S&P Futures Tick Lower as Investors Await Key U.S. GDP Data and Fed Speak

March S&P 500 E-Mini futures (ESH24) are trending down -0.27% this morning as market participants looked ahead to a new round of U.S. economic data, comments from Fed officials, and earnings reports from notable cloud sector players Salesforce and Snowflake.

In Tuesday’s trading session, Wall Street’s major indexes closed mixed. Norwegian Cruise Line Holdings (NCLH) surged over +19% and was the top percentage gainer on the S&P 500 after the cruise line operator reported better-than-expected Q4 revenue, guided to a surprise profit in Q1, and gave a strong 2024 adjusted EBITDA forecast. Also, Constellation Energy Corp (CEG) climbed more than +16% and was the top percentage gainer on the Nasdaq 100 after the company posted stronger-than-expected Q4 adjusted EBITDA and provided above-consensus FY24 adjusted EPS guidance. In addition, Zoom Video Communications Inc (ZM) rose +8% after the company reported upbeat Q4 results, offered solid Q1 guidance, and announced a new $1.5 billion buyback program. On the bearish side, Workday Inc (WDAY) fell more than -3% and was the top percentage loser on the Nasdaq 100 after the payroll software company issued a soft full-year subscription revenue forecast. Also, Unity Software Inc (U) slumped over -6% after providing below-consensus FY24 revenue guidance. 

Economic data on Tuesday showed the U.S. CB consumer confidence index unexpectedly fell to 106.7 in February, weaker than expectations of 114.8. Also, U.S. January durable goods orders fell -6.1% m/m, and U.S. January core durable goods orders fell -0.3% m/m, weaker than expectations of -4.9% m/m and +0.2% m/m, respectively. In addition, the U.S. S&P/CS HPI Composite - 20 n.s.a. rose +6.1% y/y in December, stronger than expectations of +6.0% y/y. Finally, the U.S. February Richmond Fed manufacturing survey came in at -5, stronger than expectations of -9.

Fed Governor Michelle Bowman on Tuesday repeated her anticipation that inflation will further decrease with interest rates held at current levels but emphasized that it’s too soon to initiate rate cuts. “Should the incoming data continue to indicate that inflation is moving sustainably toward our 2% goal, it will eventually become appropriate to gradually lower our policy rate to prevent monetary policy from becoming overly restrictive. In my view, we are not yet at that point,” Bowman said.

Meanwhile, U.S. rate futures have priced in a 0.5% chance of a 25 basis point rate cut at the March FOMC meeting and a 20.8% probability of a 25 basis point rate cut at May’s monetary policy meeting.

On the earnings front, notable companies like Salesforce Inc (CRM), TJX (TJX), Snowflake (SNOW), and HP Inc (HPQ) are slated to release their quarterly results today.

On the economic data front, all eyes are focused on the Commerce Department’s second estimate of gross domestic product, due later in the day. Economists, on average, forecast that U.S. GDP will stand at +3.3% q/q in the fourth quarter, compared to the third-quarter value of +4.9% q/q.

Also, investors will likely focus on the U.S. GDP Price Index, which came in at +3.3% q/q in the third quarter. Economists anticipate the fourth-quarter figure to be +1.5% q/q.

U.S. Wholesale Inventories preliminary data will come in today. Economists expect January’s figure to be +0.1% m/m, compared to the previous number of +0.4% m/m.

U.S. Crude Oil Inventories data will be reported today as well. Economists estimate this figure to be 3.100M, compared to last week’s value of 3.514M.

In addition, market participants will be looking toward a batch of speeches from Fed officials Bostic, Collins, and Williams.

In the bond markets, United States 10-year rates are at 4.295%, down -0.46%.

The Euro Stoxx 50 futures are down -0.27% this morning as investors digested a slew of disappointing earnings reports and cautiously awaited U.S. and Eurozone inflation data later in the week. Losses in real estate and technology stocks are leading the overall market lower. Meanwhile, market participants are gearing up for the release of U.S. core PCE inflation on Thursday and Eurozone inflation data on Friday, seeking indications on the timing of future interest-rate cuts. In corporate news, Asm International N.V. (ASM.NA) fell over -2% after the chip equipment maker offered a weaker-than-expected Q1 revenue forecast. Also, Reckitt Benckiser Group Plc (RKT.LN) plunged more than -9% after the household goods maker reported a drop in Q4 like-for-like sales. In addition, Worldline (WLN.FP) slumped over -11% after the French fintech company reported a full-year loss and issued cautious guidance for 2024. 

Eurozone’s Consumer Confidence data was released today.

Eurozone February Consumer Confidence arrived at -15.5, in line with expectations.

Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -1.91% and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.08%.

China’s Shanghai Composite Index closed lower today as some investors took profits after a recent rally and awaited this week’s manufacturing report and a key political meeting in Beijing next week. Semiconductor and automobile stocks underperformed on Wednesday. Mainland developers listed in Hong Kong also slumped, led by an over -12% fall in China’s largest private property developer, Country Garden Holdings, following the filing of a liquidation petition against it for non-payment of a $205 million loan. On the positive side, in his budget speech on Wednesday, Hong Kong Financial Secretary Paul Chan announced that the city would cancel stamp duties on all residential property transactions for both locals and permanent residents and allocate additional funds to bolster tourism. In addition, the Hong Kong Monetary Authority relaxed mortgage rules, pausing stress tests and permitting certain homebuyers to purchase properties with smaller down payments. In corporate news, NetEase Inc. gained over +4% following the approval of the mobile version of the company’s blockbuster PC title Naraka Bladepointa, boosting expectations of robust earnings this year. Investors are awaiting the Chinese purchasing managers’ data for February, scheduled for release on Friday, along with the commencement of China’s National People’s Congress next week.

