March S&P 500 E-Mini futures (ESH24) are trending up +0.44% this morning as market participants awaited testimony from Federal Reserve Chair Jerome Powell while also bracing for the release of second-tier U.S. jobs data.
In Tuesday’s trading session, Wall Street’s major indexes closed in the red, with the benchmark S&P 500, blue-chip Dow, and tech-heavy Nasdaq 100 dropping to 1-1/2 week lows. Albemarle Corp (ALB) plunged over -17% and was the top percentage loser on the S&P 500 following the announcement of a public offering of $1.75 billion in depositary shares. Also, Tesla Inc (TSLA) slid more than -3% after the electric vehicle maker was compelled to halt production at its European Gigafactory near Berlin following a suspected arson attack on a nearby electricity pylon. In addition, Apple Inc (AAPL) fell over -2% following a report from research firm Counterpoint indicating that iPhone sales in China declined by 24% year-over-year during the first six weeks of 2024. On the bullish side, Target Corporation (TGT) climbed about +12% and was the top percentage gainer on the S&P 500 after the big-box retailer reported better-than-expected Q4 adjusted EPS.
Economic data on Tuesday showed that the U.S. February ISM services index slipped to 52.6 from 53.4 in January, weaker than expectations of 53.0. Also, the U.S. S&P Global services PMI came in at 52.3 in February, surpassing the 51.3 consensus. In addition, U.S. January factory orders fell -3.6% m/m, weaker than expectations of -3.1% m/m and the biggest decline in 3-3/4 years.
Meanwhile, U.S. rate futures have priced in a 3.0% chance of a 25 basis point rate cut at the March FOMC meeting and a 21.6% chance of a 25 basis point rate cut at May’s monetary policy meeting.
Today, market participants will be closely watching Federal Reserve Chairman Jerome Powell’s semi-annual monetary policy testimony before the House Financial Services Committee for clues on the interest-rate outlook.
Also, investors will likely focus on speeches from Minneapolis Fed President Neel Kashkari and San Francisco Fed President Mary Daly.
On the economic data front, all eyes are focused on U.S. ADP Nonfarm Employment Change data in a couple of hours. Economists, on average, forecast that February ADP Nonfarm Employment Change will stand at 149K, compared to the previous value of 107K.
U.S. JOLTs Job Openings data will also be closely watched today. Economists expect January’s JOLTs Job Openings to be 8.800M, compared to the previous figure of 9.026M.
U.S. Wholesale Inventories data will come in today. Economists foresee this figure to stand at -0.1% m/m in January, 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 2.400M, compared to last week’s value of 4.199M.
In the bond markets, United States 10-year rates are at 4.160%, up +0.56%.
The Euro Stoxx 50 futures are up +0.27% this morning as investors digested key retail sales data and looked ahead to congressional testimony from U.S. Federal Reserve Chair Jerome Powell later in the day. China’s pledge to implement vigorous measures to sustain its economic growth also boosted sentiment in the region. Travel, real estate, and chemical stocks outperformed on Wednesday. Data showed on Wednesday that Germany’s trade surplus widened in January, with exports and imports rising more than expected, suggesting a potential recovery in demand for German goods. Separately, European Union statistics data revealed that retail sales in the Eurozone experienced a slight increase in January compared to the previous month. In corporate news, Symrise Ag (SY1.D.DX) climbed over +4% after the German flavor and fragrance maker posted a full-year core profit that topped estimates. At the same time, DHL Group (DHL.D.DX) slumped more than -5% after the German logistics giant provided a weaker-than-expected 2024 operating profit outlook.
Germany’s Trade Balance, Germany’s Exports, Germany’s Imports, and Eurozone’s Retail Sales data were released today.
The German January Trade Balance has been reported at 27.5B euros, stronger than expectations of 21.0B euros.
The German January Exports stood at +6.3% m/m, stronger than expectations of +1.5% m/m.
The German January Imports came in at +3.6% m/m, stronger than expectations of +1.8% m/m.
Eurozone January Retail Sales arrived at +0.1% m/m and -1.0% y/y, compared to expectations of +0.1% m/m and -1.3% y/y.
Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.26% and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.02%.
