What you need to know…
The S&P 500 Index ($SPX) (SPY) today is down -0.06%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.21%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.11%.
U.S. stock index futures are mixed on concern that market expectations may be too optimistic about Q4 tech company earnings. According to Bloomberg Intelligence data, Q4 earnings for tech firms are projected to drop 9.2% from the same period a year ago, the steepest drop in 7 years. Microsoft will report quarterly earnings after today’s close.
Negative corporate news today is also weighing on stock indexes. Alphabet is down more than -1% after Bloomberg reported the U.S. Justice Department could file an antitrust lawsuit against the company as soon as today regarding its dominance over the digital advertising market. Also, 3M Co is down more than -5% after reporting weaker-than-expected Q4 adjusted EPS. In addition, Union Pacific is down more than -3% after reporting weaker-than-expected Q4 operating revenue.
On the positive side for stocks, Paccar and Caesars Entertainment are up more than +2% after reporting stronger-than-expected Q4 revenue. Also, Travelers Co and DR Horton are up more than +1% after reporting better-than-expected Q4 revenue.
Today’s U.S. manufacturing news was mixed for stocks. The Jan S&P Global manufacturing PMI unexpectedly rose +0.6 to 46.8, stronger than expectations of a decline to 46.0. However, the Jan Richmond Fed manufacturing index fell -12 to a 2-1/2 year low of -11, weaker than expectations of -5.
A decline in global bond yields is supportive of stocks. The 10-year T-note yield is down -2.2 bp today to 3.488%. Also, the 10-year German bund yield is down -2.1 bp to 2.185%, and the 10-year UK Gilt yield is down -4.8 bp to 3.312%.
Overseas markets are mixed. The Euro Stoxx 50 index is down -0.08%, and Japan’s Nikkei Stock index closed up +1.46%. China and Hong Kong were closed for the Lunar New Year holidays.
Today’s stock movers…
3M Co (MMM) is down more than -5% today to lead losers in the S&P 500 and Dow Jones Industrials after reporting Q4 adjusted EPS of $2.28, weaker than the consensus of $2.36.
Brown & Brown (BRO) is down more than -5% after BMO Capital Markets said even after the company reported an overall Q4 earnings beat, the larger retail segment missed expectations on organic growth and margins.
EQT Corp (EQT) is down more than -5% after Cowen cut its price target on the stock to $48 from $54.
Union Pacific (UNP) is down more than -3% after reporting Q4 operating revenue of $6.18 billion, weaker than the consensus of $6.26 billion.
Baker Hughes (BKR) is down more than -4% to lead losers in the Nasdaq 100 after reporting Q4 revenue of $5.90 billion, below the consensus of $6.08 billion.
Sealed Air (SEE) is down more than -3% after UBS downgraded the stock to neutral from buy.
Zions Bancorp (ZION) is down more than -3% after reporting Q4 total deposits of $71.65 billion, well below the consensus of $75.43 billion.
Alphabet (GOOGL) is down more than -1% after Bloomberg reported the U.S. Justice Department could file an antitrust lawsuit against the company as soon as today regarding its dominance over the digital advertising market.
Paccar (PCAR) is up more than +2% to lead gainers in the Nasdaq 100 after reporting Q4 consolidated revenue of $8.13 billion, better than the consensus of $7.48 billion.
Travelers Cos (TRV) is up more than +1% to lead gainers in the Dow Jones Industrials after reporting Q4 revenue of $9.64 billion, stronger than the consensus of $9.45 billion.
HighPeak Energy (HPK) is up more than +6% after the company’s board of directors voted to initiate a process to evaluate strategic alternatives, including a potential sale.
Caesars Entertainment (CZR) is up more than +2% after reporting preliminary Q4 net revenue of $2.81 billion-$2.83 billion, above the consensus of $2.78 billion.
D.R. Horton (DHI) is up more than 1% after reporting Q4 revenue of $7.26 billion, well above the consensus of $6.42 billion.
Across the markets…
March 10-year T-notes (ZNH23) today are up +5 ticks, and the 10-year T-note yield is down -2.2 bp at 3.488%. Strength in European government bonds today is underpinning T-note prices. Also, the weakness in stocks today has boosted some safe-haven buying of T-notes. However, gains in T-notes are limited by supply pressures as the Treasury will auction $42 billion of 2-year T-notes late today as part of this week’s $120 billion auction package of T-notes.
The dollar index (DXY00) today is down by -0.04%. The dollar today is slightly lower as a decline in T-note yields has weakened the dollar’s interest rate differentials. Losses in the dollar are limited as a slide in stocks has sparked some liquidity demand for the dollar.
EUR/USD (^EURUSD) today is up by +0.06% and is just below Monday’s 9-month high. A weaker dollar today is supportive of the euro. EUR/USD also found support today from a Bloomberg report that said the German government on Wednesday would revise its 2023 German GDP estimate to show growth of +0.2% from an October projection of -0.4% contraction.
Today’s economic news was mostly supportive of EUR/USD. The Eurozone Jan S&P Global manufacturing PMI rose +1.0 to a 5-month high of 48.8, stronger than expectations of 48.5. Also, the Jan S&P Global composite PMI rose +0.9 to 50.2, stronger than expectations of 49.8 and the strongest pace of expansion in 7 months. In addition, German Feb GfK consumer confidence rose +3.7 to a 6-month high of -33.9, slightly weaker than expectations of -33.3.
USD/JPY (^USDJPY) today is down by -0.23%. The yen today is moderately stronger. Higher JGB bond yields today are supportive of the yen. Also, today’s economic news that showed the Jan Jibun Bank composite PMI rose from contraction territory for the first time in three months was bullish for the yen.
The Japan Jan Jibun Bank manufacturing PMI was unchanged at 48.9, the steepest pace of contraction in more than two years. However, the Jan Jibun Bank composite PMI rose +1.1 to a 3-month high 50.8.
February gold (GCG3) this morning is up +2.3 (+0.12%), and March silver (SIH23) is down -0.034 (-0.14%). Precious metals prices this morning are mixed, with gold climbing to a new 9-month high. Today’s slump in stocks is boosting the safe-haven demand for precious metals. However, a stronger dollar today is negative for metals prices. Also, higher U.S. and European government bond yields today are weighing on metals prices.
More Stock Market News from Barchart
- Exxon Option Premiums Skew to Puts Ahead of Earnings for Short Income Plays
- Markets Today: Stock Indexes Slip on Negative Corporate News
- Naked Put Screener Results For January 24th
- Pre-Market Brief: Stocks Mixed As Focus Shifts to Big Tech Earnings
On the date of publication, Rich Asplund 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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