Stock Index Futures Muted With U.S. Retail Sales Data in Focus

March S&P 500 E-Mini futures (ESH26) are up +0.03%, and March Nasdaq 100 E-Mini futures (NQH26) are up +0.04% this morning, taking a breather after a recent rally as investors await a slew of U.S. economic data, with particular attention on the retail sales report, remarks from Federal Reserve officials, and a new round of corporate earnings reports. 

The 10-year T-note yield fell two basis points to 4.18%.

In yesterday’s trading session, Wall Street’s main stock indexes ended in the green. Most members of the Magnificent Seven stocks advanced, with Microsoft (MSFT) rising over +3% and Meta Platforms (META) gaining more than +2%. Also, chip stocks climbed, with Broadcom (AVGO) and Advanced Micro Devices (AMD) rising more than +3%. In addition, AppLovin (APP) surged over +13% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after Capitalwatch, a self-described independent news organization, withdrew its earlier allegations against the company. On the bearish side, Kyndryl Holdings (KD) tanked more than -54% after the company reported downbeat FQ3 results and its Chief Financial Officer, David Wyshner, exited the firm amid a review of its accounting practices.

“When markets sell off like certain areas in tech have, there’s often knee-jerk rallies,” said Sameer Samana at Wells Fargo Investment Institute. “Time will tell if we need a retest or if enough value was created.”

Fed Governor Stephen Miran said on Monday that interest rates should be set lower than their current level. “I do think it’s appropriate to have significantly lower policy rates than we do,” Miran said.

Meanwhile, U.S. rate futures have priced in an 82.3% chance of no rate change and a 17.7% chance of a 25 basis point rate cut at the next central bank meeting in March.

On the trade front, the U.S. and Bangladesh struck a deal on Monday under which the U.S. will cut its so-called reciprocal tariff to 19%, after previously lowering it from 37% to 20%, and grant a new exemption for textile products.

Today, all eyes are on the U.S. Retail Sales report, which is set to be released in a couple of hours. Economists, on average, forecast that Retail Sales will show a +0.4% m/m increase in December after the +0.6% m/m gain a month earlier.

Investors will also focus on U.S. Core Retail Sales, which rose +0.5% m/m in November. Economists expect the December figure to rise +0.3% m/m.

The U.S. Employment Cost Index will be released today. Economists expect this figure to come in at +0.8% q/q in the fourth quarter, the same as in the third quarter.

U.S. Import and Export Price Indexes will be released today as well. Economists anticipate the import price index to rise +0.1% m/m and the export price index to rise +0.1% m/m in December, compared to the previous figures of +0.4% m/m and +0.5% m/m, respectively.

In addition, market participants will be looking toward speeches from Cleveland Fed President Beth Hammack and Dallas Fed President Lorie Logan.

On the earnings front, notable companies such as Coca-Cola (KO), Gilead Sciences (GILD), CVS Health (CVS), Robinhood Markets (HOOD), Cloudflare (NET), and Ford (F) are set to report their quarterly figures today. According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +8.4% increase in quarterly earnings for Q4 compared to the previous year.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.180%, down -0.33%.

The Euro Stoxx 50 Index is up +0.03% this morning, taking a breather after a strong two-day rally, while investors digest fresh corporate updates and await key U.S. economic data. Chemical stocks led the gains on Tuesday after a more upbeat assessment of the sector by Goldman Sachs, which pointed to early signs of improving economic momentum. Also, luxury stocks advanced, led by a more than +12% jump in Kering (KER.FP) after the owner of Gucci and other high-end brands posted improving Q4 sales trends and said it aims to return to growth this year. At the same time, insurance stocks slumped, tracking declines in their U.S. peers amid concerns that new AI tools could speed up disruption in the sector after Insurify rolled out an AI-powered comparison tool built on ChatGPT. Energy stocks also fell, with BP Plc (BP-.LN) sliding over -4% after it suspended its share buyback program. Meanwhile, investors are bracing for a raft of key U.S. economic data, starting with retail sales on Tuesday. In other corporate news, Thule Group AB (THULE.S.DX) surged over +14% after the recreational equipment maker reported better-than-expected quarterly revenue.

The European economic data slate is empty on Tuesday.

Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.13%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +2.28%. 

