S&P Futures Plunge Ahead of Key U.S. PPI and Retail Sales Data

March S&P 500 futures (ESH23) are trending down -1.02% this morning after three major U.S. benchmark indices finished the regular session higher as bank shares rebounded and key U.S. inflation data met expectations, bolstering bets of a smaller interest rate hike by the Federal Reserve, while investors also awaited crucial U.S. PPI and Retail Sales data.

In Tuesday’s trading session, Wall Street’s main indexes ended in the green, led by gains in communication services, technology, and financial stocks. The financial sector clawed back some of its losses in the wake of the collapse of Silicon Valley Bank and Signature Bank. Also, Uber Technologies Inc (UBER) rose +5%, and DoorDash Inc (DASH) climbed more than +5% after a California appeals court ruled that the companies can continue to treat their workers as independent contractors. In addition, Meta Platforms Inc (META) closed up over +7% after announcing 10,000 job cuts in its second round of layoffs.

The Labor Department’s report on Tuesday showed consumer prices rose +0.4% m/m in February, cooling slightly from January’s figure of +0.5% m/m. On an annual basis, headline inflation slowed to +6.0% in February from +6.4% in January, in line with expectations. At the same time, core CPI, which excludes food and fuel, rose +0.5% m/m and +5.5% y/y in February, compared to expectations of +0.4% m/m and +5.5% y/y.

“The CPI report, although in line and not perfect, did not scream that they have no choice but to raise. The Fed still has options, which is a good thing,” said Jamie Cox, a managing partner for Harris Financial Group.

After the release of the CPI data, U.S. rate futures have priced in an 81.9% chance of a 25 basis point rate increase and an 18.1% chance of no hike at the Federal Reserve’s upcoming monetary policy committee meeting.

Today, all eyes are focused on the U.S. Producer Price Index (PPI) in a couple of hours. Economists, on average, forecast that February U.S. PPI will stand at +0.3% m/m and +5.4% y/y, compared to the previous values of +0.7% m/m and +6.0% y/y.

Also, investors are likely to focus on the U.S. Core Retail Sales data, which was at +2.3% m/m in January. Economists foresee the new figure to be -0.1% m/m.

U.S. Core PPI data will come in today. Economists expect February’s figures to be +0.4% m/m and +5.2% y/y, compared to the previous numbers of +0.5% m/m and +5.4% y/y.

U.S. NY Empire State Manufacturing Index will be reported today. Economists foresee this figure to stand at -8.00 in March, compared to the previous number of -5.80.

U.S. Retail Sales data will also be closely watched today. Economists forecast February’s figure to be -0.3% m/m, compared to the previous value of +3.0% m/m.

U.S. Crude Oil Inventories data will be reported today as well. Economists estimate this figure to be +1.188M, compared to last week’s value of -1.694M.

In the bond markets, United States 10-Year rates are at 3.668%, up +0.89%.

The Euro Stoxx 50 futures are down -2.83% this morning, weighed down by retail, energy, and bank stocks. Credit Suisse Group Ag (CSGN.Z.IX) tumbled over -20% after the bank’s largest investor said it could not provide the Swiss bank with more financial assistance, sparking a fresh selloff in bank stocks around the world. Also, European Central Bank policymakers will likely raise rates by a half-percentage-point on Thursday, despite turmoil in the banking sector, a source close to the Governing Council told Reuters on Wednesday. In corporate news, Bollore (BOL.FP) climbed over +8% after the company decided to launch a cash tender offer on its shares. At the same time, H & M Hennes & Mauritz Ab (HMB.S.DX) dropped over -6% after the world’s second-biggest fashion retailer reported a smaller-than-expected increase in sales over the December-February period.

France’s CPI and Eurozone’s Industrial Production data were released today.

The French February CPI has been reported at +1.1% m/m and +6.3% y/y, stronger than expectations of +0.9% m/m and +6.2% y/y.

Eurozone January Industrial Production stood at +0.7% m/m and +0.9% y/y, stronger than expectations of +0.4% m/m and +0.2% y/y.

Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.55%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.03%.

China’s Shanghai Composite today closed higher after data indicated that an economic recovery in the country was gradually gaining steam. Data on Wednesday showed China’s industrial production rose +2.4% y/y in February, compared to +1.3% y/y in December, bouncing back from pandemic-era lows. The reading, however, was slightly lower than the +2.6% y/y growth expected by economists. Also, retail sales jumped +3.5% y/y in February, reversing a -1.8% annual drop seen in December, in line with expectations. In addition, fixed asset investment stood at +5.5% y/y in February, stronger than expectations of +4.4% y/y. Meanwhile, the People’s Bank of China said Wednesday that the government would step up financing support for private micro and small companies.

At the same time, Japan’s Nikkei 225 Stock Index closed slightly higher after paring earlier gains led by bank and financial stocks. Also, minutes from the Bank of Japan’s policy meeting in January showed that members reiterated the need to keep an ultra-dovish policy. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up 15.64% and hit a new 3-month high of 21.52.

Pre-Market U.S. Stock Movers

Jounce Therapeutics Inc (JNCE) spiked over +36% in pre-market trading after the immunotherapy company confirmed receipt of an acquisition proposal from Concentra Biosciences.

Deciphera Pharmaceuticals LLC (DCPH) climbed over +3% in pre-market trading after announcing that the U.S. FDA granted breakthrough therapy designation for QINLOCK.

Vacasa Inc (VCSA) slid about -11% in pre-market trading after the company reported mixed Q4 results.

Smartsheet Inc (SMAR) soared more than +11% in pre-market trading after the company reported better-than-expected Q4 results and provided solid Q1 and FY24 guidance.

SentinelOne Inc (S) rose over +4% in pre-market trading after the company reported upbeat Q4 results and posted better-than-expected Q1 revenue guidance.

Freshpet Inc (FRPT) plunged about -9% in pre-market trading after the company announced a $350M convertible senior notes offering to qualified institutional buyers.

Charles Schwab Corp (SCHW) gained over +3% in pre-market trading after Credit Suisse upgraded the stock to outperform from neutral. 

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - March 15th

Adobe (ADBE), Ping An Insurance Company of China (PNGAY), Franco-Nevada (FNV), EON SE (EONGY), ZTO Express Cayman (ZTO), Five Below (FIVE), GDS Holdings (GDS), Array (ARRY), Enlight Energy (ENLT), Chindata (CD), Nuscale Power (SMR), EverCommerce (EVCM), Arcos Dorados (ARCO), Catalyst Pharmaceuticals (CPRX), Calumet (CLMT), BRC Inc. (BRCC), Oatly Group AB (OTLY), Fortuna Silver (FSM), Cadre Holdings (CDRE), Purecycle Technologies Holdings (PCT), LivePerson (LPSN), Proterra (PTRA), I80 Gold (IAUX), Ebix (EBIX), Legacy Housing (LEGH), Babcock & Wilcox Enterprises (BW), Amyris (AMRS), Senseonics Holdings Inc (SENS), Brilliant Earth (BRLT).

More Stock Market News from Barchart

• Finding Opportunity in Chaos: 3 Opportunities for Dividend Growth Investors
• Elon Musk Might Not Be Buying Charles Schwab Stock but These People Are
• Stocks Rally as Bank Jitters Subside
• Western Alliance Bancorp is Up Big on Citadel Purchase of 5.4%