March S&P 500 futures (ESH23) are trending moderately down -0.04% this morning after three major U.S. benchmark indices closed higher in a choppy session on Wednesday as investors continued to speculate about the future of the Federal Reserve’s interest rate policy following a stronger-than-expected retail sales report while awaiting crucial U.S. PPI data. Three major U.S. stock indexes were fueled primarily by gains in the Consumer Services, Industrials, and Consumer Goods sectors.
A Commerce Department report showed retail sales in the U.S. climbed 3.0% m/m in January, rebounding from a decline of 1.1% m/m in December, driven by purchases of motor vehicles and other items. Economists had anticipated an increase of +1.8% m/m. The blowout retail sales report offered evidence of resilience in the U.S. economy, bolstering expectations that the Federal Reserve will push the benchmark rate above 5% by mid-summer.
“The good news from retail, and broadly from the stronger economy, has been mostly priced in. At the same time, that strength has taken market expectations of rate cuts off the table and moved the terminal Fed funds rate a little bit higher,” said Ross Mayfield, an investment strategist at Baird.
On the earnings front, Analog Devices Inc (ADI) closed up over +7% after the analog semiconductor company reported better-than-expected Q1 results and posted strong Q2 revenue guidance. Also, Cisco Systems Inc (CSCO) soared over +4% in pre-market trading after the networking giant reported upbeat Q2 results and issued a solid Q3 forecast. At the same time, Shopify Inc (SHOP) slid over -9% in pre-market trading after the Canadian technology company’s revenue forecast for the current quarter failed to impress investors.
Meanwhile, companies scheduled to release earnings reports today include Hasbro Inc (HAS), Applied Materials Inc (AMAT), DoorDash Inc (DASH), and Dropbox Inc (DBX).
Today, all eyes are focused on the U.S. Producer Price Index (PPI) in a couple of hours. Economists, on average, forecast that January U.S. PPI will stand at +0.4% m/m and +5.4% y/y, compared to the previous values of -0.4% m/m and +6.2% y/y.
Also, investors are likely to focus on the U.S. Building Permits preliminary data. Economists foresee January’s figure to be 1.350M.
U.S. Housing Starts data will be reported today. Economists foresee this figure to stand at 1.360M in January, compared to the previous number of 1.382M.
U.S. Core PPI data will come in today. Economists expect January’s figures to be +0.3% m/m and +4.9% y/y, compared to the previous values of +0.1% m/m and +5.5% y/y.
U.S. Philadelphia Fed Manufacturing Index will also be closely watched today. Economists expect Philadelphia Fed Manufacturing Index to come in at -7.4 in February, compared to the previous figure of -8.9.
U.S. Initial Jobless Claims data will be reported today as well. Economists estimate this figure to be 200K, compared to last week’s value of 196K.
In addition, investors are likely to focus on speeches from Fed officials Mester and Bullard for further clues on the Fed’s rate hike path.
In the bond markets, United States 10-Year rates are at 3.784%, down -0.61%.
The Euro Stoxx 50 futures are up +0.61% this morning as investors assessed the global economic outlook and digested a series of positive earnings reports. European stocks have received a positive handover from Wall Street after better-than-expected retail sales data boosted investor sentiment. At the same time, European Central Bank President Christine Lagarde said Wednesday the central bank intends to raise borrowing costs by another 50 basis points next month. In corporate news, shares of Centrica Plc (CNA.LN) gained over +5% after the company’s annual profit more than tripled, and the company extended its share buyback program. Also, Pernod Ricard (RI.FP) climbed more than +4% after the world’s second-biggest spirits group reported better-than-expected first-half profit and sales.
The European economic data slate is mainly empty on Thursday.
Most Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed down -0.96%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.71%.
China’s Shanghai Composite Index lagged its Asian peers and closed lower today as geopolitical tensions and doubts over the country’s fast economic recovery continued to weigh on sentiment. On the positive side, the People’s Bank of China said it would launch more measures to stimulate economic growth this year, including increased lending and support for the property market.
At the same time, Japan’s Nikkei 225 Stock Index closed higher after data showed the country notched the highest trade deficit ever as imports jumped amid higher raw material and energy costs and a weak yen. Also, Japanese core machinery orders returned to growth in December after contracting in the prior month. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down 5.43% and hit a new 3-year low of 15.14.
The Japanese January Trade Balance stood at -3,496.6B, stronger than expectations of -3,871.5B.
The Japanese December Core Machinery Orders came in at +1.6% m/m and -6.6% y/y, weaker than expectations of +3.0% m/m and -6.0% y/y.
