Stock Index Futures Slip Ahead of U.S. Economic Data, Powell’s Testimony Awaited

March S&P 500 E-Mini futures (ESH24) are down -0.25%, and March Nasdaq 100 E-Mini futures (NQH24) are down -0.63% this morning as investors geared up for a new batch of U.S. economic data while looking ahead to Federal Reserve Chair Jerome Powell’s congressional testimony.

In Monday’s trading session, Wall Street’s major indices ended lower. Tesla Inc (TSLA) plunged over -7% and was the top percentage loser on the S&P 500 and Nasdaq 100 after preliminary data released by China’s Passenger Car Association showed the automaker’s China shipments fell -15.5% m/m to 60,365 units in February. Also, International Game Technology PLC (IGT) slumped more than -8% after Stifel downgraded the stock to Hold from Buy. In addition, Apple Inc (AAPL) slid over -2% following a 1.8 billion euros ($2 billion) EU antitrust fine for breaking competition laws over music streaming. On the bullish side, Super Micro Computer Inc (SMCI) soared over +18% after S&P Dow Jones Indices announced late last Friday that the data-server provider will replace Whirlpool Corp. in the S&P 500 effective March 18th. Also, Macy’s Inc (M) gained more than +13% after Arkhouse Management and Brigade Capital Management raised their offer for Macy’s by 14% following the department store operator’s rejection of a previous proposal.

Atlanta Fed President Raphael Bostic said on Monday that he expects the Fed’s first interest-rate cut, scheduled for the third quarter as per his forecast, will be followed by a pause in the subsequent meeting to evaluate the impact of the policy adjustment on the economy.

“If Bostic wants one cut then a pause, you can’t help but wonder if the Fed is wavering on three cuts. The data is doing the talking and it’s really not screaming for the Fed to cut rates,” said Societe Generale strategist Kenneth Broux.

U.S. rate futures have priced in a 3.0% chance of a 25 basis point rate cut at the next FOMC meeting in March and a 19.8% probability of a 25 basis point rate cut at the May FOMC meeting.

Meanwhile, Fed Chair Jerome Powell is set to appear before Congress for his semiannual testimony on Wednesday and Thursday, where he is anticipated to reaffirm his stance that there’s no urgency to lower interest rates.

On the earnings front, notable companies like CrowdStrike Holdings (CRWD), Target (TGT), Ross Stores (ROST), NIO (NIO), Box (BOX), and Nordstrom (JWN) are set to report their quarterly figures today.

Today, all eyes are focused on the U.S. ISM Non-Manufacturing PMI in a couple of hours. Economists, on average, forecast that the February ISM Non-Manufacturing PMI will come in at 53.0, compared to the previous value of 53.4.

Also, investors will likely focus on the U.S. S&P Global Composite PMI, which stood at 52.0 in January. Economists foresee the February figure to be 51.4.

U.S. Factory Orders data will come in today. Economists foresee this figure to stand at -3.1% m/m in January, compared to the previous figure of +0.2% m/m.

The U.S. S&P Global Services PMI will be reported today as well. Economists expect February’s figure to be 51.3, compared to 52.5 in January.

In the bond markets, United States 10-year rates are at 4.193%, down -0.64%.

The Euro Stoxx 50 futures are down -0.35% this morning as investors assessed the latest batch of regional economic data and cautiously awaited the European Central Bank meeting later this week. Losses in automobile and mining stocks are leading the overall market lower. A survey revealed on Tuesday that business activity in the Eurozone displayed indications of improvement last month, with the bloc’s dominant services industry expanding for the first time since July, offsetting a deeper contraction in manufacturing. Meanwhile, the ECB is anticipated to hold interest rates steady on Thursday, with attention mainly directed towards the updated economic projections and any signals from President Lagarde regarding the timing of rate cuts. In corporate news, Thales (HO.FP) climbed over +8% after reporting forecast-beating full-year results. Also, Spirent Communications Plc (SPT.LN) soared more than +59% after Viavi Solutions Inc. agreed to buy the electronic solutions provider for about 1 billion pounds ($1.27 billion).

France’s Services PMI, Spain’s Services PMI, Italy’s Services PMI, Germany’s Services PMI, Eurozone’s Composite PMI, Eurozone’s Services PMI, Italy’s GDP, and Eurozone’s PPI data were released today.

The French February Services PMI stood at 48.4, stronger than expectations of 48.0.

The Spanish February Services PMI arrived at 54.7, stronger than expectations of 53.4.

The Italian February Services PMI came in at 52.2, in line with expectations.

The German February Services PMI was at 48.3, stronger than expectations of 48.2.

Eurozone February Composite PMI has been reported at 49.2, stronger than expectations of 48.9.

Eurozone February Services PMI stood at 50.2, stronger than expectations of 50.0.

The Italian GDP arrived at +0.2% q/q and +0.6% y/y in the fourth quarter, compared to expectations of +0.2% q/q and +0.5% y/y.

Eurozone January PPI has been reported at -0.9% m/m and -8.6% y/y, weaker than expectations of -0.1% m/m and -8.1% y/y.

Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.28%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.03%.

