Markets Today: Nvidia’s Bullish Revenue Outlook Lifts Stock Index Futures

Morning Markets

March S&P 500 futures (ESH23) this morning are up +0.36%, and March Nasdaq 100 E-Mini futures (NQH23) are up +0.79%.

U.S. stock index futures this morning are moderately higher on strength in technology stocks, with Nvidia up more than +8% in pre-market trading after it gave a bullish revenue outlook.  However, stock index futures fell back from their best levels when bond yields rose after this morning’s U.S. economic news showed weekly jobless claims unexpectedly fell, and the Q4 core PCE deflator was revised higher. 

U.S. weekly initial unemployment claims unexpectedly fell -3,000 to 192,000, showing a stronger labor market than expectations of an increase to 200,000.  Also, weekly continuing unemployment claims fell -37,000 to 1.654 million, showing a stronger labor market than expectations of an increase to 1.700 million.

U.S. Q4 GDP was revised lower to 2.7% (q/q annualized) from the previously reported 2.9% as Q4 personal consumption was revised lower to 1.4% from 2.0%.  Also, the Q4 core PCE deflator was revised upward to show a 4.3% q/q increase from the previously reported 3.9% q/q increase.

Stock indexes came under pressure this morning after the 10-year T-note yield climbed t a 3-1/2 month high of 3.974%.

Some positive corporate news today is supportive of stocks.  Etsy rallied more than +5% in pre-market trading after reporting stronger-than-expected Q4 revenue.  Also, APA Corp rose more than +3% after reporting Q4 adjusted EPS above the consensus. In addition, Moderna is up more than +2% after its personalized mRNA cancer vaccine it’s developing with Merk’s Keytruda immunotherapy received Breakthrough Therapy Designation status from the U.S. FDA.

On the negative side, Ebay is down more than -4% in pre-market trading after reporting the seventh straight quarter of decline in active buyers and said it expects a “challenging” margin outlook this year.  Also, Unity Software is down more than -8% after forecasting full-year revenue below the consensus.  In addition, Dollar General fell more than -4% after cutting its preliminary Q4 EPS estimate.

Hawkish comments Wednesday night from New York Fed President Williams were bearish for stocks when he said strong demand in the U.S. economy continues to exceed supply, pointing to persistent price pressures in the services sector.  He also said that the continued demand for goods and ongoing supply-chain issues in the global economy might keep prices from falling as quickly as some have expected. 

Overseas stock markets are mixed.  The Euro Stoxx 50 today is up +0.52%.  China’s Shanghai Composite stock index closed down -0.11%, while Japanese markets were closed today for the Emperor’s Birthday. 

The Euro Stoxx 50 index today is moderately higher. Strength in chip stocks is leading technology stocks higher after Nvidia raised its Q1 revenue forecast, a positive factor for the sector.  Also, some positive corporate earnings results were bullish for the market when Rolls Royce Holdings Plc soared more than +20% after reporting full-year earnings and forecasts that topped estimates.  However, gains in the overall market are limited by the prospects of higher interest rates after the Eurozone Jan core CPI was revised higher. 

Eurozone Jan core CPI was revised upward by +0.1 to a record +5.3% y/y from the initially reported +5.2% y/y.

China’s Shanghai Composite today closed slightly lower.  Weakness in technology stocks, led by losses in artificial intelligence-related stocks, weighed on the overall market amid media reports of authorities banning access to OpenAI’s ChatGPT service.  Losses in the overall market were muted as semiconductor stocks rose after Nvidia gave a bullish revenue outlook for the current quarter, suggesting that a push into artificial intelligence processors is helping offset weaker demand for personal computer chips.  Also, makers of baby products rallied after Zhejiang Daily reported the government of Hangzhou plans to give families with a second or third baby a one-off cash subsidy to boost birth rates.

Pre-Market U.S. Stock Movers

Nvidia (NVDA) jumped more than +8% in pre-market trading after reporting Q4 adjusted gross margin of 66.1%, better than the consensus of 65.8%, and forecasting Q1 adjusted gross margin of 66% to 67%, stronger than the consensus of 65.8%. 

Moderna (MRNA) climbed more than +2% in pre-market trading after its personalized mRNA cancer vaccine it’s developing with Merk’s Keytruda immunotherapy received Breakthrough Therapy Designation from the U.S. FDA.

Etsy (ETSY) rallied more than +5% in pre-market trading after reporting Q4 revenue of $807.2 million, stronger than the consensus of $753.7 million.

APA Corp (APA) gained more than +3% in pre-market trading after reporting Q4 adjusted EPS of $1.48, stronger than the consensus of $1.34.

Rackspace Technology (RXT) jumped more than +7% in pre-market trading after reporting Q4 revenue of $787 million, above the consensus of $775.8 million. 

Palantir (PLTR) climbed more than +2% in pre-market trading after President Capital Management upgraded the stock to buy from neutral. 

Stellantis NV (STLA) rose more than +3% in pre-market trading after Banka Akros upgraded the stock to accumulate from neutral. 

Unity Software (U) tumbled more than -8% in pre-market trading after forecasting full-year revenue of $2.05 billion-$2.20 billion, below the consensus of $2.21 billion. 

EBay (EBAY) dropped more than -4% in pre-market trading after reporting it had 134 million active buyers in Q4, down -9% y/y and the seventh straight quarter of decline, and said it expects a “challenging” margin outlook this year.

Teladoc (TDOC) fell more than -7% in pre-market trading after forecasting full-year revenue of $2.55 billion-$2.68 billion, weaker than the consensus of $2.72 billion. 

Centene (CNC) slid nearly -1% in pre-market trading after JPMorgan Chase downgraded the stock to neutral from overweight. 

Lucid Group (LCID) tumbled more than -12% in pre-market trading after reporting a Q4 adjusted Ebitda loss of -$626.6 million, wider than the consensus of -$579.9 million. 

Domino’s Pizza (DPZ) dropped more than -8% in pre-market trading after reporting Q4 revenue of $1.39 billion, weaker than the consensus of $1.43 billion.

Dollar General (DG) fell more than -4% in pre-market trading after cutting its preliminary Q4 EPS estimate to $2.91-$2.96 from a prior view of $3.15-$3.30, weaker than the consensus of $3.26. 

Today’s U.S. Earnings Reports (2/23/2023)

Alliant Energy Corp (LNT), American Electric Power Co Inc (AEP), American Tower Corp (AMT), Autodesk Inc (ADSK), Bath & Body Works Inc (BBWI), Booking Holdings Inc (BKNG), CBRE Group Inc (CBRE), Celanese Corp (CE), DISH Network Corp (DISH), Domino's Pizza Inc (DPZ), DTE Energy Co (DTE), Edison International (EIX), EOG Resources Inc (EOG), Extra Space Storage Inc (EXR), Genuine Parts Co (GPC), Intuit Inc (INTU), Iron Mountain Inc (IRM), Keurig Dr Pepper Inc (KDP), Live Nation Entertainment Inc (LYV), LKQ Corp (LKQ), Moderna Inc (MRNA), Newmont Corp (NEM), PG&E Corp (PCG), Quanta Services Inc (PWR), Teleflex Inc (TFX), VICI Properties Inc (VICI), Warner Bros Discovery Inc (WBD).

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