S&P Futures Slip as Key U.S. Inflation Report Looms

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March S&P 500 E-Mini futures (ESH24) are trending down -0.32% this morning as market participants geared up for a key U.S. consumer inflation report that will help identify the path forward for the Federal Reserve.

In Monday’s trading session, Wall Street’s major indexes closed mixed. Monday.Com Ltd (MNDY) plunged over -10% as the company’s in-line guidance overshadowed upbeat Q4 results. Also, Applied Digital Corp (APLD) slid more than -8% following the company’s announcement that revenue from its Ellendale data center hosting facility would take a hit in the current quarter due to an ongoing power outage. In addition, Rivian Automotive Inc (RIVN) fell over -2% after Barclays downgraded the stock to Equal Weight from Overweight. On the bullish side, VF Corporation (VFC) soared about +14% and was the top percentage gainer on the S&P 500 following a report by Reuters indicating that the founding family of the company expressed support for replacing two directors on the board with members of Engaged Capital. Also, Diamondback Energy Inc (FANG) climbed more than +9% and was the top percentage gainer on the Nasdaq 100 after agreeing to buy Endeavor Energy in a $26 billion cash-and-stock deal.

Fed Governor Michelle Bowman reiterated on Monday that the Federal Reserve’s benchmark lending rate is in a good place to exert downward pressure on inflation and stated that she does not view rate cuts as appropriate “in the immediate future.” Also, Richmond Fed President Thomas Barkin cautioned that U.S. businesses, accustomed to raising prices in recent years, may continue to fan inflation.

Meanwhile, U.S. rate futures have priced in a 15.5% chance of a 25 basis point rate cut at the next central bank meeting in March and a 55.9% probability of at least a 25 basis point rate cut at May’s policy meeting.

On the earnings front, notable companies like Coca-Cola (KO), Shopify (SHOP), Airbnb (ABNB), Marriott International (MAR), Datadog (DDOG), Molson Coors (TAP), MGM Resorts (MGM), Hasbro (HAS), Biogen (BIIB), Upstart Holdings (UPST), and Lyft (LYFT) are slated to release their quarterly results today.

On the economic data front, all eyes are focused on the U.S. consumer inflation report in a couple of hours. Economists, on average, forecast that the January U.S. CPI will come in at +0.2% m/m and +2.9% y/y, compared to the previous values of +0.3% m/m and +3.4% y/y.

Also, investors will likely focus on the U.S. Core CPI data. Economists anticipate the Core CPI to be +0.3% m/m and +3.7% y/y in January, compared to the previous figures of +0.3% m/m and +3.9% y/y.

In the bond markets, United States 10-year rates are at 4.178%, up +0.12%.

The Euro Stoxx 50 futures are down -0.71% this morning as investors digested a fresh batch of corporate earnings and economic data while cautiously awaiting the latest U.S. inflation reading. Losses in technology stocks are leading the overall market lower. The Office for National Statistics data showed Tuesday that British wage growth slowed less than anticipated in the last three months of 2023 from a year earlier, highlighting investor apprehensions regarding a delay in interest rate cuts from the Bank of England. Separately, the ZEW Economic Research Institute said Tuesday that German investor morale improved in February. In corporate news, Michelin (ML.FP) climbed over +6% after the tiremaker reported a record full-year profit and announced a new share buyback program. Also, Tui Ag (TUI1.D.DX) rose more than +3% after the largest travel operator in Europe unexpectedly swung to a profit in Q1, driven by robust travel demand. At the same time, Siltronic Ag (WAF.D.DX) plunged over -7% after the chip equipment supplier provided a weak full-year sales forecast and reduced its dividend.

U.K.’s Average Earnings ex Bonus, U.K.’s Claimant Count Change, U.K.’s Employment Change 3M/3M, U.K.’s Unemployment Rate, Germany’s ZEW Economic Sentiment, and Eurozone’s ZEW Economic Sentiment data were released today.

U.K. December Average Earnings ex Bonus has been reported at 6.2%, stronger than expectations of 6.0%.

U.K. January Claimant Count Change stood at 14.1K, stronger than expectations of 15.2K.

U.K. December Employment Change 3M/3M came in at 72K, weaker than expectations of 73K.

U.K. December Unemployment Rate was at 3.8%, stronger than expectations of 4.0%.

The German February ZEW Economic Sentiment arrived at 19.9, stronger than expectations of 17.4.

Eurozone February ZEW Economic Sentiment stood at 25.0, stronger than expectations of 20.1.

Japan’s Nikkei 225 Stock Index (NIK) closed up +2.89%, while Chinese markets were closed for the week-long Lunar New Year holiday.

