Market Analysis

The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to move back to the upside after coming under pressure over the course of the previous session.

Early buying interest may be generated in reaction to some upbeat earnings news, with Disney (DIS) and Cisco (CSCO) moving notably higher in pre-market trading after reporting their quarterly results.

Disney is up by 3.4 percent in pre-market trading after the entertainment giant reported a much narrower than expected fiscal fourth quarter loss on revenues that exceeded analyst estimates.

Shares of Cisco are also seeing significant pre-market strength after the networking giant reported fiscal first quarter results that beat expectations on both the top and bottom lines.

Early buying interest may be somewhat subdued, however, as traders continue to express concerns about the economic impact of the recent spike in coronavirus cases.

After turning in a lackluster performance early in the session, stocks showed a significant move to the downside over the course of the trading day on Thursday. The major averages all slid firmly into negative territory as the day progressed.

The major averages climbed off their worst levels going into the close but remained notably lower. The Dow tumbled 317.46 points or 1.1 percent to 29,080.17, the Nasdaq slid 76.84 points or 0.7 percent to 11,709.59 and the S&P 500 slumped 35.65 points or 1 percent to 3,537.01.

The considerable weakness that emerged on Wall Street came as the recent surge in coronavirus cases across the U.S. and Europe has led to renewed concerns about the economic outlook.

According to data from John Hopkins University, the U.S. reported more than 144,000 new coronavirus cases on Wednesday, a new one-day record high.

The seven-day average of new cases has skyrocketed to more than 127,400, reflecting a 35 percent spike compared with a week ago.

The jump in new cases has been accompanied by notable increases in hospitalizations and deaths, suggesting the surge is not only due to increased testing.

The latest wave of coronavirus cases has led to concerns about the economic impact of new restrictions and lockdowns.

During a European Central Bank Forum on Central Banking virtual event, Federal Reserve Chair Jerome Powell noted the economic outlook remains uncertain despite recent upbeat news about a potential coronavirus vaccine.

"From our standpoint, it's just too soon to assess with any confidence the implications of the news for the path of the economy, especially in the near term," Powell said. "With the virus spreading, the next few months could be challenging."

The virus concerns overshadowed a report from the Labor Department showing a bigger than expected decrease in first-time claims for unemployment benefits in the week ended November 7th.

The Labor Department said initial jobless claims fell to 709,000, a decrease of 48,000 from the previous week's revised level of 757,000.

Economists had expected jobless claims to dip to 735,000 from the 751,000 originally reported for the previous week.

With the bigger than expected decrease, jobless claims fell to their lowest level since before lockdowns were imposed in mid-March.

A separate report released by the Labor Department showed consumer prices came in flat in the month of October.

The Labor Department said its consumer price index was unchanged in October after rising by 0.2 percent in September. Economists had expected another 0.2 percent uptick.

Excluding food and energy prices, consumer prices were still flat in October after edging up by 0.2 percent in September. Core prices were also expected to inch up by another 0.2 percent.

Airline stocks moved sharply lower over the course of the trading session, dragging the NYSE Arca Airline Index down by 4.1 percent. The index continued to give back ground after ending Tuesday's trading at a five-month closing high.

Substantial weakness also emerged among energy stocks, which moved lower along with the price of crude oil.

Reflecting the weakness in the energy sector, the NYSE Arca Oil Index plunged by 4.1 percent, the NYSE Arca Natural Gas Index tumbled by 3.3 percent and the Philadelphia Oil Service Index slumped by 3.1 percent.

Banking stocks also showed a significant move to the downside on the day, resulting in a 2.3 percent drop by the KBW Bank Index.

Chemical, housing and computer hardware stocks also saw considerable weakness, moving lower along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are sliding $0.73 to $40.39 a barrel after falling $0.33 to $41.12 a barrel on Thursday. Meanwhile, after climbing $11.70 to $1,873.30 an ounce in the previous session, gold futures are jumping $14.20 to $1,887.50 an ounce.

On the currency front, the U.S. dollar is trading at 104.72 yen versus the 105.13 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1820 compared to yesterday’s $1.1806.

Asia

Asian stocks ended Friday's session on a mixed note as the resurgence of new coronavirus cases around the globe overshadowed investor optimism that vaccines in development could help to slow the spread of the novel coronavirus.

Fed Chair's Jerome Powell's cautious comments on the outlook for economic recovery and media reports suggesting that U.S. Democrats and Republicans are still far apart on an economic stimulus deals also contributed to the cautious mood.

Chinese stocks fell after U.S. President Donald Trump signed an executive order aimed at prohibiting U.S. investments in Chinese firms that are determined to be owned or controlled by the country's military.

The benchmark Shanghai Composite Index dropped 28.57 points, or 0.9 percent, to 3,310.10, while Hong Kong's Hang Seng Index finished marginally lower at 26,156.86.

Japanese shares ended lower to snap an eight-day winning streak as the focus shifted to resurging new cases of Covid-19 both at home and abroad. Tokyo confirmed 374 new Covid-19 infections today, topping 300 for three consecutive days.

The Nikkei 225 Index ended down 135.01 points, or 0.5 percent, at 25,385.87, while the broader Topix closed 1.3 percent lower at 1,703.22.

