March S&P 500 E-Mini futures (ESH25) are up +0.80%, and March Nasdaq 100 E-Mini futures (NQH25) are up +1.01% this morning as optimism over the likely aversion of a U.S. government shutdown boosted sentiment.
A day after stating that Republicans lacked the votes to pass a spending bill to keep the federal government funded through September, Senate Minority Leader Chuck Schumer said Thursday evening that he will support the bill, clearing the path for its passage. “I believe it is my job to make the best choice for the country to minimize the harms to the American people. Therefore, I will vote to keep the government open and not shut it down,” Schumer said on the Senate floor. Avoiding the government shutdown eliminates a source of uncertainty for investors, who are already on edge over U.S. economic growth amid President Donald Trump’s tariff war.
In yesterday’s trading session, Wall Street’s major indices closed sharply lower. Adobe (ADBE) plunged over -13% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the software giant issued downbeat FQ2 guidance. Also, the Magnificent Seven stocks retreated, with Meta Platforms (META) sliding more than -4% and Apple (AAPL) falling over -3%. In addition, UiPath (PATH) slumped more than -15% after the software company gave disappointing full-year revenue guidance. On the bullish side, Intel (INTC) surged over +14% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after naming Lip-Bu Tan, the former chief executive of Cadence Design Systems, as its new CEO.
Economic data released on Thursday showed that the U.S. producer price index for final demand was unchanged m/m and rose +3.2% y/y in February, weaker than expectations of +0.3% m/m and +3.3% y/y. Also, the core PPI, which excludes volatile food and energy costs, came in at -0.1% m/m and +3.4% y/y in February, weaker than expectations of +0.3% m/m and +3.6% y/y. In addition, the number of Americans filing for initial jobless claims in the past week unexpectedly fell -2K to 220K, compared with the 226K expected.
“Thursday’s inflation data is backward-looking, and the real worry is the inflationary effects that may come from tariffs, which is a wild card for markets and the Federal Reserve,” said Paul Stanley at Granite Bay Wealth Management.
Meanwhile, U.S. rate futures have priced in a 97.0% chance of no rate change and a 3.0% chance of a 25 basis point rate cut at next week’s FOMC meeting.
Today, investors will focus on the University of Michigan’s U.S. Consumer Sentiment Index, which is set to be released in a couple of hours. The reading is expected to show a further drop in consumer sentiment amid tariff uncertainty and public-sector job cuts. Economists, on average, forecast that the preliminary March figure will stand at 63.1, compared to 64.7 in February. Also, investors and Fed officials will closely monitor the survey’s inflation expectations metrics.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.296%, up +0.47%.
The Euro Stoxx 50 Index is up +0.75% this morning, partially rebounding from recent losses. Food & beverage and mining stocks led the gains on Friday. However, the benchmark index is on track to end the week lower amid escalating global trade tensions. On Thursday, U.S. President Donald Trump threatened to impose a 200% tariff on European wine, champagne, and other alcoholic beverages if Brussels proceeds with a tax on U.S. whiskey exports. Meanwhile, data from the Office for National Statistics released on Friday showed that the U.K. economy unexpectedly contracted in January, posing a fresh challenge to a relatively new government. Separately, final data from the Federal Statistical Office confirmed that Germany’s annual inflation rate stood at 2.3% in February, unchanged from the previous month. Investors are also monitoring developments regarding a potential ceasefire in Ukraine. Russian President Vladimir Putin said he wants to discuss a proposed ceasefire with President Trump, though he cautioned that any truce should pave the way for a lasting resolution to the war. In corporate news, Kering SA (KER.FP) tumbled over -12% as investors were unimpressed with its selection of a designer to lead Gucci’s makeover.
U.K.’s GDP, Germany’s CPI, France’s CPI, and Spain’s CPI data were released today.
U.K. January GDP has been reported at -0.1% m/m and +1.0% y/y, weaker than expectations of +0.1% m/m and +1.2% y/y.