China’s Shanghai Composite Index closed slightly lower today as the absence of big stimulus measures from Beijing left some investors disappointed. Bank and real estate stocks led the declines on Wednesday. Meanwhile, Zheng Shanjie, chairman of the National Development and Reform Commission, said on Wednesday that China would intensify economic policy adjustments this year. Zheng said that China’s plans to issue 1 trillion yuan ($139 billion) in ultra-long special central government bonds in 2024 aim to stimulate investment and consumption, with the majority of the 1 trillion yuan sovereign debt issued in October expected to be utilized within this year. Also, China’s central bank governor, Pan Gongsheng, stated Wednesday that there was room for further reductions in banks’ reserve requirements and vowed to utilize monetary policy to “mildly” prop up consumer prices. In addition, China’s top securities regulator pledged to “strictly” combat market manipulators, emphasizing that protecting small investors was a “core task.” “We will further strengthen the protection of investors... to attract more investment, especially long-term funds to participate in this market,” Wu Qing, the newly-appointed chairman of the China Securities Regulatory Commission, told reporters. In corporate news, Jiangling Motors slid over -5% following the announcement of a 23.3% decrease in vehicle sales for February, alongside a 20.5% slump in output during the same month.
Japan’s Nikkei 225 Stock Index closed just below the flatline today. Losses in technology stocks led the overall market lower. Japan’s largest bank, Mitsubishi UFJ Financial Group Inc., anticipates that the Bank of Japan will abandon its negative interest rate policy in two weeks and is positioning itself accordingly. Meanwhile, Jiji Press reported on Wednesday that some Bank of Japan board members are expected to express the view that lifting negative interest rates is reasonable at a policy meeting this month. In other news, Reuters reported that the Bank of Japan is expected to downgrade its assessment of consumption and factory output this month, nodding to recent indicators of weakness in the economy that highlight the fragile state of its recovery. In corporate news, AIN Holdings Inc. surged over +15% after a regulatory filing showed on Wednesday that Hong Kong-based activist investor Oasis Management built a 9.6% stake in the pharmacy operator. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +2.40% to 20.87.
Pre-Market U.S. Stock Movers
CrowdStrike Holdings Inc (CRWD) surged about +24% in pre-market trading after the cybersecurity firm reported upbeat Q4 results and issued strong Q1 and FY25 guidance. The company also announced its acquisition of cybersecurity startup Flow Security.
Box Inc (BOX) gained over +2% in pre-market trading after the cloud content management company posted Q4 EPS that topped expectations and provided better-than-expected Q1 revenue guidance.
Vincerx Pharma Inc (VINC) climbed more than +12% in pre-market trading after revealing its plans to present three posters and share clinical data for VIP236 at the American Association for Cancer Research Annual Meeting 2024.
Nordstrom Inc (JWN) plunged over -9% in pre-market trading as weak 2024 guidance overshadowed stronger-than-expected Q4 results.
NVIDIA Corporation (NVDA) rose over +1% in pre-market trading after CICC initiated coverage of the stock with an Outperform rating and $870 price target.
ChargePoint Holdings Inc (CHPT) slumped more than -5% in pre-market trading after the company reported downbeat Q4 results and issued below-consensus Q1 revenue guidance.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Wednesday - March 6th
Brown Forman (BFb), Campbell Soup (CPB), Abercrombie&Fitch (ANF), Thor Industries (THO), Korn Ferry (KFY), Foot Locker (FL), Highpeak Energy Acquisition (HPK), Victoria’s Secret Co (VSCO), Vermilion Energy (VET), SGHC Limited (SGHC), Hamilton Insurance (HG), Genius Sports (GENI), Rev Group (REVG), Infinera (INFN), VSE Corporation (VSEC), Neogames (NGMS), Purecycle Technologies Holdings (PCT), Fortuna Silver (FSM), United Natural Foods (UNFI), SilverCrest Metals (SILV), Yext (YEXT), Otc Markets Group (OTCM), Trinity Capital (TRIN), Hudson (HDSN), Orthopediatrics (KIDS), Whitestone (WSR), Wave Life Sciences Ltd (WVE), Berry Petroleum (BRY), Miller Industries (MLR), Riley Exploration Permian (REPX), GeoPark Ltd (GPRK), Xeris Pharmaceuticals (XERS).
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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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