March S&P 500 futures (ESH23) are trending down -0.30% this morning after three major U.S. benchmark indices closed higher on Thursday as better-than-expected U.S. economic growth data overshadowed a string of mixed corporate earnings. Three major U.S. stock indexes were fueled primarily by gains in the Oil & Gas, Technology, and Consumer Goods sectors.
In Thursday’s trading session, the S&P 500 and Nasdaq 100 posted 6-week highs, and the Dow notched a 1-week high, led by gains in tech stocks after Tesla (TSLA) reported record quarterly revenue and topped EPS estimates. In addition, Las Vegas Sands Corp (LVS) surged about +6% after the casino operator reported weaker-than-expected Q4 results but expressed optimism about demand this year. Also, analysts from Barclays, Citi, JPMorgan, Wells Fargo, BofA, Stifel, and Deutsche Bank lifted the price target for Las Vegas Sands.
Meanwhile, shares of Intel Corporation (INTC) plunged over -9% in pre-market trading after the chip maker reported fourth-quarter results that fell short of expectations and gave weaker-than-expected guidance for the current quarter as customers hold back on tech spending.
On the economic front, the Commerce Department’s preliminary reading showed that the U.S. economy grew at a +2.9% annualized rate in the fourth quarter, stronger than expectations of +2.6%, as consumers boosted spending on goods. Also, the Labor Department report on Thursday showed claims for state unemployment benefits fell -6,000 to a 9-month low of 186K, stronger than expectations of 205K, pointing to a robust labor market.
“On balance, the data being better than expected suggests there's more resilience in the economy than many have given it credit. The fact that inflation figures in the Q4 data moderated suggests it's a Goldilocks scenario,” said Joe Manimbo, a senior market analyst at Convera in Washington.
Fourth-quarter earnings season rolls on, with investors awaiting fresh reports from major global companies, including Chevron (CVX), American Express (AXP), and Charter Communications Inc (CHTR). Analysts estimate aggregate S&P 500 earnings to fall 2.7% year-over-year in Q4, compared with an expected drop of 1.6% at the start of the year.
Today, all eyes are focused on the U.S. core personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, in a couple of hours. Economists, on average, forecast that the Core PCE Price Index will stand at +0.3% m/m and +4.4% y/y in December, compared to the previous values of +0.2% m/m and +4.7% y/y.
Also, investors will likely focus on the U.S. Pending Home Sales data, which was at -4.0% m/m in November. Economists foresee the new figure to be -0.9% m/m.
U.S. Personal Spending data will be reported today. Economists foresee this figure to stand at -0.1% m/m in December, compared to the previous number of +0.1% m/m.
U.S. Michigan Consumer Sentiment Index will come in today. Economists expect January’s figure to be 64.6, compared to 59.7 in December.
U.S. Michigan Consumer Expectations Index will be reported today as well. Economists estimate this figure to be 62.0 in January, compared to December’s value of 59.9.
In the bond markets, United States 10-Year rates are at 3.548%, up +1.63%.
The Euro Stoxx 50 futures are up +0.02% this morning as investors digested U.S. economic data and a batch of earnings results, remaining cautious ahead of a slew of central bank meetings next week. Investor’s attention now turns to next week’s prominent central bank meetings, including the Federal Reserve, the European Central Bank, and the Bank of England. In corporate news, shares of H&M (HMB.S.DX) tumbled over -5% after the world’s second-biggest fashion retailer reported a larger-than-expected drop in September-November operating profit amid weak consumer confidence and rising costs.
France’s Consumer Confidence, Spain’s GDP (preliminary), and Eurozone M3 Money Supply data were released today.
The French January Consumer Confidence has been reported at 80, weaker than expectations of 83.
The Spanish GDP stood at +0.2% q/q in the fourth quarter, stronger than expectations of +0.1% q/q.
Eurozone December M3 Money Supply came in at 4.1% y/y, weaker than expectations of 4.6% y/y.
Most Asian stock markets today settled in the green. Japan’s Nikkei 225 Stock Index (NIK) closed up +0.07%, while the Chinese market was closed for the Lunar New Year holiday.
Japan’s Nikkei 225 Stock Index closed slightly higher after data revealed that inflation in the country’s capital rose more than anticipated in January, heralding a similar trend in nationwide CPI inflation. The outlook for local stocks has been clouded by uncertainty over the Bank of Japan’s monetary policy plans amid rising inflation that hit a 41-year high. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down 1.02% to 17.51.
The Japanese January Tokyo Core CPI has been reported at +4.3% y/y, stronger than expectations of +4.2% y/y.
Pre-Market U.S. Stock Movers
Visa Inc Class A (V) rose over +1% in pre-market trading after the company reported upbeat Q1 results.
L3Harris Technologies Inc (LHX) climbed about +5% in pre-market trading after the company reported better-than-expected Q4 results and provided promising FY2023 guidance.
BuzzFeed Inc (BZFD) jumped more than +16% in pre-market trading, extending yesterday’s gains after WSJ reported that the company intends to use ChatGPT creator for some content.
General Mills Inc (GIS) rose about +1% in pre-market trading after UBS upgraded the stock to buy from neutral with a price target of $88, up from $85.
Hasbro Inc (HAS) slid over -5% in pre-market trading after the company provided below-consensus preliminary Q4 results and announced 1,000 jobs cut.
Iovance Biotherapeutics Inc (IOVA) gained about +4% in pre-market trading after Piper Sandler upgraded the stock to overweight from neutral with a price target of $14, up from $11.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Friday - January 27th
Chevron (CVX), American Express (AXP), Charter Communications (CHTR), HCA (HCA), Colgate-Palmolive (CL), Roper Technologies (ROP), Bank Rakyat (BKRKY), Fanuc Corporation (FANUY), Bank Mandiri Persero ADR (PPERY), Church&Dwight (CHD), POSCO (PKX), Booz Allen Hamilton (BAH), VF (VFC), Autoliv (ALV), Gentex (GNTX), SSAB ADR (SSAAY), LG Display (LPL), Badger Meter (BMI), First Hawaiian (FHB), Moog (MOGa), First Bancorp (FBP), Hilltop (HTH), Provident (PFS), Dime Community (DCOM), Southside (SBSI), Tompkins (TMP), Republic Bancorp (RBCAA), CBTX (CBTX).
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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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