March S&P 500 E-Mini futures (ESH24) are down -0.19%, and March Nasdaq 100 E-Mini futures (NQH24) are down -0.07% this morning as investors looked ahead to Federal Reserve Chair Jerome Powell’s congressional testimony while also bracing for a fresh slew of U.S. labor market data, with a particular focus on Friday’s nonfarm payrolls report.
In Friday’s trading session, Wall Street’s major averages closed higher, with the benchmark S&P 500 and tech-heavy Nasdaq 100 notching new record highs. NetApp Inc (NTAP) climbed over +18% and was the top percentage gainer on the S&P 500 after the company reported upbeat Q3 results and lifted its full-year adjusted EPS guidance. Also, chip stocks gained ground on lower bond yields and continued enthusiasm for AI, with Marvell Technology (MRVL) surging more than +8% and Advanced Micro Devices (AMD) advancing over +5%. In addition, Dell Technologies Inc (DELL) soared more than +31% after the company posted better-than-expected Q4 results, issued strong FY25 guidance, and announced a 20% increase in its annual dividend. On the bearish side, Dominion Energy Inc (D) plunged over -6% and was the top percentage loser on the S&P 500 after the company provided a below-consensus FY24 adjusted EPS forecast.
Economic data on Friday showed that the U.S. ISM manufacturing index unexpectedly fell to 47.8 in February, weaker than expectations of 49.5. Also, U.S. January construction spending unexpectedly fell -0.2% m/m, weaker than expectations of +0.2% m/m and the biggest decline in 15 months. In addition, the University of Michigan’s gauge of consumer sentiment was revised lower to 76.9 in February, weaker than expectations of 79.6. At the same time, the U.S. February S&P Global manufacturing PMI climbed to 52.2, stronger than expectations of 51.5.
Chicago Fed President Austan Goolsbee told CNBC on Friday that policymakers should maintain elevated interest rates until they are confident that inflation is on track to return to the 2% target. Also, Atlanta Fed President Raphael Bostic emphasized the need for the Fed to hold interest rates higher for longer to facilitate a further decline in inflation, thereby avoiding the necessity to subsequently raise rates again. In addition, Richmond Fed President Thomas Barkin stated that it’s too soon to predict when the central bank will be able to commence rate cuts.
Meanwhile, U.S. rate futures have priced in a 3.0% chance of a 25 basis point rate cut at the next central bank meeting in March and a 22.5% chance of a 25 basis point rate cut at May’s policy meeting.
In other news, Bank of America’s equity strategists raised their year-end target for the S&P 500 index to 5,400 from 5,000.
On the earnings front, notable companies like CrowdStrike Holdings (CRWD), Target (TGT), Ross Stores (ROST), Broadcom (AVGO), Costco (COST), Kroger (KR), MongoDB (MDB), DocuSign (DOCU), NIO Inc. (NIO), and Gap (GPS) are slated to release their quarterly results this week.
On the economic data front, the U.S. Nonfarm Payrolls report for February 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. ISM Non-Manufacturing PMI, S&P Global Composite PMI, S&P Global Services PMI, Factory Orders, ADP Nonfarm Employment Change, JOLTs Job Openings, Wholesale Inventories, Crude Oil Inventories, Exports, Imports, Trade Balance, Initial Jobless Claims, Nonfarm Productivity, Unit Labor Costs, Consumer Credit, Average Hourly Earnings, Private Nonfarm Payrolls, and Unemployment Rate.
In addition, investors will focus on Federal Reserve Chair Jerome Powell’s semi-annual monetary policy testimony on Capitol Hill. Mr. Powell will testify before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday. Powell is anticipated to reiterate his stance that there is no rush to lower interest rates, particularly in light of recent inflation data indicating persistent price pressures.
The U.S. economic data slate is empty on Monday. However, investor attention will likely be directed towards a speech from Philadelphia Fed President Patrick Harker.
In the bond markets, United States 10-year rates are at 4.196%, up +0.41%.
