Here are five things you must know for Thursday, February 10:
1. -- Stock Futures Flat With Inflation, Jobless Claims In Focus
U.S. equity futures traded mixed Thursday, while Treasury bond yields eased and oil crept back above the $90 per barrel mark, as investors sifted through a busy session of after-hours earnings and braced for today's key inflation reading prior to the start of trading.
A well-received auction of $37 billion in 10-year notes by the U.S. Treasury yesterday, which drew record demand for foreign investors and offered the highest yield -- 1.904% -- in nearly three years provided solid footing for the bond market in overnight trading ahead of today's inflation reading.
However, the narrowing gap between 2-year and 10-year note yields, which is now only 58.3 basis points, is starting to worry fund managers looking to extend risk into the second half of the year.
Oil prices are also a concern, with the Energy Department reporting the lowest levels of U.S. stockpiles since October 2018, a tally which, pared with record levels of overall product demand could bring global crude prices closer to the $100 mark by summer, a move which could choke off any hopes of a consumer lead advance for the U.S. economy.
Still, with stronger-than-expected earnings from Disney, Uber and Mattel last night, and solid gains for stocks in Europe and Asia, Wall Street could still extend its weekly winning streak if today's inflation reading offers few surprises.
Futures tied to the Dow Jones Industrial Average are indicating a modest 35 point opening bell gain while those linked to the S&P 500 are priced for a 4 point dip.
Nasdaq Composite futures are indicating a 25 point decline for the tech-focused benchmark as 10-year Treasury note yields hold at 1.935% in overnight trading.
2. -- White House Braced For Further Inflation Surge
The Bureau of Labor Statistics is expected to report that U.S. inflation rates sped to the fastest pace since the early 1980s last month, powered by ongoing increases in rents, airfares, food and housing.
Headline inflation is expected to come in at a rate of 7.2%, the fastest since 1982, with the core reading -- a tally that strips out volatile prices for things like food and energy -- rising to 5.8%.
Core prices, at least in part, will be the focus for both financial markets and the Federal Reserve, which has had to alter its projections for near-term inflation after conceding only late last year that consumer prices pressure aren't 'transitory'. and could persist until well into 2023 as a result of elevated energy costs and supply chain disruptions tied to the global pandemic.
In response, the Fed is planning at least four rate hikes this year -- with some on Wall Street betting on at least six -- to tamp down inflation while protecting the economy's post-pandemic momentum.
"We expect a high year-over-year inflation rate reading in tomorrow’s data, given what we know about the last year," said White House Press Secretary Jen Psaki during her regular media briefing Wednesday. "But looking at that reading ... leading outside forecasters continue to project that inflation is expected to decrease over the course and moderate over the course of this year."
3. -- Disney Shares Rocket After Crushing Street Streaming Ads Forecasts
Walt Disney (DIS) shares surged higher in pre-market trading after the media giant posted stronger-than-expected first quarter earnings, lead by impressive gains in subscriber growth for its streaming service.
Around 11.8 million subscribers were added to the Disney+ streaming service over the three months ending in December, the group's fiscal first quarter, a tally that smashed Street forecasts and dwarfed the 8.3 million additions hauled in by Netflix (NFLX).
The subscriber gains, as well as a stronger-than-expected overall revenue total of $21.8 billion and profits of $1.06 per share, highlighted a spectacular earnings report that included pre-pandemic levels of activity at its U.S. theme parks and robust outlook heading into the second half of the year.
"While streaming will still be a 'show-me story', the streaming positives and very strong parks outlook should refocus attention on the ultimate earnings power of Walt Disney," said Credit Suisse analyst Douglas Mitchelson. "Especially considering the breadth and strength of its content and brands, and given best-in-media positioning longer-term."
Disney shares were marked 7.7% higher in pre-market trading to indicate an opening bell price of $158.58 each, a move that would nudge the stock into positive territory for the past six months.
4. -- Uber Shares Surge After Q4 Profit, Ride Sharing Rebound
Uber Technologies (UBER) shares leapt higher in pre-market trading after the ride-sharing group posted stronger-than-expected fourth quarter earnings ahead of a key investor presentation later today in New York.
Uber eked out a small adjusted profit of $82 million for the three months ending in December, its second profitable quarter in a row, as revenues surged 83% from last year's pandemic trough to $5.8 billion. Delivery revenues, which includes Uber Eats, rose 78% to $2.42 billion.
CEO Dara Khosrowshahi, however, said uncertainly linked to the fading Omicron wave would continue to affect ride activity, but noted that "mobility is already starting to bounce back, with gross bookings up 25% month-on-month in the most recent week."
Uber shares were marked 6% higher in pre-market trading to indicate an opening bell price of $42.60 each, a move that would trim the stock's six-month decline to around 1%.
5. -- Mattel Shares Soar As Barbie Drive Q4 Earnings Beat
Mattel (MAT) share soared higher in pre-market trading after the toymaker blasted Street forecasts with its fourth quarter earnings and said demand would likely remain firm throughout the coming year.
Mattel said adjusted earnings for the three months ending in December rose to 53 cents per share, well ahead of the 30 cents per share forecast, as revenues jumped 10% to $1.8 billion, thanks to pandemic-linked demand for toys and games from work-from-home parents.
Looking into the coming year, Mattel said net sales should rise between 8% and 10%, with earnings in the region of $1.42 to $1.48 per share.
"2021 was another great year for the toy industry in spite of major global supply chain disruptions and significant retail closures," CEO Ynon Kreiz told investors on a conference call late Wednesday. "The industry is expected to continue to grow as children, parents and caregivers have made toys and play a bigger part of their lives."
Mattel shares were marked 10.8% higher in pre-market trading to indicate a opening bell price of $25.30 each.
