March S&P 500 E-Mini futures (ESH24) are trending down -0.23% this morning as market participants looked ahead to the release of the Federal Reserve’s January policy meeting minutes while also awaiting quarterly results from chipmaker Nvidia.
In Tuesday’s trading session, Wall Street’s major indexes closed in the red, with the tech-heavy Nasdaq 100 falling to a 2-week low. Expeditors International of Washington Inc (EXPD) plunged over -6% and was the top percentage loser on the S&P 500 after the company reported downbeat Q4 results. Chip stocks also retreated as NVIDIA Corporation (NVDA) fell more than -4% in the run-up to its earnings report. In addition, Tesla Inc (TSLA) slumped over -3% after Phillip Securities downgraded the stock to Neutral from Accumulate with a $175 price target. On the bullish side, Discover Financial Services (DFS) soared more than +12% and was the top percentage gainer on the S&P 500 after Capital One Financial agreed to acquire the company in a $35.3 billion all-stock deal. Also, Walmart Inc (WMT) advanced over +3% and was the top percentage gainer on the Dow after reporting better-than-expected Q4 U.S. comparable sales. The U.S. retail giant also said it agreed to buy smart-TV maker Vizio Holding Corp. for about $2.3 billion.
On the earnings front, notable companies like NVIDIA (NVDA), Analog Devices (ADI), Synopsys (SNPS), Etsy (ETSY), Rivian Automotive (RIVN), Marathon Oil (MRO), and Lucid Group (LCID) are set to report their quarterly figures today.
Today, investors will be closely monitoring the release of the Federal Reserve’s minutes from the January meeting for any new insights into the trajectory of monetary policy, with markets currently pricing in four quarter-point rate cuts this year, starting in June.
“For now, market pricing is consistent with our call for 100bps of cuts, starting in June,” Morgan Stanley said in a note.
Meanwhile, U.S. rate futures have priced in a 6.5% probability of a 25 basis point rate cut at the March FOMC meeting and a 33.7% chance of a 25 basis point rate cut at May’s monetary policy meeting.
The U.S. economic data slate is mainly empty on Wednesday. However, market participants will likely focus on speeches from Atlanta Fed President Raphael Bostic and Fed Governor Michelle Bowman.
In the bond markets, United States 10-year rates are at 4.270%, down -0.14%.
The Euro Stoxx 50 futures are up +0.13% this morning as investors cautiously awaited the release of the Fed’s January meeting minutes and Nvidia’s quarterly results. Gains in automobile and retail stocks are leading the overall market higher. At the same time, bank stocks underperformed, with HSBC Holdings Plc (HSBA.LN) plunging over -7% after the lender reported an 80% drop in Q4 pre-tax profit on the back of a $3 billion charge on its holding in Bank of Communications Co. and $2 billion on its French sale. Meanwhile, investors are awaiting the Eurozone consumer confidence flash estimate for February, scheduled for later in the day. In other corporate news, Glencore Plc (GLEN.LN) slumped more than -3% after the commodities trader and miner reported a sharp decline in annual profit and cut its dividend. In addition, Rio Tinto Plc (RIO.LN) dropped over -1% after the world’s biggest iron ore miner reported a 12% fall in annual underlying profit on weaker metal prices and rising costs.
Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.97%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.26%.
China’s Shanghai Composite Index closed higher today as investors welcomed policymakers’ efforts to restore market confidence. Real estate stocks led the gains on Wednesday after banks increased funding help for the struggling sector. Meanwhile, the Shanghai and Shenzhen stock exchanges pledged to tighten supervision of quantitative trading after freezing the accounts of a major fund for three days in an unusually severe punishment. The pledges followed the bourses’ imposition of trading bans on Ningbo Lingjun Investment Management Partnership, which dumped a total of 2.57 billion yuan ($357 million) in shares within a minute on Monday when indices plummeted. In other news, the Central Financial Commission of the Communist Party announced plans to enhance China’s interconnection with the global market by reducing restrictive policies, as reported by the South China Morning Post, citing an article from the party’s official media, People’s Daily. In corporate news, Anyuan Coal Industry Group Co Ltd climbed over +3% after announcing the reopening of operations in two of its mines, Shanxi Coal Mine and Liushe Coal Mine, after the conclusion of a mandatory safety inspection.
Japan’s Nikkei 225 Stock Index closed slightly lower today as investors digested the latest economic data and geared up for earnings from U.S. chip giant Nvidia. Losses in technology and insurance stocks led the overall market lower. Ministry of Finance data showed Wednesday that the country’s exports rose much more than expected in January from the same month a year ago. Separately, the Reuters Tankan survey revealed a significant downturn in business sentiment among big Japanese manufacturers in February, with pessimists outnumbering optimists for the first time in 10 months. In corporate news, Kohoku Kogyo Co Ltd dropped over -1% after the company reported significantly lower attributable profit and net sales for fiscal 2023. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +5.66% to 20.55.