Chinese markets will reopen on Monday, February 19th. 

Japan’s Nikkei 225 Stock Index closed at a fresh 34-year high today, boosted by a rally in chip-related stocks, as trading resumed after a holiday. Technology stocks led the gains on Tuesday, with Tokyo Electron Ltd surging over +13% after the company raised its full-year revenue and profit forecast. Also, SoftBank Group Corp climbed more than +6% after further gains for Arm Holdings Plc, in which it holds a stake. Meanwhile, government data revealed on Tuesday that Japan’s producer price index increased by 0.2% in January from a year ago while remaining unchanged month-on-month. The yen fell on Tuesday, with its recent weakness attributed to remarks from Bank of Japan officials indicating that the central bank won’t rush to exit supportive policy. In other corporate news, Otsuka Holdings Co Ltd plunged about -5% following the announcement that its experimental drug did not meet the primary goal in a late-stage trial for treating agitation associated with dementia due to Alzheimer’s disease. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +1.19% to 19.48.

The Japanese January PPI stood at 0.0% m/m and +0.2% y/y, compared to expectations of +0.1% m/m and +0.1% y/y.

Pre-Market U.S. Stock Movers

ZoomInfo Technologies Inc (ZI) surged about +24% in pre-market trading after the company reported upbeat Q4 results and provided solid Q1 and FY24 guidance.

Tripadvisor Inc (TRIP) climbed over +12% in pre-market trading following the announcement of a special committee comprising independent directors tasked with evaluating any proposals for a potential transaction.

Arista Networks (ANET) plunged more than -6% in pre-market trading despite surpassing Q4 profit estimates and offering strong Q1 revenue guidance.

Lattice Semiconductor Corporation (LSCC) tumbled over -9% in pre-market trading after issuing a weaker-than-expected Q1 revenue outlook.

JetBlue Airways Corp (JBLU) soared more than +14% in pre-market trading following activist investor Carl Icahn’s disclosure of a 9.91% stake in the U.S. low-cost airline through a Securities and Exchange filing.

United Airlines Holdings Inc (UAL) fell about -1% in pre-market trading after Redburn Atlantic downgraded the stock to Neutral from Buy with a $50 price target.

PayPal Holdings Inc (PYPL) dropped over -1% in pre-market trading after Daiwa downgraded the stock to Neutral from Outperform with a price target of $62.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - February 13th

Coca-Cola (KO), Shopify Inc (SHOP), Airbnb (ABNB), Zoetis Inc (ZTS), Moody’s (MCO), Marriott Int (MAR), Ecolab (ECL), AIG (AIG), Welltower (WELL), Datadog (DDOG), Waste Connections (WCN), Biogen (BIIB), Restaurant Brands Int (QSR), GlobalFoundries (GFS), Howmet (HWM), Invitation Homes (INVH), Akamai (AKAM), Entegris (ENTG), MGM (MGM), TPG Inc (TPG), Godaddy Inc (GDDY), Leidos (LDOS), Watsco (WSO), SS&Cs (SSNC), EQT (EQT), TransUnion (TRU), Molson Coors Brewing B (TAP), Incyte (INCY), Zillow Group Inc (ZG), Robinhood Markets (HOOD), DaVita (DVA), WESCO (WCC), Bruker (BRKR), Roivant Sciences (ROIV), Primerica (PRI), Instacart (CART), Hasbro (HAS), STAG Industrial (STAG), GXO Logistics (GXO), AutoNation (AN), Agree Realty (ADC), Bright Horizons (BFAM), Allison Transmission (ALSN), LYFT (LYFT), IPG Photonics (IPGP), Kite Realty (KRG), Quidel (QDEL), Franklin Electric (FELE), Herc Holdings (HRI), Grand Canyon Education (LOPE), Encore Wire (WIRE), Blackline (BL), Upstart (UPST), Innospec (IOSP), LCI Industries (LCII), Site Centers (SITC), Sitime Corp (SITM), Callaway Golf (MODG), Resideo Tech (REZI), Kratos Defense&Security (KTOS), USA Compression Partners LP (USAC), Krispy Kreme (DNUT), Mercury General (MCY), InMode (INMD), Comstock Resources (CRK), Mirion Technologies (MIR), Acadia (AKR), Inventrust Properties (IVT), GCM Grosvenor (GCMG), Vector (VGR), Hawaiian Electric Industries (HE), Danaos (DAC), Corsair (CRSR), ANGI Homeservices (ANGI), WK Kellogg (KLG).

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On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.