S&P Futures Tick Higher As China Recovery Overshadow Rate Hike Worries

March S&P 500 futures (ESH23) are trending up +0.22% this morning after major U.S. benchmark indices finished the regular session in the red, with the three U.S. indices ending a volatile February on a down note as investors feared that higher Federal Reserve interest rates would remain in place for longer to fight inflationary pressures.

In Tuesday’s trading session, Goldman Sachs Group Inc (GS) dropped -3.8% after Chief Executive David Solomon said the bank was considering “strategic alternatives” for its consumer business, dragging the blue-chip Dow index lower. Also, Norwegian Cruise Line (NCLH) plunged over -10% and was the top percentage loser on the S&P 500 index after posting a wider-than-expected Q4 adjusted loss per share. At the same time, Meta Platforms Inc (META) climbed over +3% after the company said it created a new product team to work on AI products, helping the tech-heavy Nasdaq Composite close just below the unchanged mark.

Data on Tuesday showed that the U.S. CB consumer confidence index unexpectedly fell to 102.9 in February, weaker than expectations of 108.5. Also, the Chicago PMI dropped to 43.6 in February, marking the sixth consecutive month in contraction territory. At the same time, S&P/CS HPI Composite - 20 n.s.a increased at its slowest pace since the summer of 2020 to +4.6% y/y in December, weaker than expectations of +5.8% y/y. 

“The data today continue to show that the Fed’s job is very tough. Consumers are only just barely starting to reign in their spending plans, but they still see good strength in the labor market,” Jefferies said in a note.

Chicago Fed President Austan Goolsbee Tuesday emphasized the need for the Fed to be data-dependent and not rely too much on market reaction to guide policy. “It is a danger and a mistake for policymakers to rely too heavily on market reactions that tell us which way the markets want the Fed to move,” Goolsbee said.

On the earnings front, major companies like Salesforce Inc (CRM), Lowe’s Companies Inc (LOW), Snowflake Inc (SNOW), NIO (NIO), and Dollar Tree Inc (DLTR) are set to release their quarterly reports today.

Today, all eyes are focused on the U.S. ISM Manufacturing PMI data in a couple of hours. Economists, on average, forecast that February ISM Manufacturing PMI will stand at 48.0, compared to the previous value of 47.4.

U.S. Manufacturing PMI data will also come in today. Economists foresee this figure to stand at 47.8 in February, compared to January’s number of 46.9.

U.S. Crude Oil Inventories data will be reported today as well. Economists estimate this figure to be +0.457M, compared to last week’s value of +7.648M.

In the bond markets, United States 10-Year rates are at 3.947%, up +0.85%.

The Euro Stoxx 50 futures are up +0.68% this morning as investors digested a string of regional economic data as well as strong factory data from China. European stocks have received a positive handover from Asia after main indexes gained ground on signs of recovery in China’s business activity. In corporate news, shares of Persimmon Plc (PSN.LN) tumbled over -9% after the company warned of lower profit and margins for 2023 and cut its annual dividend by 75%.

Spain’s Manufacturing PMI, Italy’s Manufacturing PMI, France’s Manufacturing PMI, Germany’s Manufacturing PMI, Germany’s Unemployment Change, Germany’s Unemployment Rate, Eurozone’s Manufacturing PMI, and U.K.’s Manufacturing PMI data were released today.

The Spanish February Manufacturing PMI came in at 50.7, stronger than expectations of 49.1.

The Italian February Manufacturing PMI was at 52.0, stronger than expectations of 51.0.

The French February Manufacturing PMI has been reported at 47.4, weaker than expectations of 47.9.

The German February Manufacturing PMI stood at 46.3, weaker than expectations of 46.5.

The German February Unemployment Change came in at +2K, stronger than expectations of +9K.

The German February Unemployment Rate remained steady at 5.5%.

Eurozone February Manufacturing PMI stood at 48.5, in line with expectations.

U.K. February Manufacturing PMI has been reported at 49.3, stronger than expectations of 49.2.

Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +1.00%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.26%.

China’s Shanghai Composite today jumped close to an eight-month high after data showed the country’s composite PMI, a key indicator of business activity, expanded at the fastest pace in over a decade in February, rising to pre-COVID levels. Also, the Chinese February Manufacturing PMI has been reported at 52.6 compared to 50.1 in January and was stronger than expectations of 50.5, boosting optimism in the recovery of the world’s second-largest economy.

