Nasdaq Futures Climb as Netflix Results Boost Sentiment, U.S. PMI Data and Tesla Earnings in Focus

Nasdaq 100 E-Mini futures (NQH24) are trending up +0.69% this morning as solid results from Netflix boosted investor sentiment, while market participants also braced for U.S. business activity data and a deluge of corporate earnings reports.

Netflix Inc (NFLX) surged over +10% in pre-market trading after the streaming giant reported stronger-than-expected Q4 revenue and posted its best customer gain since a COVID-19 pandemic boost. The company added 13.12 million customers for the quarter, compared to Wall Street’s expectation of 8.91 million.

In Tuesday’s trading session, Wall Street’s major indexes closed mixed. Verizon Communications Inc (VZ) climbed over +6% and was the top percentage gainer on the S&P 500 and Dow after the telecom giant reported Q4 revenue that topped estimates and issued a strong annual profit forecast. Also, United Airlines Holdings Inc (UAL) advanced more than +5% after the carrier reported better-than-expected Q4 results and provided a solid FY24 profit outlook. In addition, Procter & Gamble Company (PG) rose over +4% after the company topped Q2 profit expectations. On the bearish side, 3M Company (MMM) plunged more than -11% and was the top percentage loser on the S&P 500 and Dow after providing below-consensus FY24 adjusted EPS guidance. Also, DR Horton Inc (DHI) slumped over -9% after the homebuilder reported weaker-than-expected quarterly orders.

Economic data on Tuesday showed that the Richmond Fed’s gauge of manufacturing activity unexpectedly fell to a 3-1/2 year low of -15 in January, weaker than expectations of -7.

Meanwhile, U.S. rate futures have priced in a 2.6% chance of a 25 basis point rate cut at the January FOMC meeting and a 50.0% probability of a 25 basis point rate cut at the conclusion of the Fed’s March meeting.

Fourth-quarter earnings season picks up steam, with investors awaiting fresh reports from notable companies today, including Tesla (TSLA), Abbott Laboratories (ABT), IBM (IBM), AT&T (T), General Dynamics (GD), Las Vegas Sands (LVS), and CSX (CSX).

Today, all eyes are focused on the U.S. S&P Global Manufacturing PMI preliminary reading in a couple of hours. Economists, on average, forecast that the January Manufacturing PMI will stand at 47.9, compared to the previous value of 47.9.

The U.S. S&P Global Services PMI preliminary reading will also be closely watched today. Economists foresee this figure to stand at 51.0 in January, compared to the previous number of 51.4.

U.S. Crude Oil Inventories data will be reported today as well. Economists estimate this figure to be -2.150M, compared to last week’s value of -2.492M.

In the bond markets, United States 10-year rates are at 4.107%, down -0.90%.

The Euro Stoxx 50 futures are up +1.36% this morning as upbeat corporate earnings reports lifted sentiment, while investors also digested key PMI data from Europe’s largest economies. Gains in technology and mining stocks are leading the overall market higher. A survey showed on Wednesday that the contraction in Eurozone business activity eased in January, with an improved manufacturing outlook partially countered by a sharper decline in the bloc’s dominant services industry. In corporate news, SAP Se (SAP.D.DX) surged over +6% after Europe’s biggest software maker reported stronger-than-expected 2023 operating profit and unveiled a restructuring plan for 2024 that will affect about 8,000 jobs and increase its focus on artificial intelligence. Also, Asml Holding (ASML.NA) climbed more than +6% after Europe’s most valuable technology company reported Q4 earnings that topped expectations and said orders more than tripled last quarter from the previous three months.

France’s Manufacturing PMI (preliminary), France’s Services PMI (preliminary), Germany’s Manufacturing PMI (preliminary), Germany’s Services PMI (preliminary), Eurozone’s Manufacturing PMI (preliminary), Eurozone’s Composite PMI (preliminary), Eurozone’s Services PMI (preliminary), U.K.’s Manufacturing PMI (preliminary), and U.K.’s Services PMI (preliminary) data were released today.

The French January Manufacturing PMI came in at 43.2, stronger than expectations of 42.5.

The French January Services PMI was at 45.0, weaker than expectations of 46.0.

The German January Manufacturing PMI stood at 45.4, stronger than expectations of 43.7.

The German January Services PMI arrived at 47.6, weaker than expectations of 49.5.

Eurozone January Manufacturing PMI came in at 46.6, stronger than expectations of 44.8.

Eurozone January Composite PMI has been reported at 47.9, weaker than expectations of 48.0.

Eurozone January Services PMI arrived at 48.4, weaker than expectations of 49.0.

U.K. January Manufacturing PMI has been reported at 47.3, stronger than expectations of 46.7.

U.K. January Services PMI came in at 53.8, stronger than expectations of 53.2.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +1.80%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.80%.