China’s Shanghai Composite Index closed higher today as investors digested the country’s new targets and measures announced at the NPC meeting. Bank stocks led the gains on Tuesday, with Industrial & Commercial Bank of China and Agricultural Bank of China rising over +2%. A series of announcements from China’s National People’s Congress included a 5% economic growth target, a 5.5% urban unemployment goal, and a 3% inflation target, along with measures aimed at bolstering the economy hampered by a property downturn and persistent deflation. Other measures highlighted by Chinese leaders at the annual parliamentary meetings in Beijing encompassed a 7.2% increase in defense spending, the biggest in five years. In addition, Premier Li Qiang stated Tuesday that China will endeavor to stabilize the property sector through targeted measures while providing financing to “justified” projects. Meanwhile, a private-sector survey showed on Tuesday that China’s services activity grew at a slower pace in February as business confidence moderated for the second month and companies reduced staff numbers for the first time since November. In other news, several exchange-traded funds tracking Chinese stocks experienced a surge in turnover, indicating that state-backed funds are supporting the market. In corporate news, JCET Group Co Ltd climbed +10% after the integrated circuit manufacturer signed a deal to acquire 80% of SunDisk China’s subsidiary, Sandisk SemiConductor Shanghai Co Ltd, for $624 million.

The Chinese February Caixin Services PMI came in at 52.5, weaker than expectations of 52.9.

Japan’s Nikkei 225 Stock Index closed just below the flatline today. Losses in pharmaceutical and real-estate stocks offset gains in construction and financial stocks. Data from the Statistics of Japan showed Tuesday that core consumer prices in Japan’s capital experienced a re-acceleration in February compared to the previous year. Separately, a business survey revealed on Tuesday that Japan’s service sector activity grew in February, driven by robust demand in tourism and new product launches. Meanwhile, Japanese government bond yields retreated on Tuesday following an auction for the 10-year bond that garnered decent demand. In corporate news, Obayashi Corp surged over +20% after the general contractor raised its fiscal-year dividend forecast and lifted its mid-term return goals. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -2.86% to 20.38.

The Japanese February Tokyo Core CPI arrived at +2.5% y/y, in line with expectations.

The Japanese February au Jibun Bank Japan Services PMI stood at 52.9, stronger than expectations of 52.5.

Pre-Market U.S. Stock Movers

Gitlab Inc (GTLB) tumbled about -23% in pre-market trading after the DevOps software company issued below-consensus FY25 guidance.

Advanced Micro Devices Inc (AMD) fell over -2% in pre-market trading following a Bloomberg News report that the company will need to obtain a U.S. government license to sell its powerful AI chip to Chinese customers.

Apple Inc (AAPL) slid more than -1% in pre-market trading following a report from research firm Counterpoint indicating that the company’s iPhone sales in China declined by 24% year-over-year during the first six weeks of 2024.

Tesla Inc (TSLA) dropped over -1% in pre-market trading after German media reported Tuesday that production at the company’s Berlin factory was halted due to a power outage.

AeroVironment Inc (AVAV) surged more than +19% in pre-market trading after the maker of military drones and unmanned vehicles posted upbeat Q3 results and raised its full-year guidance.

Paymentus Holdings Inc (PAY) climbed over +18% in pre-market trading after the provider of bill payment technology reported blowout Q4 results and provided solid FY24 revenue and adjusted EBITDA guidance.

Chemours Co (CC) dropped more than -2% in pre-market trading after UBS downgraded the stock to Neutral from Buy with a price target of $21.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - March 5th

CrowdStrike Holdings (CRWD), Target (TGT), Ross Stores (ROST), Ferguson (FERG), Franco-Nevada (FNV), NIO Inc. (NIO), Amer Sports (AS), Hashicorp (HCP), Box Inc. (BOX), Nuvei (NVEI), Nordstrom (JWN), Global Business Travel (GBTG), Oddity Tech (ODD), First Watch Restaurant (FWRG), Meridianlink (MLNK), Couchbase (BASE), Agiliti (AGTI), Cadre Holdings (CDRE), Vivid Seats (SEAT), V2X Inc (VVX), Cricut (CRCT), ChargePoint Holdings (CHPT), Riskified (RSKD), CECO Environmental (CECO), Bristow Inc (VTOL), Cipher Mining (CIFR), Myers Industries (MYE), SmartRent (SMRT), Lsb Industries (LXU), Consolidated Communications (CNSL), Allient (ALNT), Orthofix (OFIX), Axogen Inc (AXGN), Nyxoah (NYXH), Greenlight Capital Re (GLRE), W&T Offshore (WTI), Cerus (CERS), Neuropace (NPCE), PlayAGS (AGS), Semler Scientifc (SMLR), Sophia Genetics (SOPH), Entravision (EVC), Weyco (WEYS), Newtek (NEWT), Aquestive Therapeutics (AQST), LB Foster (FSTR), BlackRock Kelso (BKCC), Compugen (CGEN), Ranger Energy Services (RNGR), Ooma Inc (OOMA), Rigel (RIGL), Angel Oak Mortgage (AOMR), 908 Devices (MASS), Aeva Technologies (AEVA).

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