Morning Markets
March S&P 500 futures (ESH23) this morning are up +0.35%, and March Nasdaq 100 E-Mini futures (NQH23) are up +0.34%.
U.S. stock index futures this morning are moderately lower as the recent increase in global bond yields paused.  The 10-year T-note yield is down -5.5 bp to 4.001%, and the 10-year German bund yield is down -3.2 bp to 2.719%. Also, signs of strength in China’s economy sparked a rally in the Shanghai Composite to a 7-1/2 month high today and is providing carryover support to world equity markets.
Positive corporate news today also gave the overall market a boost. Hewlett Packard Enterprise climbed more than +2% in pre-market trading after reporting better-than-expected Q1 net revenue. Also, Tesla is up more than +1% after preliminary data showed total China Feb vehicle shipments rose +13% m/m. In addition, Apple is up +1% after Morgan Stanley raised its price target on the stock and said the company has five under-appreciated catalysts that can drive a re-rating over the next 12 months.
On the negative side, Dell Technologies is down more than -3% in pre-market trading after forecasting that Q1 revenue will fall about -19%. Also, Marvell Technology is down more than -7% after forecasting Q1 adjusted EPS below the consensus. In addition, Costco Wholesale Corp is down more than -2% after reporting Q2 total U.S. comparable store sales that were below estimates.
Overseas stock markets are higher. The Euro Stoxx 50 today is up +0.79%. China’s Shanghai Composite stock index closed up +0.54%, and Japan’s Nikkei Stock Index closed up +1.56%.Â
The Euro Stoxx 50 index today rose to a 1-1/2 week high and is moderately higher. Gains in mining stocks and automakers are leading the overall market higher on signs that China’s economy is strengthening. Also, positive comments today from ECB Vice President Guindos boosted stocks when he said the Eurozone economy is performing better than expected and fears of a recession are receding.  In addition, today’s economic news showed an easing of Eurozone Jan producer price pressures that knocked government bond yields lower and supported stocks.Â
The Eurozone Feb S&P composite PMI was revised downward by -0.3 to 52.0 from the initially reported 52.3.
Eurozone Jan PPI eased to +15.0% y/y from +24.8% y/y in Dec, weaker than expectations of +17.8% y/y and the slowest pace of increase in 17 months.
German Jan exports rose +2.1% m/m, stronger than expectations of +1.5% m/m and the biggest increase in 5 months.
ECB Governing Council member Muller said, "it's quite possible that interest rates will need to stay high for quite some time so that we can be sure that inflation will come back to, and remain at, close to 2%."
ECB Governing Council member Vasle said that he expects an interest-rate hike at this month's ECB meeting to be followed by "additional increases."
China’s Shanghai Composite today rallied to a 7-1/2 month high and closed moderately higher. Signs that the Chinese economy is strengthening supported gains in stocks after today’s economic news showed a gauge of China’s service sector expanded at the fastest pace in six months. Strength in Chinese semiconductor firms led gains in technology stocks after Chinese Vice Premier Liu vowed to ramp up support for the domestic chip industry. Short covering in Chinese stocks also supported the overall market ahead of the week-long National People’s Congress that begins this weekend.  However, gains in the overall market were limited after the U.S. Commerce Department added dozens of Chinese companies to its Entity List, cutting activities contrary to U.S. national security and foreign policy interest.
The China Feb Caixin services PMI rose +2.1 to 55.0, stronger than expectations of 54.5 and the fastest pace of expansion in 6 months.
Japan’s Nikkei Stock Index today climbed to a 2-1/2 month high and settled sharply higher. Japanese stock garnered support from a rally in U.S. equities Thursday after Atlanta Fed President Bostic said the Fed could be in a position to pause rate hikes sometime this summer.  Today’s economic news that showed strength in the Japanese economy also boosted stocks today. Japan’s unemployment rate unexpectedly fell to a 2-3/4 year low, and a gauge of activity in Japan’s service sector expanded at its fastest pace in 8 months. On the negative side, the Japan Feb Tokyo CPI ex-fresh food and energy rose more than expected by the most in 32 years.
The Japan Feb Jibun Bank services PMI was revised upward by +0.4 to 54.0 from the initially reported 53.6, the fastest pace of expansion in 8 months.
The Japan Jan jobless rate unexpectedly fell -0.1 to a 2-3/4 year low of 2.4%, showing a stronger labor market than expectations of no change at 2.5%.
The Japan Feb Tokyo CPI ex-fresh food and energy rose +3.2% y/y, stronger than expectations of +3.1% y/y and the most in 32 years.
Pre-Market U.S. Stock Movers
Apple (AAPL) rose more than +1% in pre-market trading after Morgan Stanley raised its price target on the stock to $180 from $175 and said the company has five under-appreciated catalysts that can drive a re-rating over the next 12 months.Â
Hewlett Packard Enterprise (HPE) climbed more than +2% in pre-market trading after reporting Q1 net revenue of $7.81 billion, stronger than the consensus of $7.41 billion.Â
Tesla (TSLA) gained over +1% in pre-market trading after preliminary data showed total China Feb vehicle shipments rose +13% m/m to 74,402.Â
C3.ai (AI) surged more than +12% in pre-market trading after raising guidance on its full-year revenue forecast to $264 million-$266 million from a prior forecast of $255 million-$270 million, stronger than the consensus of $261.4 million.
Kroger (KR) rose more than +1% in pre-market trading after JPMorgan Chase upgraded the stock to overweight from neutral.Â
Pioneer Natural Resources (PXD) climbed more than +2% in pre-market trading after Wells Fargo Securities upgraded the stock to equal weight from underweight.
Dell Technologies (DELL) erased early gains and tumbled more than -3% in pre-market trading after forecasting that Q1 revenue will fall about -19%. Â
Costco Wholesale Corp (COST) dropped more than -2% in pre-market trading after reporting Q2 total U.S. comparable store sales rose +5.7%, weaker than the consensus of +6.3%.Â
Marvell Technology (MRVL) slumped more than -7% in pre-market trading after forecasting Q1 adjusted EPS of 29 cents, weaker than the consensus of 42 cents.Â
ChargePoint (CHPT) sank more than -11% in pre-market trading after reporting Q4 revenue of $152.8 million, weaker than the consensus of $165.4 million and forecasting Q1 revenue of $122 million-$132 million, well below the consensus of $154.6 million.Â
Victoria’s Secret (VSCO) tumbled more than -3% in pre-market trading after forecasting Q1 adjusted EPS of 30 cents-60 cents a share, weaker than the consensus of 84 cents. Â
Elastic NV (ESTC) fell more than -3% in pre-market trading after forecasting Q4 revenue of $276 million-$278 million, below the consensus of $282.9 million.Â
Today’s U.S. Earnings Reports (3/3/2023)
Bluebird Bio Inc (BLUE), Cvent Holding Corp (CVT), Entravision Communications Cor (EVC), Fathom Digital Manufacturing Co (FATH), Fulcrum Therapeutics Inc (FULC), Gossamer Bio Inc (GOSS), Hibbett Inc (HIBB), Lifecore Biomedical Inc (LFCR), Marathon Digital Holdings Inc (MARA), National Western Life Group In (NWLI), Silvercrest Asset Management G (SAMG), Smith & Wesson Brands Inc (SWBI), Tejon Ranch Co (TRC), Tyra Biosciences Inc (TYRA), Urban One Inc (UONEK).
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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.
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