The Euro Stoxx 50 futures are up +0.12% this morning as investors maintained a cautious stance in anticipation of the European Central Bank’s monetary policy meeting later in the week. Technology and healthcare stocks gained ground on Monday, while real estate and basic materials stocks underperformed. A survey showed on Monday that investor morale in the Eurozone rose for the 5th consecutive month in March to its highest level since April 2023. Meanwhile, the ECB is scheduled to announce its interest rate decision on Thursday. The central bank is widely expected to leave rates unchanged, with the focus primarily on the updated economic projections and any indications from President Lagarde regarding the timing of rate cuts. In corporate news, Delivery Hero Se (DHER.D.DX) climbed over +3% following the announcement of a financing transaction aimed at amending and extending its financing facilities.
Eurozone’s Sentix Investor Confidence Index was released today.
Eurozone March Sentix Investor Confidence Index came in at -10.5, stronger than expectations of -10.8.
Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.41%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.50%.
China’s Shanghai Composite Index closed higher today as investors awaited policy signals from the 14th National People’s Congress, an annual parliamentary gathering in Beijing. Communications equipment, energy, and healthcare stocks outperformed on Monday. At the same time, mainland developers listed in Hong Kong slumped, with China Vanke Co Ltd plunging over -7% as worries regarding the developer’s liquidity outweighed fundraising plans and assurance from a business partner. Meanwhile, investors are awaiting any policy signals from the annual meeting of China’s parliament, which starts on Tuesday and is anticipated to unveil moderate stimulus plans aimed at stabilizing growth. In other news, state media reported on Friday that China’s cabinet approved a plan aimed at promoting large-scale equipment upgrades and boosting sales of consumer goods. In corporate news, BAIC BluePark New Energy Technology slid more than -4% after the company said that its vehicle sales dropped 43% year-on-year to 2,733 units in the first two months of the year.
Japan’s Nikkei 225 Stock Index closed higher today, surpassing the 40,000 threshold for the first time. Gains in chip-related stocks led the overall market higher on Monday, with Renesas Electronics climbing over +4% and Advantest gaining more than +3%. Ministry of Finance data revealed Monday that corporate spending on plant and equipment in Japan surged in the fourth quarter. Meanwhile, Kyodo news agency reported that Japan’s government is contemplating declaring an end to deflation in the wake of increasing prices, citing sources with knowledge of the matter. In corporate news, JSR Corp. climbed over +4% following a media report indicating that state-backed fund Japan Investment Corp plans to initiate a tender offer for the shares later this month. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +1.16% to 20.98.
The Japanese Capital Spending stood at +16.4% y/y in the fourth quarter, stronger than expectations of +2.9% y/y.
Pre-Market U.S. Stock Movers
Super Micro Computer Inc (SMCI) surged about +11% in pre-market trading after S&P Dow Jones Indices said Friday that the data-server provider will join the S&P 500 index later this month, replacing Whirlpool Corp.
Macy’s Inc (M) soared more than +15% in pre-market trading after Arkhouse Management Co. and Brigade Capital Management raised their offer for the department store operator to $24 per share, up from an earlier offer of $21 per share.
Deckers Outdoor Corporation (DECK) climbed over +5% in pre-market trading after S&P Dow Jones Indices said Friday that the footwear maker will replace Zions Bancorporation in the S&P 500 effective March 18th.
DoorDash Inc (DASH) gained more than +4% in pre-market trading after RBC Capital upgraded the stock to Outperform from Sector Perform with a price target of $175.
Dutch Bros Inc (BROS) rose over +2% in pre-market trading after Piper Sandler upgraded the stock to Overweight from Neutral with a price target of $37.
LYFT Inc (LYFT) advanced more than +4% in pre-market trading after RBC Capital upgraded the stock to Outperform from Sector Perform with a price target of $23.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Monday - March 4th
Sea (SE), Gitlab (GTLB), AeroVironment (AVAV), Grupo Aval (AVAL), Crescent Energy (CRGY), Paymentus (PAY), Semrush Holdings (SEMR), Avadel Pharma (AVDL), Global Ship Lease (GSL), Viant Technology (DSP), Stitch Fix (SFIX), Sohu.Com (SOHU), Stellus Capital Investment (SCM), Northwest Pipe (NWPX), Akoya Biosciences (AKYA), ThredUp (TDUP).
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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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