Futures are Signaling a Weak Open for Wall Street, Disney Earnings On Tap

March S&P 500 futures (ESH23) are down -0.30%, and March Nasdaq 100 E-Mini futures (NQH23) are down -0.34% this morning after three major U.S. benchmark indices finished the regular session higher as market participants digested less hawkish than expected comments from Federal Reserve Chair Jerome Powell as well as a fresh batch of earnings reports. Three major U.S. stock indexes were fueled primarily by gains in the Communication Services, Energy, and Technology sectors.

U.S. Federal Reserve Chair Jerome Powell said on Tuesday that the red-hot jobs report released last week underscored the central bank has more work to do to bring inflation down to the 2% target. Also, Fed Chair acknowledged disinflation again and said he expects 2023 to be a year of “significant declines in inflation.” At the same time, Powell cautioned that if more jobs reports or inflation data come in well above expectations, the Fed may raise interest rates more than markets expect.

“On the back of Powell's appearance, we are adding a 25bp to the May FOMC meeting, bringing our expectation for the peak rate to 5.00% to 5.25%,” Morgan Stanley said in a note.

Federal Reserve Bank of Minneapolis President Neel Kashkari also said on Tuesday that January’s strong U.S. jobs report shows the Fed has more work to do in tightening policy, keeping his rate outlook “at around 5.4%” for the fed funds target.

In Tuesday’s trading session, shares of Microsoft Corporation (MSFT) climbed over +4%, boosting the Nasdaq and S&P 500 indexes after the company announced the integration of OpenAI’s chatbot, ChatGPT, into its products. Also, Dupont De Nemours Inc (DD) rose over +7% after the company reported a higher-than-expected quarterly profit and raised its dividend by 9%. 

Fourth-quarter earnings season rolls on, with investors awaiting new quarterly reports from major global companies, including Walt Disney (DIS), CVS Health Corp (CVS), and Uber Tech (UBER). Analysts, meanwhile, expect year-over-year earnings from S&P 500 companies to decline 3.1% in the fourth quarter.

Today, all eyes are focused on the U.S. Crude Oil Inventories data in a couple of hours. Economists, on average, estimate this figure to stand at +2.457M, compared to last week’s value of +4.140M.

Also, investors are likely to focus on the U.S. Wholesale Trade Sales data, which was at -0.6% m/m in November. Economists foresee the new figure to be -0.3% m/m.

U.S. Gasoline Inventories data will be reported today as well. Economists forecast this figure to be at +1.271M, compared to last week’s value of +2.576M.

In the bond markets, United States 10-Year rates are at 3.655%, down -0.53%.

The Euro Stoxx 50 futures are up +0.67% this morning as market participants digested the latest comments from U.S. Federal Reserve Chair Jerome Powell and positive earnings results. European stocks have received a positive handover from an upbeat session on Wall Street, with chemicals stocks notching the biggest gains. In corporate news, shares of Neste Oyj (NESTE.H.DX) jumped over +9% after the Finnish refiner reported better-than-expected fourth-quarter operating results.

France’s Non-Farm Payrolls (preliminary) and Italy’s Retail Sales data were released today.

The French Non-Farm Payrolls stood at 0.0% q/q in the fourth quarter, weaker than expectations of +0.2% q/q.

The Italian December Retail Sales came in at -0.2% m/m, stronger than expectations of -0.8% m/m.

Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.49%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.29%.

China’s Shanghai Composite today closed lower as investors braced for new inflation data for January due later this week. The reading is expected to throw some light on a potential economic recovery this year after China lifted most COVID-19 curbs.

At the same time, Japan’s Nikkei 225 Stock Index closed lower today, weighed down by disappointing results from Nintendo Co Ltd, Softbank Group Corp, and Sharp Corp. Also, data on Wednesday showed the country’s current account surplus contracted significantly to 0.033T in December. The reading and a series of soft earnings reports spurred worries about slowing economic growth in the world’s third-largest economy. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -0.12% to 16.56.