Pre-Market U.S. Stock Movers
Emergent Biosolutions Inc (EBS) jumped over +15% in pre-market trading after the company announced the FDA advisory committees had unanimously voted in favor of OTC Narcan.
Roku Inc (ROKU) climbed about +10% in pre-market trading after the company reported upbeat Q4 results and posted a better-than-expected forecast for the current quarter.
Twilio Inc (TWLO) rose more than +13% in pre-market trading after the cloud communications software company reported better-than-expected Q4 results and issued strong Q1 guidance.
Ringcentral Inc (RNG) plunged about -10% in pre-market trading after the company reported mixed Q4 results and delivered light Q1 guidance.
Fastly Inc (FSLY) gained more than +3% in pre-market trading after DA Davidson upgraded the stock to buy from neutral with a price target of $17, up from $8.50.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - February 16th
Applied Materials (AMAT), Air Liquide ADR (AIQUY), Vale ADR (VALE), Southern (SO), Relx ADR (RELX), Pernod Ricard (PRNDY), Cenovus Energy Inc (CVE), Digital (DLR), Consolidated Edison (ED), Datadog (DDOG), Vulcan Materials (VMC), DoorDash (DASH), Coca-Cola European (CCEP), Standard Chartered (SCBFF), Repsol SA (REPYY), Agnico Eagle Mines (AEM), Laboratory America (LH), Entergy (ETR), EPAM Systems (EPAM), West Pharmaceutical Services (WST), HubSpot Inc (HUBS), Zebra (ZBRA), Fairfax Financial (FRFHF), Pool (POOL), Bio-Rad Labs (BIO), Reliance Steel&Aluminum (RS), Hyatt (H), Henry Schein (HSIC), Watsco (WSO), Toast (TOST), Cognex (CGNX), Procore Technologies (PCOR), Dropbox (DBX), Fortune Brands (FBIN), US Foods (USFD), Americold Realty (COLD), NRG (NRG), Hasbro (HAS), DraftKings (DKNG), Organon Co (OGN), AptarGroup (ATR), Iridium (IRDM), KBR (KBR), Texas Roadhouse (TXRH), Kinsale Capital (KNSL), Globant SA (GLOB), Shockwave Medical (SWAV), Ascendis Pharma AS (ASND), Dun And Bradstreet (DNB), Engie Brasil (EGIEY), R1 RCM (RCM), PBF Energy (PBF), DT Midstream (DTM), IDACORP (IDA), Air Lease (AL), Visteon (VC), Tower (TSEM), Bright Horizons (BFAM), Portland General Electric (POR), Casella (CWST), Arcadis NV (ARCAY), AMN Healthcare Services (AMN), American Equity Inv. Life (AEL), Focus Financial Partners (FOCS), Vontier (VNT), INC Research (SYNH), Aeroportuario del Centro Norte (OMAB), Grand Canyon Education (LOPE), Allete (ALE), Hannon Armstrong Sustainable (HASI), Appian (APPN), DigitalOcean Holdings (DOCN), Scorpio Tankers (STNG), LXP Industrial Trust (LXP), Ultragenyx (RARE), Sage Therapeutic (SAGE), Arch Resources (ARCH), Blueprint Medicines Corp (BPMC), Pacific Biosciences (PACB), Shake Shack Inc (SHAK), Stepan (SCL), CBIZ (CBZ), Integer Hld (ITGR), Cedar Fair LP (FUN), Star Bulk Carriers (SBLK), Claros Mortgage Trust (CMTG), Bloomin Brands (BLMN), Hercules Capital (HTGC), Golden Ocean (GOGL), United States Cellular (USM), Materion (MTRN), Granite Construction (GVA), Newmark Group (NMRK), Cohu (COHU), Ironwood (IRWD), Elme (ELME), Stem (STEM), Now Inc (DNOW), Sixth Street Specialty Lending (TSLX), LTC Properties (LTC), indie Semiconductor (INDI), Nevro Corp (NVRO), Orion Engineered Carbons (OEC), Telephone&Data Systems (TDS), PDF Solutions (PDFS), Momentive Global (MNTV), IAMGold (IAG), Employers (EIG), WeWork (WE), Redfin (RDFN).
More Stock Market News from Barchart
- Stocks Recover Early Losses and Close Higher on Hopes for Soft Landing
- Unusually Large Covered Call in Tenet Healthcare Makes Pseudo Dividend
- Intel's Dividend May be in Jeopardy
- Apple (AAPL) Shares- A Bearish Trend or An Opportunity?
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.
/A%20photo%20of%20a%20Sandisk%20Solid%20State%20Drive%20by%20Top%20Popular%20Vector%20by%20Shutterstock.jpg)
