March S&P 500 E-Mini futures (ESH24) are trending down -0.04% this morning as market participants braced for U.S. factory activity data while also awaiting remarks from Fed officials.
In Thursday’s trading session, Wall Street’s major indexes closed higher. Hormel Foods Corporation (HRL) climbed over +14% and was the top percentage gainer on the S&P 500 after the food and meat processor posted upbeat Q1 results. Also, Monster Beverage Corp (MNST) gained more than +5% after reporting better-than-expected Q4 gross margins. In addition, Salesforce Inc (CRM) rose about +3% and was the top percentage gainer on the Dow after the cloud software giant reported stronger-than-expected Q4 results, rolled out its first-ever quarterly dividend, and increased its share buyback program by $10 billion. On the bearish side, Snowflake Inc (SNOW) plunged more than -18% after the data warehousing company offered below-consensus Q1 and FY25 product revenue guidance and announced that Chief Executive Officer Frank Slootman is stepping down from the role. Also, HP Inc (HPQ) fell over -1% after posting weaker-than-expected Q1 revenue.
Data from the U.S. Department of Commerce on Thursday showed that the U.S. core PCE price index, a key inflation gauge monitored by the Federal Reserve, came in at +0.4% m/m and +2.8% y/y in January, in line with expectations. Also, the U.S. February Chicago PMI unexpectedly fell to 44.0, weaker than expectations of 48.1. In addition, U.S. personal spending rose +0.2% m/m in January, right on expectations. Finally, the number of Americans filing for initial jobless claims in the past week rose +13K to 215K, higher than the expected figure of 209K.
“Moderate numbers from the Fed’s preferred inflation gauge may lower temperatures after ‘hot’ CPI and PPI readings a couple of weeks ago. While rate cuts are still unlikely until the second half of the year,” said Chris Larkin, managing director for trading and investing at E*Trade from Morgan Stanley.
Atlanta Fed President Raphael Bostic said Thursday that if the economy evolves as he expects, it will likely be appropriate for the U.S. central bank to begin interest rate cuts in the summer. Also, San Francisco Fed President Mary Daly said that policymakers stand prepared to reduce interest rates as needed but stressed that there’s currently no immediate need for cuts given the robustness of the economy. In addition, Cleveland Fed President Loretta Mester said Thursday’s inflation data indicated that central bank officials have more work to do to cool price pressures, but she maintained her expectation that the Fed will implement three interest rate cuts this year.
Meanwhile, U.S. rate futures have priced in a 3.0% chance of a 25 basis point rate cut at the conclusion of the Fed’s March meeting and a 25.2% chance of a 25 basis point rate cut at the May FOMC meeting.
Today, all eyes are focused on the U.S. ISM Manufacturing PMI in a couple of hours. Economists, on average, forecast that the February ISM Manufacturing PMI will stand at 49.5, compared to the previous value of 49.1.
Also, investors will likely focus on the U.S. S&P Global Manufacturing PMI, which came in at 50.7 in January. Economists foresee the February figure to be 51.5.
The U.S. Michigan Consumer Sentiment Index will also be closely watched today. Economists foresee this figure to stand at 79.6 in February, compared to January’s number of 79.0.
U.S. construction spending data will come in today as well. Economists expect January’s figure to be +0.2% m/m, compared to the previous number of +0.9% m/m.
In addition, market participants will be anticipating speeches from Fed officials Logan, Waller, Bostic, and Daly.
In the bond markets, United States 10-year rates are at 4.262%, up +0.24%.
The Euro Stoxx 50 futures are up +0.16% this morning as investors digested a raft of regional economic data, including flash inflation figures and factory activity data. Bank and automobile stocks outperformed on Friday. A survey revealed on Friday that Eurozone manufacturing activity contracted for the 20th consecutive month in February amid weak demand, although firms expressed optimism about the year ahead. Separately, preliminary data from Eurostat showed that Eurozone inflation moderated less than expected in February, supporting European Central Bank officials’ stance against hastily lowering interest rates. In corporate news, Daimler Truck Holding Ag (DTG.D.DX) surged over +12% after the German truck maker reported better-than-expected pre-tax 2023 earnings, raised its dividend, and announced a 2 billion euros ($2.16 billion) share buyback program.
Spain’s Manufacturing PMI, Italy’s Manufacturing PMI, France’s Manufacturing PMI, Germany’s Manufacturing PMI, Eurozone’s Manufacturing PMI, Italy’s CPI (preliminary), Eurozone’s CPI (preliminary), Eurozone’s Core CPI (preliminary), and Eurozone’s Unemployment Rate were released today.
The Spanish February Manufacturing PMI stood at 51.5, stronger than expectations of 49.7.
The Italian February Manufacturing PMI arrived at 48.7, weaker than expectations of 49.0.
