March S&P 500 futures (ESH23) are trending down -0.28% this morning after three major U.S. benchmark indices shook off early losses and closed higher on Friday as investors assessed the start of the U.S. earnings season and the path of inflation. Three major U.S. stock indexes were fueled primarily by gains in the Consumer Services, Basic Materials, and Technology sectors.
In Friday’s trading session, the S&P 500 and Nasdaq indices closed at their highest levels in a month, while the Dow closed at its highest point since December 2nd. JPMorgan Chase & Co (JPM) and Bank of America Corp (BAC) topped quarterly earnings estimates, while Wells Fargo (WFC) & Co and Citigroup Inc (C) reported mixed earnings results. However, shares of all four banks closed in the green.
Data on Friday revealed that U.S. Michigan Consumer Sentiment Index stood at 64.6, stronger than expectations of 60.5, pointing to a much healthier economic outlook. Also, the one-year inflation outlook fell to 4.0% in January, the lowest level since the spring of 2021.
In the coming week, U.S. retail sales numbers for December will be the main highlight as investors look for further indications that the Federal Reserve’s aggressive rate hikes are cooling the economy. In addition, market participants will be eyeing a spate of economic data, including the U.S. PPI, Core PPI, Core Retail Sales, Industrial Production, Business Inventories, Building Permits, Housing Starts, Initial Jobless Claims, Philadelphia Fed Manufacturing Index, Crude Oil Inventories, and Existing Home Sales.
The World Economic Forum on Monday kicked off in the Swiss ski resort of Davos, with two-thirds of private and public sector chief economists surveyed by the Forum expecting a global recession in 2023 and some 18% considering it “extremely likely.”
Morgan Stanely (MS), Goldman Sachs (GS), and Citizens Financial (CFG) are scheduled to report their quarterly earnings today. Quarterly earnings for S&P 500 companies are expected to fall 2.2% from the year-ago period, compared with an expected drop of 1.6% at the start of the year.
Today, all eyes are focused on the U.S. NY Empire State Manufacturing Index in a couple of hours. Economists, on average, forecast that the NY Empire State Manufacturing Index will stand at -8.70 in January, compared to the previous value of -11.20.
In addition, investors are likely to focus on remarks from FOMC Member Williams for further clues on the Fed’s rate hike path.
In the bond markets, United States 10-Year rates are at 3.553%, up +1.20%.
The Euro Stoxx 50 futures are down -0.34% this morning as investors digested awful Chinese growth numbers and a series of important regional economic data. China’s growth numbers in the final quarter of last year stoked investors’ concerns about the global economic outlook. At the same time, data on Tuesday showed the U.K. unemployment rate remained steady at 3.7% in November, while the claimant count change stood at 19.7K in December, stronger than expectations of 19.8K, pointing to a relatively solid labor market.
U.K. Average Earnings Index +Bonus, U.K. Employment Change 3M/3M, Germany CPI, Italy CPI, Germany ZEW Current Conditions, Germany ZEW Economic Sentiment, and Eurozone ZEW Economic Sentiment data were also released today.
U.K. November Average Earnings Index +Bonus has been reported at 6.4%, stronger than expectations of 6.2%.
U.K. November Employment Change 3M/3M came in at +27K, stronger than expectations of +5K.
The German December CPI has been reported at -0.8% m/m and +8.6% y/y, in line with expectations.
The Italian December CPI stood at +0.3% m/m and +11.6% y/y, in line with expectations.
The German January ZEW Current Conditions came in at -58.6, weaker than expectations of -58.0.
The German January ZEW Economic Sentiment was at +16.9, stronger than expectations of -15.0.
Eurozone January ZEW Economic Sentiment stood at +16.7, stronger than expectations of -14.3.
Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.10%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.23%.
China’s Shanghai Composite today closed lower after data showed that the country’s economic growth slowed sharply in the fourth quarter, brewing more uncertainty over the timing of a recovery this year. However, the country’s GDP expanded at a better-than-expected pace in the fourth quarter, standing at +2.9% from a year earlier. Also, Chinese industrial production and retail sales data for December were better than expected, pointing to early recovery signs of the world’s second-largest economy. Still, uncertainty over a bigger recovery persisted as the country grapples with its worst-yet COVID-19 outbreak.
At the same time, Japan’s Nikkei 225 Stock Index closed higher today, bouncing back from heavy losses over the past two sessions. All eyes are focused on an upcoming Bank of Japan policy meeting, with investors worrying about any changes to the central bank’s interest rate policy. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up 6.40% to 19.77.
Pre-Market U.S. Stock Movers
Cryptocurrency-exposed stocks are moving higher in pre-market trading, with the price of Bitcoin exceeding the $21,000 level. Bit Digital Inc (BTBT) is up more than +28%. Also, Marathon Digital (MARA) is up more than +11%, and Riot Blockchain (RIOT) is up about +9%.
AutoNation Inc (AN) dropped about -3% in pre-market trading after Morgan Stanley downgraded the stock to underweight from equal weight.
First Wave BioPharma Inc (FWBI) climbed over +15% in pre-market trading after the company provided an update on the IND filing for the Phase 2 adrulipase trial.
Bandwidth Inc (BAND) slid more than -2% in pre-market trading after Piper Sandler downgraded the stock to neutral from overweight with a price target of $25, up from $18.
Snap Inc (SNAP) dropped about -3% in pre-market trading after MP Securities downgraded the stock to market perform from outperform.
Sidus Space Inc (SIDU) fell about -5% in pre-market trading after the company filed to sell 8.13M shares of Class A common stock, pre-funded warrants.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - January 17th
Morgan Stanley (MS), Goldman Sachs (GS), Interactive Brokers (IBKR), Citizens Financial Group Inc (CFG), United Airlines Holdings (UAL), Signature Bank (SBNY), New Oriental Education&Tech (EDU), Pinnacle (PNFP), Old National Bancorp (ONB), Hancock Whitney (HWC), United Community Banks (UCBI), Fulton (FULT), Progress (PRGS), FB Financial (FBK), ADTRAN (ADTN), Nicolet Bankshares (NIC), Mercantile (MBWM), Guaranty Bancshares (GNTY), Silvergate Cap (SI), Heartland Banccorp (HLAN), AMCON Distributing (DIT).
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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.
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