March Nasdaq 100 E-Mini futures (NQH24) are trending up +0.98% this morning as investors cheered forecast-beating quarterly results from tech behemoths Meta and Amazon while awaiting the crucial monthly U.S. nonfarm payrolls report for clues on the Federal Reserve’s interest rate trajectory.
Meta Platforms Inc (META) surged over +16% in pre-market trading after the social media giant reported upbeat Q4 results and provided above-consensus Q1 revenue guidance. The company also announced its first-ever quarterly dividend of $0.50 a share and authorized an additional $50 billion in buybacks. Also, Amazon.com Inc (AMZN) climbed more than +6% in pre-market trading after the Seattle-based e-commerce giant posted better-than-expected Q4 results and gave a strong Q1 operating income outlook. At the same time, Apple Inc (AAPL) fell over -2% in pre-market trading after reporting weaker-than-expected Q1 sales in China.
In Thursday’s trading session, Wall Street’s major averages closed higher. Corteva Inc (CTVA) surged over +18% and was the top percentage gainer on the S&P 500 after the company posted upbeat Q4 results and provided a solid 2024 operating EBITDA forecast. Also, Etsy Inc (ETSY) climbed more than +9% after announcing the appointment of Elliott Investment Management partner Marc Steinberg to its board of directors. In addition, Merck & Company Inc (MRK) rose over +4% and was the top percentage gainer on the Dow after the drug maker posted better-than-expected Q4 results and offered a strong FY24 outlook. On the bearish side, Honeywell International Inc (HON) fell more than -2% and was the top percentage loser on the Dow after the industrial conglomerate reported mixed Q4 results and issued below-consensus FY24 sales guidance.
Economic data on Thursday showed that the U.S. ISM manufacturing index unexpectedly rose to a 15-month high of 49.1 in January, stronger than expectations of 47.2. Also, U.S. Q4 nonfarm productivity rose +3.2% q/q, stronger than expectations of +2.4% q/q, while U.S. Q4 unit labor costs rose +0.5% q/q, less than the +1.3% q/q consensus. In addition, U.S. construction spending rose +0.9% m/m in December, stronger than expectations of +0.5% m/m. Finally, the number of Americans filing for jobless claims the past week unexpectedly rose +9K to a 2-1/2 month high of 224K, higher than the expected figure of 213K.
Meanwhile, U.S. rate futures have priced in a 34.5% chance of a 25 basis point rate cut at the March FOMC meeting and a 91.7% chance of at least a 25 basis point rate cut at the May FOMC meeting.
In other news, investors poured $20.1 billion into stocks in the week to Wednesday, while $15.2 billion flowed into cash, according to a report from Bank of America citing data from EPFR.
On the earnings front, notable companies like Exxon Mobil (XOM), Chevron (CVX), AbbVie (ABBV), and Charter Communications (CHTR) are set to report their quarterly figures today.
Today, all eyes are focused on U.S. Nonfarm Payrolls data in a couple of hours. Economists, on average, forecast that January Nonfarm Payrolls will come in at 187K, compared to the previous value of 216K.
Also, investors will likely focus on the U.S. Michigan Consumer Sentiment Index, which stood at 69.7 in December. Economists foresee the January figure to be 78.8.
U.S. Factory Orders data will come in today. Economists foresee this figure to stand at +0.3% m/m in December, compared to the previous figure of +2.6% m/m.
U.S. Average Hourly Earnings data will also be closely watched today. Economists anticipate January’s figures to be +0.3% m/m and +4.1% y/y, compared to the previous numbers of +0.4% m/m and +4.1% y/y.
The U.S. Unemployment Rate will be reported today as well. Economists estimate this figure to be 3.8% in January, compared to the previous value of 3.7%.
In the bond markets, United States 10-year rates are at 3.888%, up +0.73%.
The Euro Stoxx 50 futures are up +0.80% this morning as investors digested positive corporate updates and looked ahead to a crucial U.S. payrolls report. Gains in financial and technology stocks are leading the overall market higher. Data released on Friday indicated that French month-on-month industrial output growth reached a 7-month high in December. In corporate news, Danske Bank A/S (DANSK.C.DX) climbed over +5% after the Danish lender posted in-line Q4 earnings and announced a new 5.5 billion Danish kroner ($802.1 million) share buyback. Also, Vallourec (VK.FP) gained more than +6% after the French steel tubes maker stated it anticipates 2023 results to surpass its previous outlook. In addition, Mercedes-Benz Group Ag (MBG.D.DX) rose over +2% after the German automaker reported better-than-expected preliminary annual free cash flow of the industrial business.