The German February CPI stood at +0.4% m/m and +2.3% y/y, in line with expectations.
The French February CPI arrived at 0.0% m/m and +0.8% y/y, compared to expectations of +0.2% m/m and +0.8% y/y.
The Spanish February CPI came in at +0.4% m/m and +3.0% y/y, in line with expectations.
Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +1.81%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.72%.
China’s Shanghai Composite Index closed higher today, notching its highest close this year amid renewed optimism about more policy support to stimulate consumption. Consumer stocks led the gains on Friday. Bank stocks also advanced as investors positioned for a potential cut in the banks’ reserve requirement ratio, which would release additional funds for lending. In addition, stocks linked to childbirth soared after local governments introduced a childcare subsidy. The benchmark index ended the week higher. Market sentiment was buoyed by expectations that key Chinese policymakers might unveil measures to boost consumption at a press conference on Monday. The press conference will include representatives from the National Development and Reform Commission, the Ministry of Finance, the Ministry of Human Resources and Social Security, the Ministry of Commerce, the People’s Bank of China, and the state market regulators. Meanwhile, China’s financial regulator called on institutions to enhance support for consumption, pledging in a statement on Friday to ease consumer credit quotas and loan terms. Investor focus is also on a slew of January and February economic data from China, scheduled for release on Monday. In corporate news, Baidu rose over +2% in Hong Kong after Reuters reported that Tesla is working with the Chinese tech giant to improve the performance of its advanced driving assistance system in China.
Japan’s Nikkei 225 Stock Index reversed earlier losses and closed higher today, supported by gains in U.S. stock futures, as investors scooped up beaten-down stocks. Also, demand from institutional investors, such as pension funds, seeking to purchase stocks for portfolio rebalancing at the end of Japan’s fiscal year supported domestic equities. Electronics and machinery stocks outperformed on Friday. The benchmark index notched a modest weekly gain, snapping three straight weeks of losses. Still, investor sentiment remained fragile as global trade tensions continued to escalate. Meanwhile, yields on shorter-dated Japanese government bonds dropped on Friday, tracking overnight declines in U.S. Treasury yields, while longer-dated bond yields climbed due to weak demand at the fiscal year-end. Investors are now awaiting next week’s Bank of Japan policy meeting. The BOJ is expected to hold rates steady, though the board might consider a hike as early as May, depending on domestic inflation and market volatility driven by U.S. trade policy uncertainties, according to sources cited by Reuters. In other news, preliminary data from the Japanese Trade Union Confederation, known as Rengo, showed that 760 member unions plan to increase wages by an average of 5.46% this year, reinforcing expectations that the BOJ will continue raising interest rates. In corporate news, Canon Inc. rose over +2% after the camera maker announced plans to repurchase up to 2.8% of its shares. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -7.95% to 24.77.
Pre-Market U.S. Stock Movers
DocuSign (DOCU) surged over +10% in pre-market trading after the electronic signature software company posted upbeat Q4 results and gave a strong full-year billings forecast.
Ulta Beauty (ULTA) climbed more than +6% in pre-market trading after the company reported better-than-expected Q4 results.
Peloton Interactive (PTON) gained over +8% in pre-market trading after Canaccord upgraded the stock to Buy from Hold with a price target of $10.
Applied Optoelectronics (AAOI) spiked about +51% in pre-market trading after inking a deal with Amazon.com, under which the tech giant can buy about 8 million shares of the company’s common stock.
Rubrik (RBRK) soared more than +17% in pre-market trading after the cybersecurity company posted a narrower-than-expected Q4 loss.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Friday - March 14th
RLX Technology (RLX), Buckle (BKE), TWFG (TWFG), Gogo Inc (GOGO), Emerald Expositions (EEX), Bit Digital (BTBT), Airsculpt Technologies (AIRS), American Vanguard (AVD), Tuniu Corp (TOUR).
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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