Stock Index Futures Tick Higher Ahead of U.S. Economic Data, Fed Meeting Awaited

March S&P 500 E-Mini futures (ESH24) are up +0.20%, and March Nasdaq 100 E-Mini futures (NQH24) are up +0.14% this morning as investors looked ahead to a new round of U.S. economic data and geared up for a Federal Reserve meeting next week.

In Thursday’s trading session, Wall Street’s major indexes closed in the red. Lennar Corporation (LEN) slid over -7% and was the top percentage loser on the S&P 500 after the homebuilder reported weaker-than-expected Q1 revenue and provided below-consensus Q2 gross margin guidance. Also, chip stocks retreated, with ON Semiconductor (ON) and NVIDIA Corporation (NVDA) falling more than -3%. In addition, Fisker Inc (FSR) tumbled over -51% following a report from the Wall Street Journal indicating that the company hired restructuring advisers to assist with a potential bankruptcy filing. On the bullish side, Dick’s Sporting Goods Inc (DKS) surged more than +15% after the sporting equipment and apparel retailer reported upbeat Q4 results and raised its dividend by 10%.

Economic data on Thursday showed the U.S. February producer price index came in at +0.6% m/m and +1.6% y/y, stronger than expectations of +0.3% m/m and +1.1% y/y. Also, the U.S. core PPI, which excludes food and energy, rose +2.0% y/y in February, compared with the +1.9% y/y consensus and +2.0% y/y prior. In addition, the number of Americans filing for initial jobless claims in the past week fell -1K to 209K, stronger than expectations of 218K. At the same time, U.S. retail sales rose +0.6% m/m in February, lower than the expected increase of +0.8% m/m. Also, U.S. February core retail sales advanced +0.3% m/m, weaker than expectations of +0.5% m/m. 

“Well, this is a pickle. On the heels of a second steamy CPI, and just a week before the Fed meeting, the February PPI rises at twice the expected pace. Retail sales were ‘meh’ at best, if not downright weak,” said Chris Low at FHN Financial. 

The Federal Reserve is anticipated to keep rates unchanged at the March 19th-20th meeting for the fifth consecutive gathering, with the primary attention directed towards the central bank’s new “dot plot.”

Meanwhile, U.S. rate futures have priced in a 7.6% probability of a 25 basis point rate cut at May’s monetary policy meeting and a 54.7% chance of a 25 basis point rate cut at June’s policy meeting.

Today, all eyes are focused on the U.S. Michigan Consumer Sentiment preliminary reading in a couple of hours. Economists, on average, forecast that the Michigan consumer sentiment index will stand at 77.1 in March, compared to the previous value of 76.9.

Also, investors will likely focus on the U.S. NY Empire State manufacturing index, which stood at -2.40 in February. Economists foresee the March figure to be -7.00.

U.S. Industrial Production data will be reported today. Economists foresee this figure to stand at 0.0% m/m in February, compared to the previous number of -0.1% m/m.

U.S. Manufacturing Production data will come in today. Economists expect February’s figure to be +0.3% m/m, compared to the previous value of -0.5% m/m.

U.S. Export and Import Price Indexes for February will be reported today as well. Economists anticipate the export price index to be at +0.2% m/m and the import price index to stand at +0.3% m/m.

In the bond markets, United States 10-year rates are at 4.283%, down -0.35%.

The Euro Stoxx 50 futures are up +0.10% this morning, on track for an eighth week of gains. Telecom and utilities stocks gained ground on Friday, while real estate and consumer-products stocks underperformed. Final data from statistics agency Insee showed on Friday that French annual inflation slowed less than expected in February. Separately, Italy’s statistical office Istat said Friday that the country’s annual inflation held steady at 0.8% in February, confirming preliminary data. In corporate news, Vonovia Se (VNA.D.DX) plunged over -6% after Germany’s largest landlord posted its biggest-ever full-year loss. At the same time, Vodafone Group Plc (VOD.LN) gained more than +3% after the company agreed to sell its Italian business to Swisscom for 8 billion euros ($8.7 billion) in cash and announced it would buy back 4 billion euros in stock.

