Stock Index Futures Tick Higher as Investors Brace for U.S. Economic Data

March S&P 500 E-Mini futures (ESH24) are up +0.07%, and March Nasdaq 100 E-Mini futures (NQH24) are up +0.15% this morning as investors geared up for a fresh batch of U.S. economic data.

In Monday’s trading session, Wall Street’s major indices ended lower. Insulet Corporation (PODD) plunged over -8% and was the top percentage loser on the S&P 500, adding to last Friday’s -6% drop after providing a weaker-than-expected FY24 revenue growth forecast. Also, Alcoa Corp (AA) slumped more than -4% after making a $2.2 billion offer to acquire its Australian joint-venture partner Alumina Ltd. In addition, Moderna Inc (MRNA) fell over -2% after HSBC downgraded the stock to Reduce from Hold with a price target of $86. On the bullish side, Domino’s Pizza Inc (DPZ) climbed more than +5% after reporting better-than-expected Q4 total domestic store comparable sales growth. Also, Micron Technology Inc (MU) gained over +4% after announcing it started volume production of its high-bandwidth memory semiconductors, HBM3E, for use in Nvidia’s latest AI chip. 

Economic data on Monday showed that U.S. new home sales rose +1.5% m/m to 661K in January, weaker than expectations of 680K. At the same time, the U.S. January Building Permits came in at 1.489M, stronger than expectations of 1.470M.

Meanwhile, U.S. rate futures have priced in a 0.5% chance of a 25 basis point rate cut at the next central bank meeting in March and a 17.4% chance of a 25 basis point rate cut at the conclusion of the Fed’s May meeting.

On the earnings front, notable companies like Lowe’s (LOW), American Tower (AMT), AutoZone (AZO), and eBay (EBAY) are set to report their quarterly figures today.

Today, all eyes are focused on U.S. CB Consumer Confidence data in a couple of hours. Economists, on average, forecast that February CB Consumer Confidence will stand at 114.8, compared to the previous figure of 114.8.

Also, investors will likely focus on U.S. Durable Goods Orders data, which stood at 0.0% m/m in December. Economists foresee the January figure to be -4.9% m/m.

The U.S. S&P/CS HPI Composite - 20 n.s.a. will come in today. Economists expect December’s figure to be +6.0% y/y, compared to the previous number of +5.4% y/y.

U.S. Core Durable Goods Orders data will also be closely watched today. Economists estimate this figure to come in at +0.2% m/m in January, compared to the previous value of +0.6% m/m.

The U.S. Richmond Manufacturing Index will be reported today as well. Economists expect February’s figure to be -4, compared to the previous value of -15.

In the bond markets, United States 10-year rates are at 4.264%, down -0.82%.

The Euro Stoxx 50 futures are up +0.27% this morning as investors digested corporate earnings reports while awaiting inflation data this week that could influence the trajectory of interest rates. Gains in mining stocks are leading the overall market higher. A survey showed on Tuesday that Germany’s consumer sentiment is expected to improve in March, propelled by increasing income expectations, although sentiment remains subdued due to a sluggish economic climate. Meanwhile, market participants are anticipating the release of the Fed’s favored inflation gauge on Thursday and the Eurozone consumer price index on Friday. In corporate news, Bouygues (EN.FP) climbed over +6% after the French construction-to-telecoms conglomerate posted an annual operating profit above its target. Also, Abrdn Plc (ABDN.LN) gained about +2% after the U.K. asset manager reported better-than-expected full-year adjusted operating profit and revealed intentions to reduce its workforce by 500 employees.

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

The German March GfK Consumer Climate Index came in at -29.0, in line with expectations.

The French February Consumer Confidence stood at 89, weaker than expectations of 92.

Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +1.29%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.01%.

China’s Shanghai Composite Index closed higher today. Artificial intelligence stocks jumped on Tuesday, helped by the generative artificial intelligence boom in the U.S. Sentiment towards AI firms was also boosted following a record deal of about $2.5 billion to establish a Chinese generative AI startup, Moonshot AI, with tech behemoths like Alibaba Group and Tencent leading the funding round, as reported by Bloomberg News. Communications equipment and automobile stocks also surged. Meanwhile, investor focus is mainly on the purchasing managers’ data for February, scheduled for later this week, which is expected to offer additional insights into the economic recovery in Asia’s biggest economy. In addition, market participants are awaiting the Chinese government’s annual plenary sessions in early March, during which more supportive policy announcements are anticipated to be made. In other news, foreign investors bought a net 12.2 billion yuan ($1.70 billion) worth of Chinese shares through the Stock Connect on Tuesday. In corporate news, Jing-Jin Electric Technologies Co Ltd climbed over +5% after securing a deal to manufacture 100,000 sets of three-in-one electric drive assembly equipment for an undisclosed client in Europe.