The Nikkei rose more than 4 percent for the week on optimism over Biden's victory in the U.S. presidential race and Pfizer's promising vaccine trial data.

Travel-related stocks fell, with Japan Airlines down 1.9 percent and ANA Holdings losing as much as 4.8 percent. Railroad companies such as Central Japan Railway, Sotetsu Holdings and Kintetsu Group Holdings fell between 3.7 percent and 6.8 percent.

Australian markets ended slightly lower as new Covid-19 cases continued to rise globally, offsetting investor optimism surrounding vaccine hopes.

The benchmark S&P/ASX 200 Index slipped 13.00 points, or 0.2 percent, to 6,405.20 but rose about 3 percent for the week. The broader All Ordinaries Index ended down 10.10 points, or 0.2 percent, at 6,609.30.

Energy stocks such as Origin Energy, Beach Energy and Santos dropped 1-2 percent as oil prices fell on fears about a slow recovery in the global economy and fuel demand.

The big four banks ended narrowly mixed, while mining heavyweight BHP gave up 1.9 percent. Gold miners Evolution Mining, Newcrest and Northern Star Resources jumped 3-7 percent as bullion prices rebounded after a slide in government bond yields.

Bulk grain handler Graincorp soared 9.1 percent after the company sounded upbeat about its prospects.

Meanwhile, Seoul stocks rose notably to hit a nearly two-year high as foreign investors extended their buying streak to a seventh consecutive session. The benchmark Kospi climbed 18.25 points, or 0.4 percent, to 2,493.87, with chipmakers leading the surge.

Samsung Electronics climbed 3.6 percent, SK Hynix advanced 1.8 percent and Hyundai Motor, the country's largest carmaker, added 2 percent.

After the country reported its biggest daily jump in Covid-19 cases in 70 days, South Korea's Prime Minister Chung Sye-kyun said the viral spread could force the government to "seriously consider" tightening social distancing again.

Europe

European stocks are turning in a mixed performance on Friday as investors remain concerned over climbing Covid-19 cases in the U.S., Europe and Asia as well as a lack of progress toward a U.S. stimulus package.

European Central Bank President Christine Lagarde cautioned Thursday that the region's economy still faced difficult times despite recent positive news on vaccine development. European officials urged to continue measures to control infections.

Amid the second wave of the virus infections, Germany expects to continue the latest restrictions imposed to contain the pandemic through the winter, while France will maintain a national lockdown until December 1 at the earliest.

The United Kingdom posted its biggest one-day jump in laboratory-confirmed coronavirus infections. In the U.S., new Covid-19 infections hit fresh records and remained above 100,000 for an eighth consecutive day.

While the U.K.’s FTSE 100 Index has slid by 0.7 percent, the French CAC 40 Index and the German DAX Index are both up by 0.1 percent.

In German corporate news, shopping center Deutsche EuroShop has rallied after its key operating figures recovered significantly in the third quarter.

Deutsche Wohnen has also risen. The property company said it expects a significant revaluation of its property portfolio as of December 31, 2020.

Meanwhile, Nordex has come under pressure. The manufacturer of wind turbines has confirmed its preliminary figures announced on November 9, 2020.

Steel producer Salzgitter has also declined after it reported consolidated loss of 98.3 million euros in its third quarter.

In France, shares of Engie have moved sharply higher after the utility stuck to guidance for 2020 net recurring income and capital expenditure.

Concessions and construction company Vinci has also climbed. The company revised its forecast for motorway traffic in 2020 but said that traffic will likely return to normative levels as soon as restrictions are lifted.

U.S. Economic Reports

Producer prices in the U.S. increased by slightly more than anticipated in the month of October, according to a report released by the Labor Department on Friday.

The Labor Department said its producer price index for final demand rose by 0.3 percent in October after climbing by 0.4 percent in September. Economists had expected prices to inch up by 0.2 percent.

The bigger than expected increase in producer prices was partly due to a jump in food prices, which surged up by 2.4 percent in October amid a spike in prices for fresh and dry vegetables.

The report said energy prices also climbed by 0.8 percent in October after slipping by 0.3 percent in the previous month, reflecting higher gasoline prices.

Excluding food and energy prices, core producer prices crept up by 0.1 percent in October after rising by 0.4 percent in September. Core prices were expected to edge up by 0.2 percent.

The uptick in core prices came as prices for final demand services rose by 0.2 percent in October following a 0.4 percent increase in September.

At 10 am ET, the University of Michigan is scheduled to release its preliminary reading on consumer sentiment in the month of November. The consumer sentiment index is expected to inch up to 82.0 in November from 81.8 in October.

Stocks In Focus

Shares of DraftKings (DKNG) are moving sharply higher in pre-market trading after the sports betting company reported better than expected third quarter results and raised its full-year revenue guidance.

Semiconductor equipment maker Applied Materials (AMAT) is also likely to see initial strength after reporting fiscal fourth quarter results that beat estimates and providing an upbeat forecast for the current quarter.

Shares of Dillard’s (DDS) may also move to the upside after the department store chain reported an unexpected third quarter profit.

On the other hand, shares of Revlon (REV) may come under pressure after the cosmetics maker reported a third straight quarterly loss on a 20 percent drop in revenue.