What you need to know…
The S&P 500 Index ($SPX) (SPY) today is down -0.37%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.47%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.36%.
U.S. stock indexes this morning are moderately lower after U.S. Jan consumer prices rose more than expected, which will keep the pressure on the Fed to keep raising interest rates. U.S. Jan CPI eased to 6.4% y/y from 6.5% y/y in Dec, but was stronger than expectations of 6.2% y/y. Also, the Jan core CPI fell to 5.6% y/y from 5.7% y/y in Dec, but was stronger than expectations of 5.5% y/y.
Stocks maintained moderate losses today after the 10-year T-note yield rose to a 5-week high of 3.768% on hawkish comments from Richmond Fed President Barkin, who said, "inflation is normalizing, but it's coming down slowly," and if it persists at levels well above our target, we'll have to raise interest rates to a higher level than previously anticipated.
Several bearish quarterly earnings results today were negative for stocks. Cleveland-Cliffs is down more than -4% after reporting a wider-than-expected Q4 loss per share from continuing operations. Also, Amkor Technology is down more than -3% after reporting weaker-than-expected Q4 EPS. In addition, Norfolk Southern is down more than -2% after Cowen said the train derailment in Ohio would likely lead the company to call out a special charge in Q1.
There was some positive earnings and upgrade news that supported the market. Security software stocks are climbing today by more than +1% after Goldman Sachs initiated coverage of the security software sector with buy ratings on Crowdstrike Holdings, Fortinet, and Palo Alto Networks. Also, GlobalFoundaries is up more than +7%, and Cadence Design Systems and Arista Networks are up more than +4%, after reporting stronger-than-expected Q4 revenue. In addition, Boeing is up more than +1% after Air India said it plans to buy 220 Boeing planes valued at $34 billion.
Strength in European stocks is providing carry-over support to U.S. stocks, with the Euro Stoxx 50 up +0.09% at a 1-year high. Also, China’s Shanghai Composite stock index closed up +0.28%, and Japan’s Nikkei Stock index closed up +0.64%.
Today’s stock movers…
Cleveland-Cliffs (CLF) is down more than -4% after reporting a Q4 loss per share from continuing operations of -41 cents, wider than the consensus of -35 cents.
Weyerhaeuser (WY) is down more than -3% after reporting Q4 net sales of $1.82 billion, weaker than the consensus of $1.91 billion.
Amkor Technology (AMKR) is down more than -3% after reporting Q4 EPS of 67 cents, below the consensus of 70 cents, and forecasting Q1 EPS of 6 cents to 22 cents, well below the consensus of 53 cents.
Leidos Holdings (LDOS) is down more than -3% after forecasting 2023 adjusted EPS of $6.40-$6.80, weaker than the consensus of $6.81.
Newmont (NEM) is down more than -3% after UBS downgraded the stock to neutral from buy.
Norfolk Southern (NSC) is down more than -2% after Cowen said the train derailment in Ohio would likely lead the company to call out a special charge in Q1.
TransUnion (TRU) is down more than -2% after reporting Q4 revenue of $902.1 million, below the consensus of $904.9 million, and forecast Q1 revenue of $908 million-$917 million, weaker than the consensus of $932.4 million.
Zoetis (ZTS) is up more than +7% today to lead gainers in the S&P 500 after forecasting 2023 revenue of $8.58 billion-$8.73 billion, stronger than the consensus of $8.56 billion.
Arista Networks (ANET) is up more than +4% after reporting Q4 revenue of $1.28 billion, better than the consensus of $1.20 billion and forecasting Q1 revenue $of 1.28 billion to $1.33 billion, above the consensus of $1.21 billion.
Boeing (BA) is up more than +1% to lead gainers in the Dow Jones Industrials after Air India said it plans to buy 220 Boeing planes valued at $34 billion.
GlobalFoundaries (GFS) is up more than +7% after reporting Q4 net revenue of $2.10 billion, above the consensus of $2.07 billion, and forecasting Q1 net revenue o f$1.81 billion-$1,85 billion, the midpoint above the consensus of $1.82 billion.
Cadence Design Systems (CDNS) is up more than +5% after reporting Q4 revenue of $899.9 million, better than the consensus of $885.3 million, and forecast full-year revenue of $4.00 billion-$4.06 billion, stronger than the consensus of $3.88 billion.