Japan’s Nikkei 225 Stock Index closed just above the flatline today as sentiment was subdued following a pause in Wall Street’s rally overnight and slightly stronger-than-expected inflation data from the country. Bank and steel stocks outperformed on Tuesday, while retail and railway stocks were laggards. Government data released Tuesday revealed that Japan’s core consumer inflation slowed for the third consecutive month in January but surpassed forecasts and held at the Bank of Japan’s 2% target. Meanwhile, Japanese government bond yields rose on Tuesday, with the 2-year yield briefly reaching its highest level since 2011 following a stronger-than-expected inflation print, thereby boosting confidence in the BOJ’s anticipated exit from the negative interest rates regime in the coming months. Traders increased the probability of the BOJ exiting its negative rate policy by April to about 82%, compared to 78% on Monday. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -4.72% to 20.40.

“The inflation report is adding to speculation that the BOJ will end negative-rate policy as early as March and is serving as a selling catalyst for bonds,” said Kazuya Fujiwara, a fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities Co.

The Japanese January National Core CPI arrived at +2.0% y/y, stronger than expectations of +1.9% y/y.

Pre-Market U.S. Stock Movers

Hims Hers Health Inc (HIMS) surged about +18% in pre-market trading after the telehealth platform posted better-than-expected Q4 EPS and issued above-consensus FY24 revenue guidance.

Zoom Video Communications Inc (ZM) climbed over +12% in pre-market trading after the communications software company reported upbeat Q4 results, provided solid Q1 guidance, and announced a new $1.5B buyback program.

Unity Software Inc (U) plunged more than -14% in pre-market trading after the company posted mixed Q4 results and offered weaker-than-expected FY24 revenue guidance.

Workday Inc (WDAY) slumped over -5% in pre-market trading after the back-office software company gave soft full-year subscription revenue guidance.

Roku Inc (ROKU) fell more than -3% in pre-market trading after Wells Fargo downgraded the stock to Underweight from Equal Weight with a price target of $51.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - February 27th

Lowe’s (LOW), American Tower (AMT), Bank of Montreal (BMO), Republic Services (RSG), Bank of Nova Scotia (BNS), AutoZone (AZO), Sempra Energy (SRE), American Electric Power (AEP), Constellation Energy (CEG), Alcon (ALC), Agilent Technologies (A), Extra Space Storage (EXR), Coupang LLC (CPNG), Devon Energy (DVN), Splunk (SPLK), eBay (EBAY), Axon Enterprise (AXON), Bentley (BSY), First Solar (FSLR), JM Smucker (SJM), Ovintiv (OVV), Smith&Nephew SNATS (SNN), Gaming & Leisure Properties (GLPI), Ryan Specialty Group Holdings (RYAN), Permian Resources (PR), Universal Health Services (UHS), Henry Schein (HSIC), Chemed (CHE), Jones Lang LaSalle (JLL), Light Wonder (LNW), Vaxcyte (PCVX), BWX Tech (BWXT), Acadia Healthcare (ACHC), Pinnacle West (PNW), Cytokinetics Inc (CYTK), Klaviyo (KVYO), Norwegian Cruise Line (NCLH), Darling Ingredients (DAR), Masimo (MASI), Civitas Resources (CIVI), Shift4 Payments Inc (FOUR), CAVA Group (CAVA), Beacon Roofing (BECN), Macy’s Inc (M), Sealed Air (SEE), Federal Signal (FSS), Inter Parfums (IPAR), Sotera Health (SHC), Boston Beer (SAM), Perrigo (PRGO), Urban Outfitters (URBN), ACADIA (ACAD), Progyny (PGNY), California Resources (CRC), Credo Technology Holding (CRDO), Nelnet (NNI), Tricon Capital Group Inc (TCN), Sabra (SBRA), Recursion Pharmaceuticals (RXRX), Carter’s (CRI), ICF International (ICFI), Flywire (FLYW), Millicom (TIGO), Integral Ad Science Holding LLC (IAS), Grocery Outlet (GO), Gulfport Energy Operating (GPOR), agilon health (AGL), ICU Medical (ICUI), Procept Biorobotics (PRCT), Par Pacific Holdings (PARR), Bumble (BMBL), Privia Health Group (PRVA), Ambarella (AMBA), Zeta Global Holdings (ZETA), Vizio Holding (VZIO), Rocket Lab USA (RKLB), Alphatecs (ATEC), Syndax Pharmaceuticals (SNDX), Delek Logistics Partners LP (DKL), Array (ARRY), Myriad Genetics (MYGN), Zai Lab (ZLAB), Apollo Medical (ASTH), Stagwell (STGW), Huron (HURN), Atlas Energy Solutions (AESI), Delek US Energy (DK), Global Net Lease (GNL), Supernus (SUPN), Cracker Barrel Old (CBRL), National Vision (EYE), Kura Oncology Inc (KURA), Xencor Inc (XNCR), Ready Capital (RC), Thoughtworks Holding (TWKS), Xenia Hotels & Resorts Inc (XHR), LeMaitre Vascular (LMAT), Lemonade (LMND), PAR Technology (PAR), Ligand (LGND), Safety Insurance (SAFT), Easterly Government Properties (DEA), Diamond Offshore Drilling (DO), Revolve (RVLV), Hyster-Yale Materials Handling (HY).

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