Stocks Set To Open Higher As Investors Await Key U.S. GDP Data, Tesla Surges On Sales and Production Optimism

March S&P 500 futures (ESH23) are trending up +0.15% this morning after three major U.S. benchmark indices finished the regular session mixed as investors weighed up the latest batch of corporate earnings ahead of the release of crucial U.S. GDP data. The Nasdaq and S&P 500 indexes were weighted down primarily by losses in the Utilities, Technology, and Industrials sectors, while the Dow ended in the green due to gains in the Telecoms, Consumer Services, and Financials sectors.

In Wednesday’s trading session, shares of Microsoft Corporation (MSFT) recovered most of their losses after the software giant reported mixed quarterly results and released an underwhelming outlook that further fueled growth concerns. Also, Boeing Co (BA), a major Dow component, reversed losses to close about +0.3% higher after the plane maker posted a surprise loss but reported its first positive cash flow since 2018. However, Alphabet Inc (GOOGL) fell over -2% after the company cut another 1,800 jobs in California. 

Meanwhile, shares of Tesla (TSLA) gained over +7% in pre-market trading after the company reported record quarterly revenue and topped EPS estimates. Elon Musk’s upbeat commentary on sales and production outlook during the Q4 earnings call also boosted the leading electric vehicle maker’s stock.

“We’ve had up and down days, that indicates an ongoing tug-of-war. The dour guidance good news from the standpoint of what the Fed is doing is working. Earnings matter, but what’s really got the market’s focus is the Fed interest rate/inflation story,” said Chuck Carlson, a chief executive officer at Horizon Investment Services. 

U.S. rate futures have priced in a 99.7% chance of a 25 basis point rate increase at next week’s monetary policy meeting. 

Fourth-quarter earnings season has shifted into overdrive, with investors anticipating new earnings reports from major global companies, including Visa (V), Mastercard (MA), and Intel (INTC). Analysts anticipate aggregate S&P 500 earnings to decline 3.0% year-over-year in the fourth quarter, compared with an expected drop of 1.6% at the start of the year.

Today, all eyes are focused on the U.S. GDP preliminary data in a couple of hours. Economists, on average, forecast that U.S. GDP will stand at +2.6% q/q in the fourth quarter, compared to the third-quarter value of +3.2% q/q.

Also, investors will likely focus on the U.S. Core Durable Goods Orders data, which was at +0.1% m/m in November. Economists foresee the new figure to be -0.2% m/m.

U.S. Initial Jobless Claims data will be reported today. Economists estimate this figure to be 205K, compared to last week’s value of 190K.

U.S. Durable Goods Orders data will come in today. Economists expect December’s figure to be +2.5% m/m, compared to the previous number of -2.1% m/m.

U.S. New Home Sales data will be reported today as well. Economists foresee this figure to stand at 617K in December, compared to the previous number of 640K.

In the bond markets, United States 10-Year rates are at 3.478%, up +0.47%.

The Euro Stoxx 50 futures are up +0.55% this morning, led by gains in technology and financial services stocks, as better-than-expected quarterly reports from STMicroelectronics, Sabadell, and Nokia eased concerns over the corporate earnings season. STMicroelectronics (STM.FP) surged about +6% after the chipmaker reported stronger-than-anticipated sales in Q4. Also, Banco DE Sabadell Sa (SAB.E.DX) jumped over +9% on the optimistic 2024 net interest income outlook despite reporting a fall in net profit in Q4. In addition, shares of Nokia Oyj (NOKIA.H.DX) climbed more than +4% after the Finnish telecom equipment maker surpassed quarterly operating profit expectations, forecasting higher sales in 2023. 

Italy’s Business Confidence and Italy’s Consumer Confidence data were released today.

The Italian January Business Confidence has been reported at 102.7, stronger than expectations of 101.8.

The Italian January Consumer Confidence stood at 100.9, weaker than expectations of 102.7.

Asian stock markets today closed mixed. Japan’s Nikkei 225 Stock Index (NIK) closed down -0.12%, while the Chinese market was closed for the Lunar New Year holiday.