France’s Industrial Production data was released today.
The French December Industrial Production has been reported at +1.1% m/m, stronger than expectations of +0.2% m/m.
Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed down -1.46% and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.41%.
China’s Shanghai Composite Index closed sharply lower today, logging its worst week in five years as economic uncertainties continued to weigh on investor sentiment. Healthcare, information technology, semiconductor, and new energy stocks led the declines on Friday. Investors remained cautious following an official government survey revealing that factory activity in the country stayed in negative territory in January, weighed down by a renewed decline in new orders and a deceleration in output growth. Meanwhile, China’s central bank issued 150 billion yuan ($21 billion) in loans to policy banks through its pledged supplementary lending facility in January, continuing this practice for a second month as part of efforts to support its “urban village” plan. In other news, dealers observed late surges in volume on exchange-traded funds tracking the CSI300, indicating state-backed buying. However, it only managed to lift markets from lows, failing to alleviate the growing negative sentiment prevailing in recent weeks. In corporate news, Tencent Holdings Ltd rose over +2% following China’s approval of licenses for 32 imported online games for 2024, which includes two titles to be published by the social media and gaming giant.
“Market sentiment likely to stay range bound in the near term amid lukewarm macro data and quieter policy cycle ahead of holidays. Under continuous deflationary pressure and its potential implications on earnings, we have lowered our China market 2024 index target prices,” Morgan Stanley said in a note.
Japan’s Nikkei 225 Stock Index closed higher today, tracking overnight gains on Wall Street, although the rise was limited as investors cautiously awaited U.S. jobs data. Gains in chip-related stocks led the overall market higher, with Advantest Corp climbing over +3% and Tokyo Electron Ltd rising over +1%. Meanwhile, Japan’s 10-year government bond yield notched its most significant weekly decline since mid-December on Friday, driven down by falling U.S. yields and a surprisingly robust auction outcome the previous day. In corporate news, Nippon Television Holdings Inc. surged over +22% following the broadcasting company’s announcement that it would pay dividends to foreign shareholders not listed in the shareholder registry. Also, Konica Minolta Inc. soared more than +9% after the office equipment manufacturer narrowed its net loss for the nine months through December. At the same time, Aozora Bank Ltd. tumbled more than -15%, extending its losses from yesterday, following the announcement by the Tokyo-based lender that it would report its first loss in 15 years, attributed to bad loans associated with U.S. property. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +3.30% to 19.39.
Pre-Market U.S. Stock Movers
Meta Platforms Inc (META) surged over +16% in pre-market trading after the social media giant reported upbeat Q4 results and provided above-consensus Q1 revenue guidance. The company also announced its first-ever quarterly dividend of $0.50 a share and authorized an additional $50 billion in buybacks.
Amazon.com Inc (AMZN) climbed more than +6% in pre-market trading after the Seattle-based e-commerce giant posted better-than-expected Q4 results and gave a strong Q1 operating income outlook.
Apple Inc (AAPL) fell over -2% in pre-market trading after reporting weaker-than-expected Q1 sales in China.
Clorox Co (CLX) soared more than +8% in pre-market trading after the company posted upbeat Q2 results and raised its FY24 adjusted EPS guidance.
Microchip Technology Inc (MCHP) dropped over -2% in pre-market trading after providing weaker-than-expected Q4 guidance.
Macy’s Inc (M) rose more than +1% in pre-market trading after Citi upgraded the stock to Neutral from Sell with a price target of $18.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Friday - February 2nd
Exxon Mobil (XOM), AbbVie (ABBV), Chevron (CVX), Regeneron Pharma (REGN), Bristol-Myers Squibb (BMY), Cigna (CI), Charter Communications (CHTR), Aon (AON), WW Grainger (GWW), Imperial Oil (IMO), LyondellBasell Industries (LYB), Church&Dwight (CHD), Cboe Global (CBOE), Brookfield Renewable (BEP), Saia (SAIA), Brookfield Business (BBU), Piper Sandler (PIPR), Twist Bioscience (TWST), Virtus (VRTS), Capital Product (CPLP), WisdomTree (WT), Johnson Outdoors (JOUT).
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On the date of publication, Oleksandr Pylypenko 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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