China’s Shanghai Composite Index closed higher today, extending gains for the second day amid hopes for a market rescue package. Brokerage stocks led the gains on Wednesday. Mainland developers and tech giants listed in Hong Kong also rallied. Bloomberg News reported on Tuesday, citing people familiar with the matter, that Chinese authorities are planning to mobilize about 2 trillion yuan ($278 billion), primarily from the offshore accounts of Chinese state-owned firms, as part of a stabilization fund to buy shares onshore through the Hong Kong exchange link. Meanwhile, China’s central bank governor, Pan Gongsheng, announced Wednesday that the People’s Bank of China would implement a 50-basis-point reduction in the reserve requirement ratio for all banks from February 5th. The PBOC will also cut re-lending and re-discount interest rates by 25 basis points for the rural sector and small firms, effective from January 25th. In other news, Reuters reported on Wednesday that China’s securities regulators have asked certain hedge fund managers to restrict short selling in the country’s stock index futures market. In corporate news, Alibaba Group Holding Ltd soared over +7% following a New York Times report indicating that co-founder Jack Ma and Chairman Joe Tsai purchased millions of dollars worth of shares in the Chinese e-commerce giant during the fourth quarter.

Japan’s Nikkei 225 Stock Index closed lower today as profit-taking continued from the previous session amid bets on an interest rate hike. Real estate and healthcare stocks led the declines on Wednesday, while financial stocks outperformed. Official data showed on Wednesday that Japan’s exports surged to record highs in December, driven by the first increase in shipments to China in over a year and record sales to the United States. Separately, a private business survey revealed on Wednesday that Japan’s factory activity contracted for the eighth consecutive month in January due to weak demand. Meanwhile, Japan’s government bond yields rose to their highest level in over a month on Wednesday following Governor Kazuo Ueda’s statement on Tuesday that the certainty of achieving the Bank of Japan’s price projections has been increasing. Traders interpreted the remarks as hawkish, with swap markets pricing in a 75% probability of a 25-basis-point rate hike by the BOJ in April. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -6.36% to 19.72.

The Japanese December Trade Balance arrived at +62.1B, stronger than expectations of -122.1B.

The Japanese December Exports stood at +9.8% y/y, stronger than expectations of +9.1% y/y.

The Japanese December Imports came in at -6.8% y/y, weaker than expectations of -5.3% y/y.

The Japanese January au Jibun Bank Japan Manufacturing PMI stood at 48.0, weaker than expectations of 48.2.

Pre-Market U.S. Stock Movers

Netflix Inc (NFLX) surged over +10% in pre-market trading after the streaming giant reported stronger-than-expected Q4 revenue and posted its best customer gain since a COVID-19 pandemic boost. The company added 13.12 million customers for the quarter, compared to Wall Street’s expectation of 8.91 million.

Intuitive Surgical Inc (ISRG) climbed more than +6% in pre-market trading after the company reported upbeat Q4 results.

Texas Instruments Incorporated (TXN) slumped over -4% in pre-market trading after the analog semiconductor company posted mixed Q4 results and provided below-consensus Q1 guidance.

BlackBerry Ltd (BB) plunged more than -11% in pre-market trading following its announcement of the intention to conduct a private offering of $160 million aggregate principal amount of convertible senior notes due 2029.

Uber Technologies Inc (UBER) dropped over -1% in pre-market trading after Gordon Haskett downgraded the stock to Hold from Buy with a $66 price target.

Advanced Micro Devices Inc (AMD) rose more than +2% in pre-market trading after New Street upgraded the stock to Buy from Neutral with a $215 price target.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - January 24th

Tesla (TSLA), Abbott Labs (ABT), IBM (IBM), ServiceNow Inc (NOW), AT&T (T), Elevance Health (ELV), Lam Research (LRCX), CSX (CSX), General Dynamics (GD), Amphenol (APH), Freeport-McMoran (FCX), Crown Castle (CCI), Kimberly-Clark (KMB), TE Connectivity (TEL), Ameriprise Financial (AMP), United Rentals (URI), Las Vegas Sands (LVS), ResMed (RMD), Raymond James Financial (RJF), Teledyne Technologies (TDY), WR Berkley (WRB), Seagate (STX), Textron (TXT), Packaging America (PKG), Knight-Swift Trans (KNX), CACI (CACI), Stifel ( SF), Concentrix (CNXC), RLI (RLI), Prosperity Bancshares (PB), Hexcel (HXL), BOK Financial (BOKF), Columbia Banking (COLB), SLM (SLM), United Community Banks (UCBI), Cohen Steers (CNS), Cathay (CATY), SL Green (SLG), Liberty Oilfield (LBRT), Plexus (PLXS), First Bancorp (FBP), Simmons First National (SFNC), Live Oak Bancshares Inc (LOB), OFG Bancorp (OFG), Pathward Financial (CASH), Origin Bancorp (OBK), Preferred Bank (PFBC), Brookline Bancorp (BRKL), Monro Muffler Brake (MNRO), The First Bancshares (FBMS), Eagle (EGBN), Capitol Federal (CFFN), Amerant Bancorp A (AMTB), Ethan Allen Interiors (ETD), Hbt Fin (HBT), Univest (UVSP), Horizon Bancorp (HBNC), Washington Trust (WASH), Equity Bancshares Inc (EQBK), Alerus Fin (ALRS), Bridgewater Bancshares (BWB), First Bank (FRBA).

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