The Chinese February Non-Manufacturing PMI stood at 56.3, stronger than expectations of 55.0.

The Chinese February Caixin Manufacturing PMI came in at 51.6, stronger than expectations of 50.2.

“The China February official PMIs and Caixin manufacturing PMI all surprised strongly to the upside, and notably higher than the previous January figures,” said Alvin Tan, a head of Asia FX strategy at RBC Capital Markets.

At the same time, Japan’s Nikkei 225 Stock Index today lagged its Asian peers and closed slightly higher after data showed the country’s manufacturing PMI remained in contraction in February. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down 2.03% to 16.40.

The Japanese February Manufacturing PMI has been reported at 47.7, stronger than expectations of 47.4. 

Pre-Market U.S. Stock Movers

Reata Pharmaceuticals Inc (RETA) spiked over +165% in pre-market trading after the company announced that the FDA approved SKYCLARYS for the treatment of Friedreich’s ataxia.

Novavax Inc (NVAX) plunged about -24% in pre-market trading after the company’s Q4 results fell short of expectations. 

Rivian Automotive Inc (RIVN) slid over -7% in pre-market trading after the company reported mixed Q4 results and posted disappointing full-year production guidance.

Monster Beverage Corp (MNST) dropped more than -4% in pre-market trading after the company released downbeat Q4 results.

HP Inc (HPQ) rose about +3% in pre-market trading after the company reported weaker-than-expected Q1 results but maintained its full-year earnings and free cash flow outlook. 

Builders FirstSource Inc (BLDR) fell over -1% in pre-market trading after BMO downgraded the stock to market perform from outperform.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - March 1st

Salesforce Inc (CRM), RBC (RY), Lowe’s (LOW), Snowflake (SNOW), Dollar Tree (DLTR), Veeva Systems A (VEEV), Horizon Therapeutics (HZNP), National Bank of Canada (NTIOF), Nio A ADR (NIO), Splunk (SPLK), Okta (OKTA), Jazz Pharma (JAZZ), agilon health (AGL), Plug Power (PLUG), Donaldson (DCI), Healthcare RT (HR), Clean Harbors (CLH), Celsius (CELH), CLARIVATE (CLVT), Descartes Systems (DSGX), Starwood Property (STWD), Light Wonder (LNW), Novanta (NOVT), Melco Resorts & Entertainment (MLCO), CCC Intelligent Solutions Holdings (CCCS), Hilton Grand Vacations (HGV), Weibo Corp (WB), Box Inc (BOX), Intracellular Th (ITCI), DoubleVerify Holdings (DV), Enstar (ESGR), Cytokinetics Inc (CYTK), Surgery Partners Inc (SGRY), Amicus (FOLD), Zai Lab (ZLAB), Acushnet Holdings (GOLF), Greif Bros (GEF), American States Water (AWR), Atlantica Sustainable Infrastructure (AY), Federal Signal (FSS), California Water Service (CWT), Kohl’s Corp (KSS), Axonics Modulation Technologies (AXNX), National Vision (EYE), ACI Worldwide (ACIW), Certara (CERT), IVERIC bio (ISEE), American Eagle Outfitters (AEO), Clear Secure (YOU), Immunocore Holdings (IMCR), Verra Mobility (VRRM), Dycom Industries (DY), Xenon Pharmaceuticals (XENE), Frontdoor (FTDR), Tricon Capital Group Inc (TCN), ODP (ODP), Harmony Gold Mining (HMY), Veradigm (MDRX), Everi Holdings (EVRI), Xenia Hotels & Resorts Inc (XHR), Jack In The Box (JACK), Compass Diversified (CODI), Xometry (XMTR), Abercrombie&Fitch (ANF), Tuya (TUYA), Studio City (MSC), Meridianlink (MLNK), Avid (AVID), Dine Brands Global (DIN), Golden Entertainment (GDEN), Astec (ASTE).

More Stock Market News from Barchart

• Live Cattle: Can You Envision Cattle on the Moon?
• Stocks Fall Back on Concern Global Central Banks Will Keep Raising Rates
• Investors Are Still Keen on Microsoft Stock, Making Short Put Plays Popular
• Airbnb’s High Valuation has Analysts Concerned