China’s Shanghai Composite Index closed slightly higher today. Media stocks led the gains on Tuesday amid excitement over ByteDance’s latest AI video-generation model. At the same time, property stocks slid. China’s yuan climbed to its strongest level since May 2023 on Tuesday, extending yesterday’s advance after Bloomberg reported that regulators had advised financial institutions to curb their holdings of U.S. Treasuries. Meanwhile, trading is expected to thin out gradually this week ahead of the long Lunar New Year holidays, China’s biggest and most important festival. Turnover of onshore shares totaled 2.11 trillion yuan ($305.27 billion) on Tuesday, marking the lowest level so far this year. In other news, Politico reported on Monday that U.S. President Donald Trump is set to meet Chinese President Xi Jinping in Beijing in April. In corporate news, InSilico Medicine climbed over +7% in Hong Kong after the drugmaker entered a partnership with China Medical System to develop innovative drugs. Investors are awaiting China’s inflation data for January, scheduled for release on Wednesday, which should help determine whether deflationary pressures are easing or becoming more entrenched.

Japan’s Nikkei 225 Stock Index closed sharply higher and hit a new record high today, extending its election-driven rally. The Japanese market continues to ride the “Takaichi trade” after Prime Minister Sanae Takaichi’s ruling coalition won an overwhelming majority in Sunday’s lower-house election. Technology stocks were among the biggest gainers on Tuesday, with SoftBank Group jumping more than +10% as Takaichi’s election victory boosted expectations of increased government spending in the AI sector. Also, real estate, financial, and industrial stocks, which are also seen as beneficiaries of Takaichi’s policies, climbed. Meanwhile, Japanese government bond yields fell on Tuesday, as concerns over the country’s expansionary spending and expectations of an early Bank of Japan interest rate hike eased. Eiichiro Miura, senior general manager of investments at Nissay Asset Management, said, “Investors expect that Takaichi may not hurry in cutting the taxes on food because the landslide gives her control to move ahead.” In corporate news, Furukawa Electric soared over +22% after the cable maker posted strong earnings. Also, Mazda Motor surged +12% after the automaker reported better-than-feared results. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -0.14% to 35.77.

Pre-Market U.S. Stock Movers

U.S.-listed shares of Taiwan Semiconductor Manufacturing Co. (TSM) rose over +2% in pre-market trading after the world’s biggest contract chipmaker’s January revenue grew at its fastest pace in months.

Credo Technology (CRDO) surged more than +16% in pre-market trading after the data center connectivity company raised its FQ3 revenue guidance.

Palantir Technologies (PLTR) rose over +2% in pre-market trading after Daiwa upgraded the stock to Buy from Neutral with a price target of $180.

Upwork (UPWK) sank over -21% in pre-market trading after the online freelancing platform issued below-consensus Q1 guidance.

ON Semiconductor (ON) slid more than -4% in pre-market trading after the chip company posted weaker-than-expected Q4 revenue and issued soft Q1 revenue guidance.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - February 10th

The Coca-Cola Company (KO), Gilead Sciences (GILD), Welltower (WELL), S&P Global (SPGI), CVS Health (CVS), Duke Energy (DUK), Marriott International (MAR), The Williams Companies (WMB), Ecolab (ECL), Robinhood Markets (HOOD), Cloudflare (NET), Ford Motor Company (F), Edwards Lifesciences (EW), American International Group (AIG), Datadog (DDOG), Xylem (XYL), Fiserv (FISV), Astera Labs (ALAB), Incyte (INCY), Quest Diagnostics (DGX), DuPont de Nemours (DD), Entegris (ENTG), Zimmer Biomet Holdings (ZBH), Trimble (TRMB), W. P. Carey (WPC), WESCO International (WCC), Masco (MAS), Hasbro (HAS), Zillow Group (Z), Zillow Group (ZG), Lattice Semiconductor (LSCC), Assurant (AIZ), Exelixis (EXEL), Saia, Inc. (SAIA), Advanced Energy Industries (AEIS), Aramark (ARMK), Agree Realty (ADC), Axalta Coating Systems (AXTA), Pegasystems (PEGA), GXO Logistics (GXO), Red Rock Resorts (RRR), Lyft (LYFT), Mattel (MAT), Klaviyo (KVYO), Mirion Technologies (MIR), Centrus Energy (LEU), Upstart Holdings (UPST), Oscar Health (OSCR), NMI Holdings (NMIH), Highwoods Properties (HIW), Diodes (DIOD), Acadia Realty Trust (AKR), Teradata (TDC), BlackLine (BL), O-I Glass (OI), Hinge Health (HNGE), Harley-Davidson (HOG), InvenTrust Properties (IVT), Blackbaud (BLKB), Douglas Emmett (DEI), GCM Grosvenor (GCMG), Veeco Instruments (VECO), Navios Maritime Partners (NMM), MasterBrand (MBC), CTS Corporation (CTS), NETSTREIT (NTST), Apollo Commercial Real Estate Finance (ARI), Insperity (NSP), IRADIMED Corporation (IRMD), Great Lakes Dredge & Dock (GLDD), Vestis (VSTS).