Morning Markets
March S&P 500 futures (ESH23) this morning are up +0.22%, and March Nasdaq 100 E-Mini futures (NQH23) are up +0.18%.Â
U.S. stock index futures this morning erased overnight losses and are slightly higher, and T-note yields fell after this morning’s report on the U.S. Q4 employment cost index rose less than expected and eased wage pressure concerns.  The U.S. Q4 employment cost index rose +1.0% q/q, weaker than expectations of +1.1% q/q and the slowest pace of increase in a year.
A decline in bond yields today is supportive for stocks, with the 10-year T-note yield down -3.3 bp to 3.503% and the 10-year German bund yield down -3.9 bp to 2.279%.
Stock indexes in overnight trade initially retreated as a slide in semiconductor stocks in pre-market trading led technology stocks lower. Samsung Electronics said it expected the smartphone market to contract in 2023, and NXP Semiconductors forecasted Q1 revenue of $2.90 billion to $3.10 billion, weaker than the consensus of $3.16 billion.
Negative corporate news also weighed on stocks. Caterpillar fell more than -4% in pre-market trading after reporting weaker than expected Q4 adjusted EPS, and McDonald’s dropped more than -2% after reporting weaker than expected Q4 and full-year operating margins.Â
On the positive side, General Motors is up more than +4% % in pre-market trading after reporting stronger-than-expected Q4 adjusted EPS and forecasting better-than-expected 2023 adjusted EPS. Also, UPS is up more than +% after reporting better-than-expected Q4 adjusted EPS.
Overseas markets are weaker. The Euro Stoxx 50 index is down -0.13%.  China’s Shanghai Composite stock index closed down -0.42%, and Japan’s Nikkei Stock index closed down -0.39%.Â
The Euro Stoxx 50 index today is moderately lower on weakness in bank stocks after UBS AG dropped more than -2% when it reported Q4 equities sales and trading revenue of $883 million, weaker than the consensus of $1.06 billion. Losses in the overall market were limited after today’s economic news showed Eurozone Q4 GDP unexpectedly expanded. Also, signs of strength in Germany’s labor market were supportive for stocks after German Jan unemployment unexpectedly declined.
Eurozone Q4 GDP rose +0.1% q/q and +1.9%y/y, stronger than expectations of -0.1% q/q and +1.7% y/y.
German Dec retail sales fell -5.3% m/m, weaker than expectations of -0.2% m/m and the steepest decline in 17 months.
German Jan unemployment unexpectedly fell -22,000, the biggest decline in 11 months, and a stronger labor market than expectations of a +5,000 increase.
France Dec consumer spending unexpectedly fell -1.3% m/m, weaker than expectations of +0.3% m/m.
China’s Shanghai Composite fell moderately today on weakness in property and real estate stocks on signs that China’s property market remains in turmoil after today’s news showed China Jan new home sales fell -32.5% y/y.  Stocks declined today even after economic reports showed Chinese manufacturing and services activity expanded in January for the first time in four months as Covid Zero policies were ended.
The China Jan manufacturing PMI rose +3.1 to 50.1, right on expectations and the fastest pace of expansion in 4 months. Â Also, the Jan non-manufacturing PMI rose +12.8 to 54.4, stronger than expectations of 52.0 and the fastest pace of expansion in 7 months.
Japan’s Nikkei Stock Index today closed moderately lower. Weakness in Japanese technology stocks led the Nikkei Stock Index lower after Samsung Electronics posted weaker-than-expected Q4 earnings. Also, weaker-than-expected quarterly earnings results from Nippon Light Metal, Daiichi Sankyo, and Nomura Research Institute weighed on the overall market. Losses were limited on better-than-expected economic reports today on Japan's Dec industrial production, Dec retail sales, and Jan consumer confidence.
The Japan Jan consumer confidence index rose +0.7 to a 5-month high of 31.0, stronger than expectations of 30.5.