Japan’s Nikkei 225 Stock Index closed slightly lower today as investors opted to lock in some profits following the benchmark index’s climb to record highs for the previous three consecutive sessions. Healthcare and electronics stocks underperformed on Wednesday, while utilities and energy stocks gained ground. Government data revealed on Wednesday that the coincident index in Japan for December has been revised downward to 115.9 points from a flash reading of 116.2 points, while the leading economic index has been adjusted upward to 110.2 points from a preliminary reading of 110.0. Meanwhile, Japanese government bond yields rose on Wednesday as sentiment was influenced by speculation that the Bank of Japan might soon end its negative rate policy. In corporate news, Nishi-Nippon Financial Holdings Inc. climbed over +5% after setting the interest rates on the loans totaling 2 billion yen that it extended to Fukuoka REIT. Also, KFC Holdings Japan Ltd. surged more than +15% following a report indicating that Mitsubishi Corp. may sell its entire stake in the company. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -5.78% to 19.22.

Pre-Market U.S. Stock Movers

Beyond Meat Inc (BYND) soared about +56% in pre-market trading after the company reported better-than-expected Q4 revenue, propelled by strong international sales.

eBay Inc (EBAY) climbed over +3% in pre-market trading after the company topped Q4 revenue and gross merchandising volume expectations, gave a positive Q1 outlook, and authorized an additional $2 billion stock repurchase program.

Coupang Inc (CPNG) gained more than +8% in pre-market trading after the company reported upbeat Q4 results.

First Solar Inc (FSLR) rose over +4% in pre-market trading after reporting stronger-than-expected Q4 EPS and issuing in-line full-year guidance. 

Urban Outfitters Inc (URBN) plunged more than -9% in pre-market trading after the company posted weaker-than-expected Q4 results.

Annovis Bio Inc (ANVS) slumped over -8% in pre-market trading after Brookline downgraded the stock to Hold from Buy with a $9 price target.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - February 28th

Salesforce Inc (CRM), RBC (RY), TJX (TJX), Snowflake (SNOW), NetEase (NTES), Monster Beverage (MNST), Baidu (BIDU), HP Inc (HPQ), Vistra Energy (VST), Viatris (VTRS), Nutanix (NTNX), Okta (OKTA), Sarepta (SRPT), Topbuild Corp (BLD), EMCOR (EME), NRG (NRG), Endeavor Group (EDR), UWM Holdings (UWMC), Stantec (STN), Vipshop (VIPS), Natera Inc (NTRA), Api Group Corp (APG), Jazz Pharma (JAZZ), Duolingo (DUOL), Donaldson (DCI), Icahn Enterprises (IEP), DoubleVerify Holdings (DV), CCC Intelligent Solutions Holdings (CCCS), AAON (AAON), Ultrapar Participacoes (UGP), Marathon Digital (MARA), Nexstar (NXST), Blackstone Secured Lending Fund (BXSL), Kinetik Holdings (KNTK), Clearwater Analytics Holdings (CWAN), Iovance Biotherapeutics (IOVA), Stericycle (SRCL), Merit (MMSI), Squarespace (SQSP), Southwest Gas Hold (SWX), PagSeguro Digital (PAGS), Chemours Co (CC), National Storage Affiliates Trust (NSA), Amicus (FOLD), Advance Auto Parts (AAP), Marqeta (MQ), Cactus (WHD), Dycom Industries (DY), C3.ai (AI), Kontoor Brands (KTB), Harmony Gold Mining (HMY), Immunocore Holdings (IMCR), Integra (IART), iQIYI (IQ), Steven Madden (SHOO), Globalstar Inc (GSAT), EPR Properties (EPR), United Parks Resorts (PRKS), Greif Bros (GEF), Baytex Energy Corp (BTE), Clear Secure (YOU), MYR Group (MYRG), Evertec Inc (EVTC), Crinetics Pharma (CRNX), Patterson (PDCO), Shoals Technologies Group (SHLS), Frontdoor (FTDR), Lifestance Health Group (LFST), AvidXchange Holdings (AVDX), Alkami Technology (ALKT), Golden Ocean (GOGL), IONQ (IONQ), Life Time Holdings (LTH), Schrodinger (SDGR), Sovos Brands (SOVO), Janus International Group (JBI), Talos Energy (TALO), ODP (ODP), Payoneer Global Inc (PAYO), TG (TGTX), Kodiak Gas Services (KGS), Compass Diversified (CODI), Catalyst Pharmaceuticals (CPRX), Warby Parker (WRBY), Taboola (TBLA), Global Partners (GLP), Magnite (MGNI), Excelerate Energy (EE), US Physicalrapy (USPH), Kiniksa Pharma (KNSA), Definitive Healthcare (DH), OneSpaWorld (OSW), Mirum Pharmaceuticals (MIRM), Acm Research (ACMR).

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