March S&P 500 futures (ESH23) are trending down -0.41% this morning after three major U.S. benchmark indices finished the regular session higher as market participants weighed up economic data and a slew of earnings reports ahead of the Federal Reserve’s interest-rate policy decision. Three major U.S. stock indexes were fueled primarily by gains in the Basic Materials, Consumer Goods, and Industrials sectors.
All three major U.S. stock indexes rallied to end the session +1.09% to +1.67% higher after data showed U.S. Employment Cost Index increased at its slowest pace in a year to +1.0% q/q in the fourth quarter as wage growth slowed. Other data showed consumer confidence unexpectedly fell to 107.1 in January as consumers continued to worry about the economy’s prospects in the near term. In addition, the U.S. S&P/CS HPI Composite - 20 n.s.a. stood at +6.8% y/y, increasing at its slowest pace in two years.
“The fact that we have had goods inflation cooling, we have had housing cool, and the last shoe to drop is probably this labor services inflation – we may be getting early indications of that,” said Mona Mahajan, a senior investment strategist at Edward Jones.
On the earnings front, shares of General Motors (GM) jumped over +8% after its Q4 results surpassed Wall Street consensus, and the automaker delivered upbeat FY23 earnings guidance. Also, PulteGroup (PHM) climbed more than +9% after the homebuilder reported better-than-expected Q4 earnings. At the same time, Snap Inc (SNAP) plunged about -15% in pre-market trading after the company reported mixed Q4 results and issued a gloomy Q1 forecast.
Today, all eyes are focused on the U.S. Federal Reserve’s first policy decision of the year. The central bank is widely expected to slow the pace of rate hikes to 25 basis points, bringing the federal funds rate target range to 4.50%-4.75%. In addition, market participants will closely monitor Fed Chair Jerome Powell’s statement for more signals on the path of monetary policy.
Also, investors are likely to focus on the U.S. ADP Nonfarm Employment Change data, which was at 235K in December. Economists foresee the new figure to be 178K.
Markit Economics will release U.S. Manufacturing PMI data for January today. Economists expect Manufacturing PMI to stand at 46.8, compared to December’s value of 46.2.
U.S. ISM Manufacturing Employment will be reported today. Economists foresee this figure to stand at 49.0 in January, compared to 51.4 in December.
U.S. ISM Manufacturing PMI will come in today. Economists expect January’s figure to be 48.0, compared to the previous number of 48.4.
U.S. JOLTs Job Openings data will also be closely watched today. Economists forecast JOLTs Job Openings to be at 10.250M in December, compared to the previous figure of 10.458M.
U.S. Crude Oil Inventories data will be reported today as well. Economists estimate this figure to be +0.376M, compared to last week’s value of +0.533M.
In the bond markets, United States 10-Year rates are at 3.481%, down -1.36%.
The Euro Stoxx 50 futures are up +0.07% this morning, with investors awaiting more cues on the path of monetary policy from a Federal Reserve meeting later in the day. At the same time, the European Central Bank and the Bank of England are set to release their latest rate decisions on Thursday, with both expected to hike by 50 basis points. On the positive side, preliminary data showed that inflation in the Eurozone slowed by more than expected in January, standing at -0.4% m/m and +8.5% y/y, compared to expectations of -0.3% m/m and +9.0% y/y. In corporate news, shares of Husqvarna Ab (HUSQB.S.DX) climbed about +4% after the company’s operating loss contracted on an annual basis, driven by an organic sales growth of 8%.
U.K.’s Nationwide HPI, Spain’s Manufacturing PMI, Italy’s Manufacturing PMI, France’s Manufacturing PMI, Germany’s Manufacturing PMI, Eurozone’s Manufacturing PMI, U.K.’s Manufacturing PMI, Italy’s CPI (preliminary), and Eurozone’s Unemployment Rate data were also released today.
U.K. January Nationwide HPI has been reported at -0.6% m/m and +1.1% y/y, weaker than expectations of -0.3% m/m and +1.9% y/y.
The Spanish January Manufacturing PMI stood at 48.4, stronger than expectations of 48.0.
The Italian January Manufacturing PMI came in at 50.4, stronger than expectations of 49.6.
The French January Manufacturing PMI was at 50.5, weaker than expectations of 50.8.
