some distance from its 200-day moving average.

Apple (AAPL) chipmaker Taiwan Semiconductor (TSM), Boeing (BA), Tesla (TSLA), China EV maker Li Auto (LI), United Airlines (UAL), Lululemon Athletica (LULU) and Broadcom (AVGO) were all in focus Friday morning.

Taiwan Semiconductor reported strong November revenue growth, despite Apple iPhone production issues. Boeing is set to announce a major jet sale to United Air. There are further reports of Tesla production cuts in China. EV startup Li Auto reported mixed Q3 results, but sees booming December deliveries. Lululemon gave weak holiday guidance while Broadcom beat views and guided higher for the current quarter.

Dow Jones Futures Today

Dow Jones futures xx% vs. fair value. S&P 500 futures xx%. Nasdaq 100 futures xx%.

The Labor Department will release the November producer price index at 8:30 a.m. ET. The PPI inflation report should show a significant decline in overall and core wholesale inflation. But goods prices are clearly cooling.

The Federal Reserve’s focus has been on service prices. The November CPI report is set for Dec. 13, with the year-end Fed meeting decision on Dec. 14.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.


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Key Earnings

Broadcom earnings and revenue were better than expected. The chip-and-software giant also guided high on current-quarter revenue and raised its AVGO stock dividend. AVGO stock rose modestly before the open, signaling a move back above its 200-day line.

Lululemon earnings topped views as well. But the yoga apparel marker and retail guided slightly lower on the key holiday quarter. LULU stock tumbled before the open, signaling a retreat below a buy point.


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Tesla Stock

Tesla Shanghai will suspend Model Y production in the last month of the year, producing just 20,000 Y crossovers in the last three weeks of the December, Reuters reported Friday. That would be about half Shanghai’s typical Model Y output over that span. That comes amid widespread reports of production cuts, shorter shifts at Tesla’s largest assembly plant.

A big Shanghai expansion finished in August, but Tesla backlogs have gone to zero. Tesla cut prices in late October and announced a series of discounts and incentives to boost demand before government subsidies end Dec. 31.

Tesla stock rose slightly Friday morning. TSLA stock is down more than 10% this week, just above bear market lows.


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Li Auto Stock

Li Auto reported a wider-than-expected third-quarter loss while revenue growth came up short. The maker of SUV hybrids faced Covid-related issues as well as a changeover to newer models.

But Li Auto is revving up production and deliveries. It sees Q4 deliveries of 45,000-48,000 hybrids. Li Auto delivered 10,052 and 15,034 units in October and November. So that implies December deliveries of 19,914-22,914.

Li Auto stock was little changed before the open after initially falling on results. LI stock has been rebounding with other China makers and Chinese stocks generally over the past few weeks.

Apple Chipmaker Taiwan Semiconductor

Taiwan Semiconductor reported November revenue leapt 50% vs. a year earlier to $7.27 billion, bucking the slowdown in much of the semiconductor space Taiwan Semi is the world’s largest contract chipmaker, making chips for other companies including Apple, Nvidia (NVDA) and Qualcomm (QCOM).

Apple iPhone production has been hurt due to Covid lockdowns and unrest at Foxconn’s massive assembly plant in China. China Covid restrictions are easing, with Foxconn ending the “closed-loop” operation at the iPhone plant.

TSM stock rose 1% before the open, near its 200-day line. Apple stock edged higher.

Boeing-United Airlines Deal

Boeing and United Airlines late Thursday said they planned a “historic announcement” on Tuesday. That seemed to confirm a recent Wall Street Journal report that United Airlines would order dozens of 787 Dreamliner jets.

Boeing stock was not yet trading early Friday, while United Airlines stock edged higher. BA stock closed in buy range, while UAL stock is just below a buy point.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.

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