France’s CPI and Italy’s CPI data were released today.

The French February CPI arrived at +0.8% m/m and +3.0% y/y, compared to expectations of +0.8% m/m and +2.9% y/y.

The Italian February CPI came in at +0.1% m/m and +0.8% y/y, in line with expectations.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.54%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.26%.

China’s Shanghai Composite Index closed higher today, extending its winning streak to a fifth week. Gains in automobile and tech hardware stocks led the overall market higher. The People’s Bank of China left the rate on its one-year policy loans unchanged at 2.5% on Friday while withdrawing 94 billion yuan ($13 billion) of cash from the banking system on a net basis to avoid excessive liquidity. Meanwhile, home prices in China declined at a slower pace for both new and existing units in January, the first signs of improvement in 10 months. Figures from the National Bureau of Statistics released on Friday showed that new-home prices in 70 cities, excluding state-subsidized housing, fell by 0.37% in January compared to December, when they decreased by 0.45%. Also, the second-hand market exhibited signs of improvement, with price declines narrowing to 0.68%. Separately, official data released on Friday indicated that Chinese banks and other financial institutions issued a smaller amount of credit in the first two months of the year compared to the previous year. In other news, the China Securities Regulatory Commission vowed to bolster its supervision of the capital market and companies’ IPO processes to protect investors. In corporate news, Tianjin Troila Technology Development plunged about -10% following the China Securities Regulatory Commission’s investigation into potential disclosure breaches by the company.

Japan’s Nikkei 225 Stock Index closed lower today, notching its biggest weekly drop since early December. Losses in heavyweight technology stocks led the overall market lower. Meanwhile, the largest labor union group in the country announced significant wage increases that could signal the end of the world’s last negative interest rate policy as early as next week. Members of Japan’s largest union group have so far secured average annual deals of 5.28%, the highest in 30 years. In other news, Japan’s Finance Minister Shunichi Suzuki stated on Friday that the country’s economy is no longer in deflation, with a strong trend of wage increases underway. Investor attention is currently centered on a Bank of Japan meeting next week. In corporate news, Good Com Asset fell over -5% after the company swung to an attributable loss in Q1 despite a 5% year-over-year improvement in net sales. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -1.17% to 20.33.

The Japanese January Tertiary Industry Activity Index stood at 0.30, stronger than expectations of 0.10.

Pre-Market U.S. Stock Movers

Geron Corporation (GERN) spiked about +88% in pre-market trading following a favorable vote by a group of independent experts at the FDA regarding the company’s marketing application for its blood cancer therapy, imetelstat.

Adobe Systems Incorporated (ADBE) plunged over -11% in pre-market trading after the Photoshop maker provided weaker-than-expected Q2 revenue guidance. 

Ulta Beauty Inc (ULTA) slumped more than -6% in pre-market trading after the beauty retailer reported weaker-than-expected Q4 comparable sales and issued conservative FY24 EPS guidance.

Rivian Automotive Inc (RIVN) gained over +3% in pre-market trading after Piper Sandler upgraded the stock to Overweight from Neutral with a $21 price target.

Madrigal Pharmaceuticals Inc (MDGL) soared more than +28% in pre-market trading after the company announced that the U.S. Food and Drug Administration had granted accelerated approval for its lead asset, resmetirom.

DoorDash Inc (DASH) rose over +1% in pre-market trading after Piper Sandler upgraded the stock to Neutral from Underweight with a price target of $127.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - March 15th

Jabil Circuit (JBL), Buckle (BKE), GigaCloud Technology (GCT), Soho House (SHCO), Ehang (EH), Hibbett Sports (HIBB), Groupon (GRPN).

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