Pre-Market Brief: Stocks Mixed As Investors Brace For Tech Earnings

March S&P 500 futures (ESH23) are trending down -0.19% this morning after three major U.S. benchmark indices rallied on Friday, with the S&P 500 and Dow snapping a three-session losing streak and the Nasdaq notching the biggest one-day gain since November as a jump in Netflix and Alphabet shares, and dovish comments from Fed officials soothed investors’ fears. Three major U.S. stock indexes were fueled primarily by gains in the Technology, Consumer Services, and Basic Materials sectors.

In Friday’s trading session, shares of Netflix Inc (NFLX) jumped more than +8% after the streaming giant added more paid subscribers than expected in the fourth quarter. Also, Alphabet (GOOGL) gained over +5% after revealing its plans to ax about 12,000 jobs. In addition, Ally Financial (ALLY) climbed about +20% after the company reported upbeat Q4 results.

Comments from Federal Reserve officials on Friday were positive for stocks. Federal Reserve Governor Waller supported a quarter-point interest rate hike at the next meeting but warned of a “considerable way to go” on hitting the central bank’s inflation target. Also, Philadelphia Fed President Harker said he expects 25-basis point rate increases “to be appropriate going forward” amid some signs of cooling inflation.

Meanwhile, U.S. rate futures have priced in a 99.8% chance of a 25 basis point rate hike at February’s monetary policy meeting. 

Earnings season shifts away from the banks and now focuses on broader parts of the economy, with heavyweight U.S. technology companies such as Microsoft Corporation (MSFT), International Business Machines (IBM), Tesla Inc (TSLA), and Intel Corporation (INTC) set to report results this week. Analysts anticipate year-over-year earnings from S&P 500 companies to fall 2.9% for the fourth quarter, compared with an expected decline of 1.6% at the beginning of the year. 

In the coming week, market participants will be monitoring a spate of economic data, including U.S. Manufacturing PMI (preliminary), S&P Global Composite PMI (preliminary), Services PMI (preliminary), Crude Oil Inventories, Core Durable Goods Orders, Durable Goods Orders, GDP (preliminary), Initial Jobless Claims, New Home Sales, Core PCE Price Index, PCE Price Index, Personal Income, Personal Spending, Michigan Consumer Sentiment (preliminary), Michigan Consumer Expectations (preliminary), and Pending Home Sales.

The U.S. economic data slate is mainly empty on Monday, but investors could focus on the U.S. Leading Index for December. Economists, on average, forecast that the Leading Index will stand at -0.7% m/m, compared to the previous value of -1.0% m/m.

In the bond markets, United States 10-Year rates are at 3.482%, down -0.05%.

The Euro Stoxx 50 futures are up +0.19% this morning as investors weigh the economic outlook. Global investors digested dovish comments from Fed officials, assessing the possibility of a slower pace of rate hikes after data last week showed a fall in wholesale prices and retail sales. IMF director Kristalina Georgieva said Friday at the World Economic Forum that the global economic outlook “is not as bad as feared a couple of months ago” but warned that “less bad doesn’t quite yet mean good.” At the same time, Governing Council member Klaas Knot said Sunday that the ECB should hike rates by 50 basis points at its next two meetings, adding that the time to slow down monetary tightening remains “far away.” In corporate news, Remy Cointreau (RCO.FP) rose over +2% after Citigroup upgraded the French liquor company’s stock to buy from neutral.

The European economic data slate is largely empty on Monday. However, investors will likely focus on a speech from European Central Bank President Lagarde at the Deutsche Boerse annual reception for more clues on the central bank’s tightening plan.

Asian stock markets today settled in the green. Japan’s Nikkei 225 Stock Index (NIK) closed up +1.33%, while the Chinese market was closed for the Lunar New Year holiday.

Japan’s Nikkei 225 Stock Index surged today, following a strong Wall Street rally on Friday. The index’s upward momentum was fueled by gains in the Transport, Mining, and Chemical, Petroleum & Plastic sectors. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down 3.02% and hit a new 1-month low of 17.37.

Pre-Market U.S. Stock Movers

Pliant Therapeutics Inc (PLRX) jumped about +42% in pre-market trading after the company announced 12-week interim data from INTEGRIS-IPF Phase 2a trial. 

Lucid Group Inc (LCID) rose over +1% in pre-market trading after Citi resumed coverage of the stock with a buy rating and a $12 price target.

Bed Bath & Beyond Inc (BBBY) dropped more than -7% in pre-market trading, extending Friday’s losses after the company received a filing non-compliance notice from Nasdaq.

Sapiens International Corporation NV (SPNS) rose about +1% in pre-market trading after Goldman Sachs initiated coverage of the stock with a buy rating. 

Confluent Inc (CFLT) gained more than +3% in pre-market trading after Deutsche Bank upgraded the stock to buy from hold.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Monday - January 23rd

Axis Bank ADR (AXBKY), Baker Hughes (BKR), Brown&Brown (BRO), Synchrony Financial (SYF), Zions (ZION), Crane (CR), FNB (FNB), ServisFirst Bancshares (SFBS), Umpquas (UMPQ), Bank of Hawaii (BOH), Independent Bank Group (IBTX), Park National (PRK), NBT Bancorp (NBTB), Enterprise Financial (EFSC), Adams Diversified Equity Closed (ADX), Northwest Bancshares (NWBI), Hope Bancorp (HOPE), ADTRAN (ADTN), TrustCo Bank NY (TRST), Great Southern Bancorp (GSBC), PAM (PTSI), CrossFirst Bankshares (CFB), Hingham Institution (HIFS), Bank of Marin (BMRC), SmartFinancial Inc (SMBK), Southern Missouri (SMBC), Cuisine Solutions (CUSI), RBB Bancorp (RBB), PetMed Express (PETS), Concrete Pumping A (BBCP), Citizens&Northern (CZNC), Sierra Bancorp (BSRR), Blade Air Mobility (BLDE), Timberland (TSBK), Southern States Bancshares (SSBK), Codorus Valley (CVLY), Byrna Technologies (BYRN), Lifecore Biomedical (LFCR), Heartland Banccorp (HLAN), Peoples North Carolina (PEBK), Mountain Commerce (MCBI), Private Bancorp of America (PBAM), Bassett (BSET), California First National (CFNB), Republic First Bancorp (FRBK), Loop Industries (LOOP), ShiftPixy (PIXY), American Bank (AMBK), Bridgford (BRID), Calloways Nursery (CLWY), Chesapeake Finl Shs (CPKF).

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