Fidelity National (FIS) is up more than +4% after Morgan Stanley upgraded the stock to overweight from equal weight.
Security software stocks are moving higher today after Goldman Sachs initiated coverage of the security software sector with buy ratings for several stocks. Crowdstrike Holdings (CRWD) is up more than +3%. Also, Palo Alto Networks (PANW) is up more than +2%, and Fortinet (FTNT) is up more than +1%.
Marriott International (MAR) is up more than +1% after reporting Q4 adjusted EPS of $1.96, higher than the consensus of $1.83, and forecasting Q1 adjusted EPS of $1.82-$1.88, stronger than the consensus of $1.65.
Across the markets…
March 10-year T-notes (ZNH23) today are down -12 ticks, and the 10-year T-note yield is up +2.1 bp at 3.723%. Mar 10-year T-notes this morning dropped to a 1-1/2 month low, and the 10-year T-note yield rose to a 5-week high of 3.768%. T-notes whipsawed lower after this morning’s U.S. Jan CPI report showed stronger-than-expected price pressures. Also, today’s jump in the 10-year German bund yield to a 6-week high of 2.435% weighed on T-notes. Losses in T-notes accelerated this morning after Richmond Fed President Barkin said if inflation remains above target, the Fed will have to raise interest rates to a higher level than previously anticipated.
The dollar index (DXY00) today is down by -0.21% and posted a 1-week low. The dollar is moderately lower today as strong UK labor market news pushed GPD/USD up to a 1-week high, and hawkish ECB comments pushed EUR/USD up to a 1-week high. The dollar recovered most of its losses as T-note yields climbed after this morning’s U.S. Jan CPI report came in higher than expected.
EUR/USD (^EURUSD) today is up by +0.34% and climbed t a 1-week high. The euro moved higher today after European government bond yields jumped on hawkish comments from ECB Governing Council member Maklhouf who said he's "open to acting forcefully to get inflation down to our target."
Today’s Eurozone economic news was mixed for EUR/USD. On the positive side, Eurozone Q4 GDP rose +0.1% q/q and +1.9% y/y, right on expectations. Conversely, the German Jan wholesale price index eased to +10.6% y/y from +12.8% y/y in Dec, the slowest pace of increase in 20 months.
USD/JPY (^USDJPY) today is up by +0.15%. The yen today tumbled to a 5-week low against the dollar. The yen is under pressure on speculation that the appointment of former BOJ member Ueda to be BOJ Governor will not affect BOJ policy when Ueda said, “the BOJ’s current policy is appropriate and monetary easing needs to be continued at this point.” The yen extended its losses after today’s economic news showed Japan Q4 GDP expanded less than expected.
Today’s economic news was mixed for the yen. On the negative side, Japan's Q4 GDP rose +0.6% (q/q annualized), weaker than expectations of +2.0%. Conversely, Japan Dec industrial production was revised upward to +0.3% m/m from the initially reported -0.1% m/m.
April gold (GCJ3) this morning is up +3.6 (+0.19%), and March silver (SIH23) is up +0.023 (+0.11%). Precious metals prices this morning rebounded from early losses and are slightly higher. Today's decline in the dollar index to a 1-week low is bullish for precious metals. A stronger-than-expected U.S. Jan CPI report today also boosted demand for gold as a hedge against inflation. Metals today initially moved lower, with gold falling to a 5-week low and silver dropping to a 2-1/2 month low after global bond yields moved higher on hawkish central bank comments. Gold prices also remain under pressure due to the continued liquidation of gold holdings in ETFs after holdings of gold in ETFs fell to a 2-3/4 year low Monday.
More Stock Market News from Barchart
- Markets Today: Stocks Slide After Stronger Than Expected CPI Report
- S&P Futures Tick Higher Ahead of Key U.S. Inflation Data
- Stocks Finish Higher on Hopes for Moderating U.S. Consumer Prices
- Dollar Fades on Lower T-note Yields and Stronger Stocks
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.
/Apple%20Inc%20logo%20on%20Apple%20store-by%20PhillDanze%20via%20iStock.jpg)
/Elon%20Musk%2C%20founder%2C%20CEO%2C%20and%20chief%20engineer%20of%20SpaceX%2C%20CEO%20of%20Tesla%20by%20Frederic%20Legrand%20-%20COMEO%20via%20Shutterstock.jpg)