Japan’s Nikkei 225 Stock Index closed lower following the release of the Bank of Japan’s summary of opinions from last week’s meeting. The index’s downward momentum was fueled by losses in the Banking, Precision Instruments, and Real Estate sectors. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down 1.02% to 17.51.

Pre-Market U.S. Stock Movers

Seagate Technology PLC (STX) gained over +7% in pre-market trading after the company reported upbeat Q2 results.

Levi Strauss & Co Class A (LEVI) climbed more than +5% in pre-market trading after the denimwear company reported stronger-than-expected Q4 profits and released an optimistic outlook for 2023.

Chevron Corp (CVX) rose over +2% in pre-market trading after the company increased the quarterly dividend to $1.51 a share and announced a $75B buyback.

Wolfspeed Inc (WOLF) plunged about -8% in pre-market trading after the company reported mixed Q2 results.

International Business Machines (IBM) fell about -2% in pre-market trading after the company reported mixed Q4 results and announced a 1.5% workforce cut.

Pfizer Inc (PFE) slid about -2% in pre-market trading after UBS downgraded the stock to neutral from buy with a price target of $47, down from $55.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - January 26th

Visa A (V), Louis Vuitton ADR (LVMUY), Mastercard (MA), Comcast (CMCSA), SAP ADR (SAP), Intel (INTC), Blackstone Group (BX), Diageo ADR (DEO), Marsh McLennan (MMC), Northrop Grumman (NOC), Sherwin-Williams (SHW), KLA Corp (KLAC), Atlas Copco AB (ATLKY), Atlas Copco ADR (ATLCY), Valero Energy (VLO), Archer-Daniels-Midland (ADM), Volvo ADR (VLVLY), Arthur J Gallagher (AJG), Dow (DOW), Nucor (NUE), L3Harris Technologies (LHX), Xcel Energy (XEL), ResMed (RMD), Resmed DRC (RSMDF), Rockwell Automation (ROK), T Rowe (TROW), Nokia ADR (NOK), Weyerhaeuser (WY), Tractor Supply (TSCO), Southwest Airlines (LUV), McCormick & Comp (MKCv), PTT Exploration & Production (PEXNY), McCormick&Co (MKC), WR Berkley (WRB), 3i ADR (TGOPY), NVR (NVR), Royal Caribbean Cruises (RCL), Fair Isaac (FICO), Novozymes AS (NVZMY), Sumitomo Mitsui Trust Holdings PK (SUTNY), First Citizens BancShares (FCNCA), Eastman Chemical (EMN), American Airlines (AAL), Telia ADR (TLSNY), East West Bancorp (EWBC), Nitto Denko Corp (NDEKY), Cullen/Frost Bankers (CFR), Robert Half (RHI), Webster Financial (WBS), Olin (OLN), Old Republic (ORI), United States Steel (X), Murphy Oil (MUR), Alaska Air (ALK), Banco de Sabadell ADR (BNDSY), South State (SSB), Valley National (VLY), Eagle Materials (EXP), United Bankshares (UBSI), Glacier (GBCI), Applied Industrial Technologies (AIT), Appfolio Inc (APPF), First Interstate BancSystem (FIBK), Virtu Financial Inc (VIRT), Associated Banc-Corp (ASB), Ameris (ABCB), Federated Investors B (FHI), PacWest (PACW), WSFS (WSFS), CNX Resources (CNX), Pacific Premier (PPBI), Eastern Bankshares (EBC), Xerox (XRX), JetBlue (JBLU), Axos Financial (AX), First Merchants (FRME), NetScout (NTCT), First Financial Bancorp (FFBC), Towne Bank (TOWN), Bread Financial Holdings (BFH), Carpenter Technology (CRS), Seacoast Banking Florida (SBCF), The Bancorp (TBBK), Matsui Securities ADR (MAUSY), Sandy Spring (SASR), OSI Systems (OSIS), Meridian (VIVO), Heartland Express (HTLD), OFG Bancorp (OFG), S&T Bancorp (STBA), Berkshire Hills Bancorp (BHLB), Lakeland Bancorp (LBAI), Matthews (MATW).

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