Japan Dec industrial production fell -0.1% m/m, stronger than expectations of -1.0% m/m.
Japan Dec retail sales rose +1.1% m/m, stronger than expectations of +0.7% m/m.
Pre-Market U.S. Stock Movers
Semiconductor stocks are falling in pre-market trading after Samsung Electronics said it expected the smartphone market to contract in 2023, and NXP Semiconductors forecasted Q1 revenue of $2.90 billion to $3.10 billion, weaker than the consensus of $3.16 billion. As a result, NXP Semiconductors (NXPI) is down more than -4%. Also, Micron Technology (MU) is down more than -3%. In addition, Nvidia (NVDA), Qualcomm (QCOM), Advanced Micro Devices (AMD), and Intel (INTC) are down more than -1%.Â
Energy stocks and energy service providers are under pressure in pre-market trading, with the price of WTI crude down more than -1% at a 3-week low. ConocoPhillips (COP), Chevron (CVX), Devon Energy (DVN), Diamondback Energy (FANG), Occidental Petroleum (OXY), Marathon Oil (MRO), and Valero Energy (VLO) are down more than -1%.Â
Caterpillar (CAT) tumbled more than -4% in pre-market trading after reporting Q4 adjusted EPS of $3.86, weaker than the consensus of $3.97.
Pfizer (PFE) slid more than -2% in pre-market trading after forecasting 2023 adjusted EPS of $3.25-$3.45, well below the consensus of $4.31.
Exxon Mobil (XOM) dropped more than -3% in pre-market trading after reporting Q4 total revenue and other income of $95.43 billion, below the consensus of $96.53 billion.Â
McDonald’s (MCD) slipped more than -2% in pre-market trading after reporting Q4 operating margin of 43.6%, below the consensus of 45.45%, and forecasting 2023 operating margin of 45%, weaker than the consensus of 46.5%.
General Motors (GM) climbed more than +4% in pre-market trading after reporting Q4 adjusted EPS of $2.12, stronger than the consensus of $1.67, and forecasting 2023 adjusted EPS of $6.00-$7.00, above the consensus of $5.70.
United Parcel Service (UPS) rose more than +1% in pre-market trading after reporting Q4 adjusted EPS of 3.62, better than the consensus of $3.58.
Comstock Resources (CRK) jumped more than +6% in pre-market trading after it was announced the company would replace Agree Realty in the S&P SmallCap 600 Index before the opening of trading on Feb 6.
Spotify Technology (SPOT) surged more than +8% in pre-market trading after reporting Q4 monthly active users of 489 million, above the consensus of 478.5 million and forecasting Q1 total premium subscribers of 207 million, better than the consensus of 2-5.8 million.
Marathon Petroleum (MPC) rose more than +1% in pre-market trading after reporting Q4 adjusted EPS of $6.65, stronger than the consensus of $5.64.
Today’s U.S. Earnings Reports (1/31/2023)
A O Smith Corp (AOS), Advanced Micro Devices Inc (AMD), Amgen Inc (AMGN), Boston Properties Inc (BXP), Caterpillar Inc (CAT), Chubb Ltd (CB), Corning Inc (GLW), Dover Corp (DOV), Edwards Lifesciences Corp (EW), Electronic Arts Inc (EA), Exxon Mobil Corp (XOM), General Motors Co (GM),Â
IDEX Corp (IEX), International Paper Co (IP), Juniper Networks Inc (JNPR), Marathon Petroleum Corp (MPC), Match Group Inc (MTCH), McDonald's Corp (MCD), Mondelez International Inc (MDLZ), Moody's Corp (MCO), MSCI Inc (MSCI), NVR Inc (NVR), Pentair PLC (PNR), Pfizer Inc (PFE), Phillips 66 (PSX),Â
PulteGroup Inc (PHM), Stryker Corp (SYK), Sysco Corp (SYY), United Parcel Service Inc (UPS), and Western Digital Corp (WDC).
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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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