The Japanese January Trade Balance has been reported at -1,758.3B yen, stronger than expectations of -1,925.9B yen.
The Japanese January Exports stood at +11.9% y/y, stronger than expectations of +9.5% y/y.
The Japanese January Imports came in at -9.6% y/y, weaker than expectations of -8.4% y/y.
Pre-Market U.S. Stock Movers
Palo Alto Networks Inc (PANW) tumbled about -23% in pre-market trading after the cybersecurity company cut its full-year revenue and billings guidance.
SolarEdge Technologies Inc (SEDG) plunged over -15% in pre-market trading after the company issued lower-than-expected Q1 revenue guidance.
Teladoc Inc (TDOC) slumped more than -20% in pre-market trading after the telehealth and telemedicine services provider reported mixed Q4 results and provided disappointing Q1 and FY24 guidance.
Keysight Technologies Inc (KEYS) slid over -5% in pre-market trading after the company offered below-consensus Q2 guidance.
Amazon.com Inc (AMZN) gained more than +1% in pre-market trading after S&P Dow Jones Indices said on Tuesday that the e-commerce giant will replace Walgreens Boots Alliance Inc. in the Dow Jones Industrial Average effective next week.
The Wendy’s Co (WEN) fell over -1% in pre-market trading after JPMorgan downgraded the stock to Neutral from Overweight with a price target of $19.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Wednesday - February 21st
NVIDIA (NVDA), Analog Devices (ADI), Synopsys (SNPS), Suncor Energy (SU), Verisk (VRSK), Exelon (EXC), ANSYS (ANSS), Nutrien (NTR), Garmin (GRMN), Vertiv Holdings Co (VRT), Sendas Distribuidora (ASAI), Rivian Automotive (RIVN), Nordson (NDSN), Fidelity Financial (FNF), Host Hotels Resorts (HST), Marathon Oil (MRO), Avangrid Inc (AGR), HF Sinclair (DINO), Western Midstream Partners (WES), Texas Pacific (TPL), EXACT Sciences (EXAS), Repligen (RGEN), NiSource (NI), Clean Harbors (CLH), United Therapeutics (UTHR), Mosaic (MOS), Wingstop Inc (WING), Etsy Inc (ETSY), Churchill Downs (CHDN), Lucid Group (LCID), Range Resources (RRC), Wix.Com Ltd (WIX), Chord Energy (CHRD), OGE Energy (OGE), GlobalE Online (GLBE), Ionis Pharma (IONS), Owl Rock Capital (OBDC), Gildan Activewear (GIL), F G Annuities Life (FG), Dutch Bros (BROS), Alight (ALIT), Five9 (FIVN), Bausch + Lomb (BLCO), Valmont Industries (VMI), Alamos Gold (AGI), Glaukos Corp (GKOS), SM Energy (SM), Joby Aviation (JOBY), Huntsman (HUN), Jackson Financial (JXN), Ormat (ORA), Goosehead Insurance (GSHD), Sunrun Inc (RUN), Remitly Global (RELY), B2Gold (BTG), DigitalOcean Holdings (DOCN), McGrath (MGRC), Marriot Vacations Worldwide (VAC), Ziff Davis (ZD), Broadstone Net (BNL), Travel + Leisure Co (TNL), Mister Car Wash (MCW), American States Water (AWR), Genworth (GNW), Constellium Nv (CSTM), Avista (AVA), Gibraltar Industries (ROCK), Triple Flag Precious Metals (TFPM), Q2 Holdings (QTWO), AssetMark (AMK), Chesapeake Utilities (CPK), ACV Auctions (ACVA), Rogers (ROG), Camping World Holdings (CWH), Medical Properties (MPW), Outfront Media (OUT), Photronics (PLAB), SJW (SJW), Ultra Cleans (UCTT), The Cheesecake (CAKE), Ingevity (NGVT), Gentherm (THRM), Vital Energy (VTLE), Shutterstock (SSTK), Veris Residential (VRE), Tandem Diabetes Care (TNDM), Arcus Biosciences (RCUS), Kimbell Royalty (KRP), Cannae (CNNE), Jack In The Box (JACK), Equinox Gold (EQX), PROG Holdings (PRG), Kennedy-Wilson (KW), Sunnova Energy (NOVA), Forward Air (FWRD), Encore Capital (ECPG), Perdoceo Education (PRDO), Calliditas Therapeutics (CALT), Bridge Investment Group Holdings (BRDG).
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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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