March S&P 500 futures (ESH23) are trending down -0.86% this morning as disappointing earnings from U.S. tech giants weighed on market sentiment ahead of a key U.S. nonfarm payrolls report.
In Thursday’s trading session, the S&P 500 and Nasdaq extended Wednesday’s rally and posted 5-1/4 month highs after a more dovish-than-expected message from Federal Reserve Chair Jerome Powell fueled speculation that the Fed might end its interest rate hike campaign sooner rather than later. At the same time, the Dow underperformed, weighed down by losses in healthcare stocks.
Economic data on Thursday showed weekly initial jobless claims dropped to a nine-month low of 183K, indicating the labor market’s resilience. At the same time, nonfarm productivity accelerated to +3.0% q/q in the fourth quarter, stronger than expectations of +2.4% q/q.
On the earnings front, shares of Apple (AAPL) slid over -3% in pre-market trading after the iPhone maker posted a weaker-than-expected first-quarter earnings report, missing analyst expectations on revenue, profit, and sales for many of its lines of business. Also, Amazon (AMZN) dropped more than -5% in pre-market trading after the tech and retailing giant reported mixed fourth-quarter results and provided light first-quartet guidance. In addition, Alphabet (GOOGL) fell about -4% in pre-market trading after the company missed analyst expectations in the fourth quarter.
Today, all eyes are focused on the U.S. Nonfarm Payrolls data in a couple of hours. Economists, on average, forecast that January Nonfarm Payrolls will stand at 185K, compared to the previous value of 223K.
Also, investors are likely to focus on the U.S. ISM Non-Manufacturing PMI data, which was at 49.6 in December. Economists foresee the new figure to be 50.4.
U.S. Average Hourly Earnings data will be reported today. Economists foresee this figure to stand at +0.3% m/m and +4.3% y/y in January, compared to the previous numbers of +0.3% m/m and +4.6% y/y.
U.S. Unemployment Rate data will come in today. Economists expect January’s figure to be 3.6%, compared to the previous figure of 3.5%.
U.S. Private Nonfarm Payrolls data will also be closely watched today. Economists forecast Private Nonfarm Payrolls to be at 190K in January, compared to December’s value of 220K.
S&P Global will release Composite PMI data for January today. Economists expect U.S. Composite PMI to stand at 46.6, compared to the previous number of 45.0.
U.S. Services PMI data will be reported today as well. Economists estimate this figure to be 46.6 in January, compared to 44.7 in December.
In the bond markets, United States 10-Year rates are at 3.394%, down -0.12%.
The Euro Stoxx 50 futures are down -0.49% this morning as market participants digested crucial central bank interest rate decisions, economic data, and a slew of corporate earnings. The European Central Bank raised interest rates by 50 basis points and indicated at least one hike of the same scale in March before re-assessing its rate hike path. At the same time, the Bank of England raised rates by half a percentage point to the highest level since 2008, delivering its tenth consecutive rate increase. However, the bank’s officials softened their tone on future hikes and said further increases would hinge on evidence of more persistent price pressures. In corporate news, shares of Sanofi (SAN.FP) dropped about -3% after the French drugmaker reported mixed Q4 results, forecasting moderate FY2023 earnings growth.
Spain’s Services PMI, Italy’s Services PMI, France’s S&P Global Composite PMI, France’s Services PMI, Germany’s Composite PMI, Germany’s Services PMI, Eurozone’s S&P Global Composite PMI, Eurozone’s Services PMI, U.K.’s Composite PMI, U.K.’s Services PMI, and Eurozone’s PPI data were released today.
The Spanish January Services PMI stood at 52.7, stronger than expectations of 52.5.
The Italian January Services PMI came in at 51.2, stronger than expectations of 51.0.
The French January S&P Global Composite PMI has been reported at 49.1, stronger than expectations of 49.0.
The French January Services PMI was 49.4, stronger than expectations of 49.2.
The German January Composite PMI stood at 49.9, stronger than expectations of 49.7.
The German January Services PMI came in at 50.7, stronger than expectations of 50.4.
Eurozone January S&P Global Composite PMI has been reported at 50.3, stronger than expectations of 50.2.
Eurozone January Services PMI came in at 50.8, stronger than expectations of 50.7.
U.K. January Composite PMI was at 48.5, stronger than expectations of 47.8.
U.K. January Services PMI stood at 48.7, stronger than expectations of 48.0.
Eurozone December PPI came in at +1.1% m/m and +24.6% y/y, stronger than expectations of -0.4% m/m and +22.5% y/y.
Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.68%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.39%.
China’s Shanghai Composite today closed lower after mixed economic data raised concerns over a quick recovery in the country. Data released Friday showed the country’s Caixin Services PMI roared back to 52.9 in January after four months of declines. At the same time, a private survey released earlier this week showed that small manufacturing businesses were still struggling with rising COVID-19 cases and remaining supply chain issues.
Japan’s Nikkei 225 Stock Index closed higher, fueled by gains in the Transportation Equipment, Electrical/Machinery, and Precision Instruments sectors. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down 6.21% to 16.46.
Pre-Market U.S. Stock Movers
Bill Com Holdings Inc (BILL) plunged about -21% in pre-market trading despite Q2 earnings beat as the payment software provider’s FY23 earnings guidance fell short of expectations.
Qualcomm Incorporated (QCOM) fell over -3% in pre-market trading after the company reported mixed Q1 results and issued in-line Q2 guidance.
Starbucks Corporation (SBUX) dropped about -2% in pre-market trading after the company reported downbeat Q1 results.
Ford Motor Company (F) slid more than -5% in pre-market trading after the company reported mixed Q4 results.
Gilead Sciences Inc (GILD) gained over +4% in pre-market trading after the company posted better-than-expected Q4 results. Also, Piper Sandler raised the firm’s price target on the stock to $112 from $111.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Friday - February 3rd
Cigna (CI), Regeneron Pharma (REGN), Aon (AON), Itochu ADR (ITOCY), LyondellBasell Industries (LYB), Assa Abloy AB (ASAZY), Coloplast A (CLPBY), Zimmer Biomet (ZBH), Church&Dwight (CHD), Avantor (AVTR), Brookfield Renewable (BEP), Cboe Global (CBOE), Brookfield Renewable (BEPC), Santander Chile ADR (BSAC), Saia (SAIA), Minebea Mitsumi ADR (MNBEY), Brookfield Business (BBU), Moog (MOGa), Moog B (MOGb), ArcBest Corp (ARCB), Piper Sandler (PIPR), GrafTech (EAF), Virtus (VRTS), Nippon Suisan Kaisha ADR (NISUY), Sun Country Airlines Holdings (SNCY), TomTom ADR (TMOAY), WisdomTree (WT), Bristow Inc (VTOL), Gorman-Rupp (GRC), Johnson Outdoors (JOUT), Capital Product (CPLP), Twin Disc (TWIN).
More Stock Market News from Barchart
- Tech Stocks Surge on Interest Rate Optimism and Strength in Meta Platforms
- Mega-Cap Earnings Results Will Test Tech Rally
- Stocks Rally and Bond Yields Fall on Speculation Rate Hikes Nearing an End
- Bumble (BMBL) Attracts Bearish Interest and It’s Not Surprising
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.
/AI%20(artificial%20intelligence)/Data%20Center%20by%20Caureem%20via%20Shutterstock%20(2).jpg)
/PayPal%20Holdings%20Inc%20HQ%20photo-by%20bennymarty%20via%20iStock.jpg)
/Micron%20Technology%20Inc_%20logo%20on%20building-by%20vzphotos%20vis%20iStock.jpg)
