Nasdaq Futures Slip as Intel’s Forecast Disappoints, U.S. Inflation Data Looms

Nasdaq 100 E-Mini futures (NQH24) are trending down -0.47% this morning as a disappointing forecast for the current quarter from Intel weighed on sentiment, while market participants braced for a reading on the Federal Reserve’s preferred inflation gauge.

Intel Corporation (INTC) tumbled over -11% in pre-market trading after the chipmaker’s Q1 guidance for both sales and profit fell short of Wall Street estimates, overshadowing its better-than-expected Q4 results. Also, Summit Insights downgraded the stock to Hold from Buy.

In Thursday’s trading session, Wall Street’s major indexes ended higher. American Airlines Group (AAL) soared over +10% after the carrier topped Q4 EPS and margin expectations and issued above-consensus 2024 adjusted EPS guidance. Also, International Business Machines (IBM) climbed more than +9% and was the top percentage gainer on the Dow after the legacy tech firm posted stronger-than-expected Q4 results and provided an upbeat full-year revenue growth forecast. In addition, Comcast Corp (CMCSA) gained over +3% after the media and cable giant reported better-than-expected Q4 results and announced an extended $15 billion buyback program. On the bearish side, Tesla Inc (TSLA) tumbled more than -12% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the company reported downbeat Q4 results and warned that vehicle volume growth may be “notably” lower in 2024 than the level observed in 2023. Also, Humana Inc (HUM) plunged over -11% after the health insurer provided disappointing FY24 adjusted EPS guidance and withdrew its 2025 earnings target.

The Commerce Department’s preliminary reading on Thursday showed the U.S. economy grew at a +3.3% annualized rate in the fourth quarter, stronger than expectations of +2.0%. Also, U.S. December new home sales rose +8.0% m/m to 664K, stronger than expectations of 645K. In addition, U.S. core durable goods orders rose +0.6% m/m in December, stronger than expectations of +0.2% m/m. Finally, the number of Americans filing for jobless claims the past week rose +25K to 214K, higher than the expected figure of 200K. 

“There are no recession concerns here, and to make matters even better, we don’t see any accompanying blowout growth in prices that are used in the GDP calculation. Stronger growth without inflation is what everyone wants,” said Charles Hepworth, investment director at GAM Investments. 

Meanwhile, U.S. rate futures have priced in a 2.6% chance of a 25 basis point rate cut at January’s monetary policy meeting and a 48.1% probability of a 25 basis point rate cut at the March FOMC meeting.

On the earnings front, notable companies like American Express (AXP), Colgate-Palmolive (CL), Norfolk Southern (NSC), and Autoliv (ALV) are set to report their quarterly figures today.

Today, all eyes are focused on the U.S. core personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, in a couple of hours. Economists, on average, forecast that the core PCE price index will stand at +0.2% m/m and +3.0% y/y in December, compared to the previous values of +0.1% m/m and +3.2% y/y.

Also, investors will likely focus on U.S. Pending Home Sales data, which stood at 0.0% m/m in November. Economists foresee the December figure to be +1.5% m/m.

U.S. Personal Spending data will be reported today as well. Economists foresee this figure to stand at +0.4% m/m in December, compared to the previous number of +0.2% m/m.

In the bond markets, United States 10-year rates are at 4.110%, down -0.53%.

The Euro Stoxx 50 futures are up +0.72% this morning as investors digested the latest earnings reports while also awaiting a crucial U.S. inflation print. Gains in luxury stocks are leading the overall market higher, with Lvmh (MC.FP) climbing over +10% after the maker of Louis Vuitton handbags and Dior fashions posted a 10% increase in Q4 sales. Also, strategists at Barclays Plc upgraded European luxury stocks to Overweight on Friday, highlighting their global diversification as a key strength. A survey revealed on Friday that the German consumer sentiment index unexpectedly fell heading into February, with shoppers opting to save rather than spend amid a wintry economic landscape. Meanwhile, the European Central Bank, as expected, kept its main refinancing rate unchanged on Thursday and provided no indication that it is considering the initiation of easing. In other corporate news, Remy Cointreau (RCO.FP) soared more than +13% after the French spirits maker reported a slightly smaller-than-anticipated decline in Q3 sales.

