March S&P 500 E-Mini futures (ESH24) are down -0.02%, and March Nasdaq 100 E-Mini futures (NQH24) are up +0.04% this morning as investors looked ahead to the release of U.S. inflation data while also bracing for a flurry of earnings reports from industry titans covering a wide range of sectors.
In Friday’s trading session, Wall Street’s major averages ended mixed, with the benchmark S&P 500 closing above the historic 5,000 mark for the first time. Cloudflare Inc (NET) soared over +19% after the content delivery network and cloud security platform posted better-than-expected Q4 results and offered solid full-year guidance. Also, chip stocks gained ground, with Applied Materials Inc (AMAT) climbing more than +6% and Lam Research Corp (LRCX) rising over +5%. In addition, Masonite International Corp (DOOR) surged about +35% after Owens Corning agreed to acquire the maker of doors for $3.9 billion in cash. On the bearish side, Take-Two Interactive Software Inc (TTWO) plunged over -8% and was the top percentage loser on the Nasdaq 100 after cutting its full-year net bookings forecast. Also, PepsiCo Inc (PEP) fell more than -3% after the beverage giant provided weaker-than-expected annual organic revenue and core profit growth guidance.
Annual revisions of the CPI data published by the Labor Department’s Bureau of Labor Statistics showed on Friday that core consumer prices rose at a +3.3% annualized rate in Q4, unchanged from the previous reading.
“[Friday’s] data primarily serves to solidify the market’s perception that Powell has made significant progress on inflation and therefore rate cuts will be in the offing, if not in March, then May or June,” Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets, said in a note.
Dallas Fed President Lorie Logan stated on Friday that she perceives no immediate need to reduce interest rates, emphasizing that policymakers have time to evaluate incoming economic data. “I’m really not seeing any urgency to make any additional adjustments to rates at this time while we get a better understanding and build our confidence whether the progress that we’ve seen in inflation will be sustained over the medium run,” Logan said. Also, Atlanta Fed President Raphael Bostic said he remains “laser-focused” on ensuring inflation returns to the central bank’s 2% target, emphasizing the necessity to “stay the course.” “I’m really grateful that it has made good progress getting back down close to our 2% target, but there’s still a way to go,” Bostic said.
Meanwhile, U.S. rate futures have priced in a 15.5% chance of a 25 basis point rate cut at the next FOMC meeting in March and a 61.4% chance of at least a 25 basis point rate cut at the May FOMC meeting.
Fourth-quarter earnings season rolls on, and investors await new reports from notable names this week, including Coca-Cola (KO), Cisco Systems (CSCO), Shopify (SHOP), Energy Transfer LP (ET), Occidental Petroleum Corporation (OXY), Roku (ROKU), Datadog (DDOG), Twilio (TWLO), Kraft Heinz (KHC), DraftKings (DKNG), Upstart Holdings (UPST), Applied Materials (AMAT), and Marriott International (MAR). Analysts anticipate a 9.0% year-over-year growth in aggregate S&P 500 earnings for Q4, compared to the 4.7% growth forecasted on January 1st.
On the economic data front, the U.S. consumer inflation report for January will be the main highlight in the coming week. Also, market participants will be eyeing a spate of other economic data releases, including the U.S. Core CPI, Retail Sales, Core Retail Sales, Philadelphia Fed Manufacturing Index, Export Price Index, Import Price Index, Initial Jobless Claims, NY Empire State Manufacturing Index, Industrial Production, Manufacturing Production, Business Inventories, Crude Oil Inventories, Building Permits (preliminary), Housing Starts, PPI, Core PPI, and Michigan Consumer Sentiment Index (preliminary).
In addition, several Fed officials will be making appearances this week, including Bowman, Barkin, Kashkari, Barr, Goolsbee, Waller, Bostic, and Daly.
In other news, the International Monetary Fund’s Managing Director, Kristalina Georgieva, stated on Monday that the IMF is now “very confident” the world economy will see a soft landing, and she added that interest rates would begin decreasing from mid-year. “We are very confident that the world economy is now poised for this soft landing we have been dreaming for,” Georgieva said at a World Governments Summit in Dubai.
The U.S. economic data slate is mainly empty on Monday.
In the bond markets, United States 10-year rates are at 4.185%, down -0.19%.
The Euro Stoxx 50 futures are up +0.38% this morning, boosted by a record close for the S&P 500 on Friday, with investors gearing up for the release of a key U.S. inflation reading later this week. Rate-sensitive real estate stocks led the gains on Monday, while energy stocks underperformed. Meanwhile, investors this week will also be keeping a close watch on a flurry of regional economic data, including the Eurozone’s fourth-quarter GDP growth, consumer price inflation from Spain and other regions, and the ZEW survey. In corporate news, Tod’s Spa (TOD.M.DX) surged over +16% following the announcement that L Catterton, a private equity firm backed by LVMH, will acquire a 36% stake in the Italian luxury group in a deal aiming at taking the company private. Also, Novo Nordisk A/S (NOVOB.C.DX) gained about +1% following a report that its controlling shareholder, Novo Holdings, intends to invest up to $7 billion annually by 2030. At the same time, Saras Spa (SRS.M.DX) plunged more than -5% after global commodity trader Vitol agreed to buy 35% of the oil refiner from Italy’s Moratti family at 1.75 euros per share.
The European economic data slate is empty on Monday.
Markets in Japan and China were closed for the holidays.
Pre-Market U.S. Stock Movers
Applied Digital Corp (APLD) slid about -3% in pre-market trading after the company said that its Ellendale data center hosting facility continues to face a power outage that commenced on January 18th.
Rivian Automotive Inc (RIVN) fell over -2% in pre-market trading after Barclays downgraded the stock to Equal Weight from Overweight with a price target of $16.
Urban Outfitters Inc (URBN) rose more than +1% in pre-market trading after UBS upgraded the stock to Neutral from Sell with a price target of $41.
XPO Inc (XPO) dropped over -3% in pre-market trading after Morgan Stanley downgraded the stock to Underweight from Equal Weight with a price target of $80.
PepsiCo Inc (PEP) gained about +0.6% in pre-market trading after Citi upgraded the stock to Buy from Neutral with a price target of $195.
Joby Aviation (JOBY) climbed more than +5% in pre-market trading after the company announced plans to launch air taxi services in the United Arab Emirates by early 2026.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Monday - February 12th
Arista Networks (ANET), Cadence Design (CDNS), Waste Management (WM), Principal Financial (PFG), Trimble (TRMB), Monday.Com (MNDY), Medpace Holdings (MEDP), SCI (SCI), Lattice (LSCC), Federal Realty (FRT), Watts Water Technologies (WTS), Brixmor Property (BRX), Avis (CAR), ZoomInfo (ZI), Vornado (VNO), Teradata (TDC), Blackbaud (BLKB), Otter Tail (OTTR), Goodyear Tire & Rubber Co (GT), Brighthouse Financial (BHF), Equity Commonwealth (EQC), Star Bulk Carriers (SBLK), Bank of N.T. Butterfield Son (NTB), Alexanders (ALX), Hudson Pacific (HPP), Aspen Aerogels Inc (ASPN), Safe Bulkers (SB).
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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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