Pre-Market U.S. Stock Movers

Fortinet Inc (FTNT) climbed over +11% in pre-market trading after the company reported mixed Q4 results but posted better-than-expected Q1 and FY23 guidance.

Enphase Energy Inc (ENPH) jumped about +10% in pre-market trading after the company reported better-than-expected Q4 adjusted earnings and posted the above-consensus Q1 guidance.

Lumen Technologies Inc (LUMN) plunged about -14% in pre-market trading after the company reported upbeat Q4 results but guided to lower-than-expected 2023 cash flow and EBITDA.

Chipotle Mexican Grill Inc (CMG) slid over -5% in pre-market trading after the company reported downbeat Q4 results.

Sherwin-Williams Co (SHW) fell more than -1% in pre-market trading after KeyBanc downgraded the stock to sector weight from overweight without a price target.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - February 8th

Walt Disney (DIS), TotalEnergies SE ADR (TTE), CVS Health Corp (CVS), Uber Tech (UBER), Eaton (ETN), CME Group (CME), Emerson (EMR), Brookfield (BAM), Dominion Energy (D), O’Reilly Automotive (ORLY), AP Moeller-Maersk AS (AMKBY), Yum! Brands (YUM), Sun Life Financial (SLF), Vestas Wind (VWSYF), Vestas Wind Systems AS (VWDRY), IFF (IFF), Equifax (EFX), CDW Corp (CDW), Svenska Handelsbanken PK (SVNLY), Societe Generale ADR (SCGLY), AvalonBay (AVB), Monolithic (MPWR), Fox Corp A (FOXA), Fox Corp A (FOXA), MGM (MGM), FleetCor (FLT), Bunge (BG), Trimble (TRMB), Everest (RE), U-Haul Holding (UHAL), Rexford Inl Rty (REXR), Axa Equitable (EQH), Teva ADR (TEVA), Yara International ASA (YARIY), Penske Automotive (PAG), Performance Food Group Co (PFGC), Toray Industries ADR (TRYIY), Robinhood Markets (HOOD), Federal Realty (FRT), Plains All American Pipeline (PAA), Coty Inc (COTY), Severn Trent PLC PK (STRNY), Capri Holdings (CPRI), Royal Gold (RGLD), Mattel (MAT), First Industrial RT (FR), Ingredion (INGR), Reynolds (REYN), NewYork Times (NYT), Lincoln National (LNC), Sonoco Products (SON), Euronet (EEFT), Watts Water Technologies (WTS), Pilgrims Pride (PPC), XPO (XPO), Coherent (COHR), Affirm Holdings (AFRM), Informatica (INFA), ASGN (ASGN), Applovin (APP), Maximus (MMS), Paycor HCM (PYCR), Rithm Capital (RITM), Klabin Sa A (KLBAY), Blackstone Mortgage (BXMT), AllianceBernstein Holding LP (AB), Azenta (AZTA), Azek Company (AZEK), Axcelis (ACLS), Fluence Energy (FLNC), Advanced Energy (AEIS), Enersys (ENS), Belden (BDC), Radian (RDN), Vishay Intertechnology (VSH), Hillenbrand (HI), Moelis & Co (MC), Goodyear Tire & Rubber Co (GT), Impinj (PI), Internet Initiative Japan ADR (IIJIY), Plains GP Holdings (PAGP), Forward Air (FWRD), Frontier Group Holdings (ULCC), Rapid7 Inc (RPD), Site Centers (SITC), Equity Commonwealth (EQC), ESCO Technologies (ESE), Jfrog (FROG), Golub (GBDC), Sonos (SONO), FormFactor (FORM), Edgewell Personal Care (EPC), Green Plains Energy (GPRE), Apollo Commercial RE Finance (ARI), Digital Turbine (APPS), TTM (TTMI), Hudson Pacific (HPP), Perion Network (PERI), DHT Holdings Inc (DHT), Universal (UVV), Piedmont Office (PDM), Costamare (CMRE), CoreCivic (CXW), Cerence (CRNC), Trinseo SA (TSE).

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