The German January Manufacturing PMI stood at 47.3, stronger than expectations of 47.0.
Eurozone January Manufacturing PMI was at 48.8, in line with expectations.
U.K. January Manufacturing PMI came in at 47.0, stronger than expectations of 46.7.
The Italian January CPI stood at +0.2% m/m and +10.1% y/y, compared to expectations of +0.1% m/m and +10.1% y/y.
Eurozone December Unemployment Rate was 6.6%, weaker than expectations of 6.5%.
Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.90%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.07%.
China’s Shanghai Composite today closed higher even after a private survey showed that the country’s manufacturing sector shrank in January despite the relaxation of COVID-19 curbs. The reading demonstrated that small companies were still struggling with weak demand and rising COVID-19 infections.
The Chinese January Caixin Manufacturing PMI stood at 49.2, weaker than expectations of 49.5.
At the same time, Japan’s Nikkei 225 Stock Index lagged its Asian peers and closed slightly higher after data showed that the country’s manufacturing sector contracted further in January. The index’s upward momentum was fueled by gains in the Marine Transport, Chemical, and Machinery sectors. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up 1.00% to 17.14.
Pre-Market U.S. Stock Movers
Western Digital Corporation (WDC) slid over -5% in pre-market trading after the company reported a wider-than-expected Q2 earnings loss.
Electronic Arts Inc (EA) tumbled about -11% in pre-market trading after the company reported mixed Q3 results and its holiday bookings fell short of expectations.
Advanced Micro Devices Inc (AMD) rose more than +3% in pre-market trading after the company reported upbeat Q4 results and issued a better-than-expected forecast.
Jasper Therapeutics Inc (JSPR) climbed over +7% in pre-market trading after Carlyle disclosed a $4.7M insider buy.
Taysha Gene Therapies Inc (TSHA) sank about -19% in pre-market trading after the company provided an update on the TSHA-120 program in GAN and a corporate outlook for 2023.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Wednesday - February 1st
Meta Platforms (META), Novo Nordisk ADR (NVO), Alibaba ADR (BABA), Thermo Fisher Scientific (TMO), Novartis ADR (NVS), T-Mobile US (TMUS), Altria (MO), GSK plc DRC (GSK), Boston Scientific (BSX), Humana (HUM), Waste Management (WM), MetLife (MET), Enterprise Products Partners LP (EPD), McKesson (MCK), Hitachi ADR (HTHIY), Johnson Controls (JCI), Corteva (CTVA), Aflac (AFL), BBVA ADR (BBVA), Orsted ADR (DNNGY), Old Dominion Freight Line (ODFL), Otis Worldwide (OTIS), Allstate (ALL), AmerisourceBergen (ABC), Vodafone Group ADR (VOD), Fortive (FTV), Align (ALGN), CGI Inc (GIB), Hologic (HOLX), Mid-America Apartment (MAA), Kyocera ADR (KYOCY), PTC (PTC), American Financial (AFG), Nomura ADR (NMR), Globe Life (GL), CH Robinson (CHRW), Qorvo Inc (QRVO), Dynatrace Holdings LLC (DT), WestRock Co (WRK), Regal Beloit (RRX), Tetra Tech (TTEK), UGI (UGI), ChampionX Corp (CHX), DXC Technology (DXC), Littelfuse (LFUS), Landstar (LSTR), Murphy USA Inc (MUSA), Evercore (EVR), Axfood ADR (AXFOY), Rayonier (RYN), Turkiye Garanti Bankasi AS (TKGBY), Atkore Intl (ATKR), Silicon Labs (SLAB), Kilroy (KRC), The Hanover Insurance (THG), Peloton Interactive (PTON), SLM (SLM), Avnet (AVT), MGIC Investment (MTG), Scotts Miracle-Gro (SMG), Meritage (MTH), Spire (SR), MaxLinear (MXL), ELF Beauty (ELF), Kulicke&Soffa (KLIC), Sitime Corp (SITM), Century Communities (CCS), Nustar (NS), Brinker (EAT), Vista Outdoor Inc (VSTO), M/I Homes (MHO), Allegiant (ALGT), Enova International Inc (ENVA), Universal (UVV), Modine Manufacturing (MOD), Core Laboratories (CLB), Brandywine (BDN), Columbus McKinnon (CMCO).
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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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