Germany’s GfK Consumer Climate and France’s Consumer Confidence data were released today.

The German February GfK Consumer Climate Index came in at -29.7, weaker than expectations of -24.5.

The French January Consumer Confidence arrived at 91, stronger than expectations of 90.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.14%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -1.34%.

China’s Shanghai Composite Index closed marginally higher today as investors cautiously awaited further details on the stimulus plans. Real estate stocks gained ground on Friday following an announcement from the National Financial Regulatory Administration, stating that China’s financial institutions should actively fulfill reasonable financing demands for property projects. At the same time, healthcare, semiconductor, and new energy stocks underperformed. Meanwhile, analysts at Citi said that the government’s recently pledged 2 trillion yuan package to boost the capital markets “seems not sufficient to create a real impact on the underlying challenges in the economy.” Also, Morgan Stanley lowered its targets for major Chinese stock indexes, citing the country’s challenges related to debt, demographics, and deflation as obstacles to further equity gains. In corporate news, WuXi AppTec Co Ltd tumbled -10% following a bill proposal by some U.S. lawmakers seeking to ban the Chinese medical technology company and its subsidiaries due to their connections with the Chinese Communist Party. Investors are now eagerly anticipating the release of purchasing managers’ index readings for January, scheduled for next week, to gather more insights into business activity at the start of the new year.

Japan’s Nikkei 225 Stock Index closed lower today, snapping a two-week winning streak amid weakness in chip stocks and rising expectations of a Bank of Japan pivot. All sectors of the Nikkei 225 ended in the red, with financial and technology stocks experiencing the largest declines. Data released on Friday showed that core inflation in Japan’s capital cooled below the central bank’s 2% target for the first time in over a year and a half, highlighting policymakers’ belief that cost-push pressures will continue to diminish in the coming months. Meanwhile, the latest Bank of Japan minutes released on Friday indicated that board members are contemplating the strength of price growth and the timing of a widely anticipated interest rate hike. In corporate news, Renesas Electronics Corp slumped over -7%, Advantest Corp plunged more than -5%, and Tokyo Electron Ltd fell over -2% following Intel’s underwhelming Q1 forecast. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +1.60% to 19.64.

The Japanese January Tokyo Core CPI stood at +1.6% y/y, weaker than expectations of +1.9% y/y.

Pre-Market U.S. Stock Movers

Intel Corporation (INTC) tumbled over -11% in pre-market trading after the chipmaker’s Q1 guidance for both sales and profit fell short of Wall Street expectations, overshadowing its better-than-expected Q4 results. Also, Summit Insights downgraded the stock to Hold from Buy.

KLA Corporation (KLAC) slumped more than -7% in pre-market trading after the company issued a weaker-than-expected Q3 forecast.

Visa Inc (V) fell more than -3% in pre-market trading after the payment network company posted slightly weaker-than-expected Q1 payments volume and increased its FY24 expense growth guidance.

T-Mobile US Inc (TMUS) dropped more than -3% in pre-market trading after reporting mixed Q4 results.

Tellurian Inc (TELL) surged over +16% in pre-market trading following a report from Bloomberg indicating that it has hired an adviser to explore the potential sale of the LNG company.

Snap Inc (SNAP) gained more than +2% in pre-market trading after Deutsche Bank upgraded the stock to Buy from Hold with a $19 price target.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - January 26th

American Express (AXP), Colgate-Palmolive (CL), Norfolk Southern (NSC), Booz Allen Hamilton (BAH), Autoliv (ALV), Gentex (GNTX), Badger Meter (BMI), First Hawaiian (FHB), BankUnited (BKU), Oxford Lane (OXLC), Dime Community (DCOM), Southside (SBSI), South Plains Financial (SPFI).

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