March S&P 500 futures (ESH23) are trending down -0.22% this morning after three major U.S. benchmark indices ended the regular session sharply higher as hopes of a less aggressive Federal Reserve boosted sentiment, with investors piling into market-leading momentum stocks ahead of a busy week of earnings. Three major U.S. stock indexes were fueled primarily by gains in the Technology, Consumer Goods, and Industrials sectors.
In Monday’s trading session, Qualcomm Inc (QCOM) gained over +6%, and Advanced Micro Devices Inc (AMD) jumped about +9% after Barclays upgraded their stocks to overweight from equal-weight. Also, Western Digital (WDC) climbed more than +8% after Bloomberg reported that the company could merge with Japan’s Kioxia Holdings. In addition, Salesforce (CRM) rose about +3% on news that hedge fund Elliott Investment Management has taken a multibillion-dollar activist stake in the business software firm.
“It was a tough year for technology investors. So you’re starting to see investors going back into some of those names. But instead of across the board, they’ll be buying the names that have a chance to do good this year, even in a choppy economic environment,” said Jimmy Lee, a chief executive officer of Wealth Consulting Group.
Microsoft Corp (MSFT) kicks off earnings season for tech companies today after the closing bell. Analysts expect year-over-year earnings from S&P 500 companies to drop 3% for the quarter, compared with an expected decline of 1.6% at the start of the year.
Meanwhile, U.S. rate futures have priced in a 98.6% chance of a 25 basis point rate hike at February’s monetary policy meeting.
Today, all eyes are focused on the U.S. Manufacturing PMI preliminary data in a couple of hours. Economists, on average, forecast that January Manufacturing PMI will stand at 46.0, compared to the previous value of 46.2.
Also, investors are likely to focus on the U.S. Services PMI preliminary data, which was at 44.7 in December. Economists foresee the new figure to be 45.0.
In the bond markets, United States 10-Year rates are at 3.497%, down -0.74%.
The Euro Stoxx 50 futures are down -0.19% this morning as investors digested the latest Purchasing Managers’ survey results from the euro area and the U.K. Also, Christine Lagarde said on Monday the European Central Bank would do everything necessary to return inflation to its 2% target, indicating more “significant” interest-rate increases at coming meetings. In corporate news, shares of Rheinmetall Ag (RHM.D.DX) rose about +0.5% after the company’s chief executive forecasted that sales would grow to 11-12 billion euros in 2025.
Germany’s GfK Consumer Climate, France’s Manufacturing PMI (preliminary), France’s Services PMI (preliminary), Germany’s Manufacturing PMI (preliminary), Germany’s Services PMI (preliminary), Eurozone Manufacturing PMI (preliminary), Eurozone S&P Global Composite PMI (preliminary), Eurozone Services PMI (preliminary), U.K. Composite PMI (preliminary), U.K. Manufacturing PMI (preliminary), and U.K. Services PMI (preliminary) data were released today.
The German February GfK Consumer Climate has been reported at -33.9, weaker than expectations of -33.0.
The French January Manufacturing PMI stood at 50.8, stronger than expectations of 49.6.
The French January Services PMI came in at 49.2, weaker than expectations of 49.8.
The German January Manufacturing PMI was at 47.0, weaker than expectations of 47.9.
The German January Services PMI stood at 50.4, stronger than expectations of 49.6.
Eurozone January Manufacturing PMI has been reported at 48.8, stronger than expectations of 48.5.
Eurozone January S&P Global Composite PMI was at 50.2, stronger than expectations of 49.8.
Eurozone January Services PMI came in at 50.7, stronger than expectations of 50.2.
U.K. Composite PMI has been reported at 47.8, weaker than expectations of 49.3.
U.K. Manufacturing PMI stood at 46.7, stronger than expectations of 45.4.
U.K. Services PMI was at 48.0, weaker than expectations of 49.6.
Asian stock markets today settled in the green. Japan’s Nikkei 225 Stock Index (NIK) closed up +1.46%, while the Chinese market was closed for the Lunar New Year holiday.
Japan’s Nikkei 225 Stock Index closed higher today, led by strength in technology stocks even after a preliminary reading showed that manufacturing PMI remained at its lowest level in over two years in January. The index’s upward momentum was fueled by gains in the Power, Electrical/Machinery, and Machinery sectors. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up 0.92% to 17.53.
The Japanese January Manufacturing PMI (preliminary) was unchanged for a second-straight month at 48.9, weaker than expectations of 49.4.
The Japanese January Services PMI (preliminary) rose to 52.4, stronger than expectations of 51.4.
The BoJ Core CPI has been reported at +3.1% y/y in January, stronger than expectations of +2.9% y/y.
Pre-Market U.S. Stock Movers
Axcella Health Inc (AXLA) jumped about +68% in pre-market trading after the company announced a regulatory path to the registration of AXA1125 in the treatment of Long COVID Fatigue.
Verb Technology Company, Inc. (VERB) plunged over -28% in pre-market trading after the company revealed its intentions to offer its shares of common stock without warrants in a public offering.
PennantPark Floating Rate Capital Ltd (PFLT) slid about -7% in pre-market trading after the company commenced an underwritten primary offering of 4.25M shares of its common stock.
Zions Bancorporation (ZION) dropped about -3% in pre-market trading after the bank reported upbeat Q4 results but warned about rising adjusted noninterest expenses in 2023.
Advanced Micro Devices Inc (AMD) fell more than -2% in pre-market trading after Bernstein downgraded the stock to market perform from outperform with a price target of $80, down from $95.
Peloton Interactive Inc (PTON) dropped about -3% in pre-market trading after Baird downgraded the stock to neutral from outperform with a price target of $12, down from $14.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - January 24th
Microsoft (MSFT), J&J (JNJ), Danaher (DHR), Verizon (VZ), Texas Instruments (TXN), Raytheon Technologies (RTX), Union Pacific (UNP), Lockheed Martin (LMT), Intuitive Surgical (ISRG), General Electric (GE), Canadian National Railway (CNI), 3M (MMM), Travelers (TRV), Capital One Financial (COF), Halliburton (HAL), PACCAR (PCAR), DR Horton (DHI), Nidec (NJDCY), Associated British Foods plc (ASBFY), Logitech (LOGI), F5 Networks (FFIV), Invesco (IVZ), Western Alliance (WAL), Silgans (SLGN), Old National Bancorp (ONB), UMB Financial (UMBF), GATX (GATX), Community Bank System (CBU), Simmons First National (SFNC), Atlantic Union (AUB), Britvic ADR (BTVCY), Navient (NAVI), Columbia Banking (COLB), WesBanco (WSBC), Trustmark (TRMK), Renasant (RNST), Agilysys (AGYS), Marten Transport (MRTN), National Bank Holdings (NBHC), Veritex Holdings Inc (VBTX), Stride (LRN), First Busey (BUSE), City Holding (CHCO), First Commonwealth Financial (FCF), Nextgen Healthcare (NXGN), Taro Pharma Industries (TARO), Premier Financial (PFC), QCR (QCRH), Forestar (FOR), Peoples Bancorp (PEBO), Peoples Bancorp (PEBO), Cambridge Bancorp (CATC).
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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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