The French February Manufacturing PMI came in at 47.1, stronger than expectations of 46.8.
The German February Manufacturing PMI was at 42.5, stronger than expectations of 42.3.
Eurozone February Manufacturing PMI stood at 46.5, stronger than expectations of 46.1.
The Italian February CPI arrived at +0.1% m/m and +0.8% y/y, weaker than expectations of +0.3% m/m and +0.9% y/y.
Eurozone February CPI has been reported at +2.6% y/y, stronger than expectations of +2.5% y/y.
Eurozone February Core CPI came in at +3.1% y/y, stronger than expectations of +2.9% y/y.
Eurozone January Unemployment Rate was at 6.4%, in line with expectations.
Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.39%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.90%.
China’s Shanghai Composite Index closed higher today as investors digested domestic PMI data and looked ahead to major political meetings starting next week in the hopes of additional stimulus. Sentiment in China’s stock market saw an uplift following the implementation of various measures by the new chairman of China’s securities watchdog aimed at boosting confidence, which included imposing new restrictions on short-selling and cracking down on trading misconduct. Meanwhile, an official survey on Friday revealed that China’s manufacturing activity contracted for the 5th consecutive month in February, while services activity in China accelerated for the 14th straight month in February. Separately, a private-sector survey showed that Chinese factory activity grew for the 4th consecutive month in February, driven by improvements in production and new orders. At the same time, China’s home sales slump persisted in February despite regulators intensifying efforts to revive the beleaguered property market. According to preliminary data from China Real Estate Information Corp., the value of new home sales from the 100 largest real estate firms plummeted by 60% from the previous year to 185.9 billion yuan ($25.8 billion) in February, marking a steeper decline compared to the 34.2% drop observed in January. Investor attention is currently centered on China’s most significant annual political event of the year, the National People’s Congress, which commences on Tuesday.
The Chinese February Manufacturing PMI stood at 49.1, in line with expectations.
The Chinese February Non-Manufacturing PMI came in at 51.4, stronger than expectations of 50.9.
The Chinese February Caixin Manufacturing PMI arrived at 50.9, stronger than expectations of 50.7.
Japan’s Nikkei 225 Stock Index closed sharply higher today and hit an all-time high, buoyed by overnight gains on Wall Street after a key U.S. inflation reading came in as expected. All sectors of the Nikkei 225 ended in the green, with real estate, energy, and technology stocks experiencing the largest gains. A private-sector survey revealed on Friday that Japan’s factory activity contracted at the fastest pace in more than 3-1/2 years in February as deteriorating demand worsened the economic outlook. Separately, government data showed on Friday that Japan’s unemployment rate remained unchanged in January compared to the previous month. Meanwhile, the yen weakened against the greenback on Friday following remarks from Bank of Japan Governor Kazuo Ueda, who stated that its price target is not already in sight. “We are not yet in a position to foresee the achievement of a sustainable and stable inflation target,” Ueda said. In corporate news, Seven & I Holdings Co Ltd fell over -1% following a report from Bloomberg News indicating that the company is testing a larger store format for its 7-Eleven outlets in Japan, featuring a broader range of products. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +7.85% to 20.74.
The Japanese February au Jibun Bank Japan Manufacturing PMI arrived at 47.2, in line with expectations.
The Japanese January Jobs/applications ratio stood at 1.27, in line with expectations.
The Japanese January Unemployment Rate was at 2.4%, in line with expectations.
Pre-Market U.S. Stock Movers
Dell Technologies Inc (DELL) surged about +21% in pre-market trading after the company reported upbeat Q4 results, issued strong FY25 guidance, and unveiled a 20% increase in its annual dividend.
NetApp Inc (NTAP) climbed over +17% in pre-market trading after the data management company posted better-than-expected Q3 results and raised its FY24 adjusted EPS guidance for a second quarter in a row.
Autodesk Inc (ADSK) gained more than +8% in pre-market trading after the company reported stronger-than-expected Q4 results and provided above-consensus FY25 revenue guidance.
Hewlett Packard Enterprise Co (HPE) slid over -5% in pre-market trading after the enterprise tech company posted mixed Q1 results and offered a weak Q2 forecast.
Fisker Inc (FSR) plummeted more than -38% in pre-market trading after the company expressed doubts about its ability to sustain operations as a going concern.
Apple Inc (AAPL) fell about -1% in pre-market trading after Goldman Sachs removed the stock from its Conviction List.
New York Community Bancorp Inc (NYCB) tumbled over -29% in pre-market trading after identifying “material weaknesses” in its internal accounting protocols.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Friday - March 1st
NexGen Energy (NXE), Tidewater (TDW), EchoStar (SATS), RadNet (RDNT), Plug Power (PLUG), Amneal Pharma A (AMRX), Fubotv (FUBO), McEwen Mining Inc. (MUX).
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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.
