March S&P 500 E-Mini futures (ESH24) are trending up +0.35% this morning as market participants geared up for crucial U.S. PPI and retail sales data while also awaiting quarterly results from software giant Adobe.
In Wednesday’s trading session, Wall Street’s major indices ended mixed. Dollar Tree (DLTR) plunged over -14% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the discount retailer reported downbeat Q4 results, provided weak Q1 and FY24 guidance, and announced plans to close about 600 Family Dollar stores in the first half of this year. Also, Tesla Inc (TSLA) slumped more than -4% after Wells Fargo downgraded the stock to Underweight from Equal Weight with a price target of $125. In addition, Intel Corporation (INTC) fell over -4% and was the top percentage loser on the Dow after Bloomberg reported that the Pentagon pulled out of a plan to give the company a chip grant of as much as $2.5 billion. On the bullish side, Beauty Health Co (SKIN) climbed more than +18% after the company reported upbeat Q4 results.
U.S. Treasury Secretary Janet Yellen said Wednesday she expects that the cost of rental housing, which stands as the largest contributor to inflation, will decrease this year as new leases are signed. “It takes a while for that to filter into the CPI. And so I have every expectation that the single largest contributor to inflation is going to be moving down over this year,” Yellen said in an interview with Fox Business.
Meanwhile, U.S. rate futures have priced in a 1.0% chance of a 25 basis point rate cut at the upcoming monetary policy meeting and a 6.9% probability of a 25 basis point rate cut at the May FOMC meeting. Also, U.S. rate futures have priced in a 64.1% chance of a 25 basis point rate cut at the conclusion of the Fed’s June meeting.
On the earnings front, notable companies like Adobe (ADBE), Dollar General (DG), Ulta Beauty (ULTA), and Dick’s Sporting Goods (DKS) are set to report their quarterly earnings today.
On the economic data front, all eyes are focused on the U.S. Producer Price Index in a couple of hours. Economists, on average, forecast that the U.S. February PPI will stand at +0.3% m/m and +1.1% y/y, compared to the previous values of +0.3% m/m and +0.9% y/y.
Also, investors are likely to focus on U.S. Retail Sales data, which came in at -0.8% m/m in January. Economists foresee the February figure to be +0.8% m/m.
The U.S. Core PPI will come in today. Economists expect February’s figures to be +0.2% m/m and +1.9% y/y, compared to the previous numbers of +0.5% m/m and +2.0% y/y.
U.S. Core Retail Sales data will also be closely watched today. Economists foresee this figure to stand at +0.5% m/m in February, compared to the previous figure of -0.6% m/m.
U.S. Initial Jobless Claims data will be reported today as well. Economists estimate this figure to be 218K, compared to last week’s value of 217K.
In the bond markets, United States 10-year rates are at 4.205%, up +0.31%.
The Euro Stoxx 50 futures are up +0.34% this morning as investors digested the latest dovish remarks from a European Central Bank policymaker and looked ahead to another key U.S. inflation reading. Household goods stocks outperformed on Thursday. The National Statistics Insititute said Thursday that Spain’s annual inflation rate decreased to 2.8% in February from 3.4% in January, confirming preliminary data. Meanwhile, ECB Governing Council member Yannis Stournaras stated on Thursday that the central bank must reduce borrowing costs twice before its August summer break and two additional times before the year’s end. In corporate news, Encavis Ag (ECV.D.DX) surged about +26% after accepting a 2.8 billion euros ($3.1 billion) offer from private equity firm KKR & Co. Also, K+S Ag (SDF.D.DX) climbed over +5% after the salt and potash miner reported better-than-expected full-year results and offered an upbeat outlook.
Spain’s CPI data was released today.
The Spanish February CPI stood at +0.4% m/m and +2.8% y/y, compared to expectations of +0.3% m/m and +2.8% y/y.
Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.18% and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.29%.
China’s Shanghai Composite Index closed slightly lower today. Gaming and semiconductor stocks underperformed on Thursday. At the same time, healthcare stocks advanced amid hopes for government support for the sector, with Beigene Ltd. surging about +8% and Jiangsu Hengrui Pharmaceuticals Co. Ltd. climbing more than +5%. The rally came following the circulation of a draft proposal on drug innovation, allegedly issued by the state planner National Development and Reform Commission, online and on social media after the market closed on Wednesday. Meanwhile, state-backed research house Antaike said in a post on its official WeChat account Thursday that major Chinese copper smelters agreed to lower operational rates, adjust maintenance plans, and postpone new projects. In other news, China pledged central government funds to encourage consumers and businesses to upgrade old equipment and goods. The action plan aims to boost expenditure on equipment across sectors, including industry, agriculture, transport, education, and healthcare, by at least 25% by 2027 compared to last year, the State Council said in a statement on Wednesday.
Japan’s Nikkei 225 Stock Index erased early losses to end higher today. Utilities, energy, and real estate stocks led the gains on Thursday. Reuters reported Thursday that the Bank of Japan will debate ending its negative interest rate policy next week should strong results emerge from Friday’s preliminary survey on big firms’ wage talks. Meanwhile, Japan’s largest industrial union, UA Zensen, said on Thursday that the average pay rise proposed by 231 companies for full-time and part-time employees was the largest since 2013. The UA Zensen concluded labor talks on Wednesday, announcing a weighted average 5.9% wage increase for full-time workers and a 6.5% hike for part-timers this year. Japanese government bond yields climbed on Thursday amid growing expectations for the Bank of Japan to start exiting stimulus as early as next week, while lackluster demand in a 20-year securities auction further fueled selling pressure. In corporate news, Nissan Motor Co Ltd. gained over +2% following a report by local television network TV Tokyo suggesting that the automaker is exploring a potential business partnership with Honda Motor, while the Nikkei Business Daily said they could collaborate on electric vehicles. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -3.70% to 20.57.
Pre-Market U.S. Stock Movers
SentinelOne Inc (S) plunged over -11% in pre-market trading after the cybersecurity firm provided weaker-than-expected FY25 guidance.
UiPath Inc (PATH) rose more than +5% in pre-market trading after the automation software company reported better-than-expected Q4 results and issued above-consensus FY25 revenue guidance.
Fisker Inc (FSR) plummeted over -44% in pre-market trading following a report from the Wall Street Journal indicating that the company hired restructuring advisers to assist with a potential bankruptcy filing.
Spruce Biosciences Inc (SPRB) tumbled about -74% in pre-market trading after announcing plans to reduce its workforce by 21% following a failed Phase 2 study for its drug candidate, tildacerfont.
Robinhood Markets Inc (HOOD) climbed more than +11% in pre-market trading after reporting that trading volumes across all asset classes on its platform increased in February compared to January 2024. Also, Bernstein initiated coverage of the stock with an Outperform rating and a $30 price target.
Citigroup Inc (C) gained about +2% in pre-market trading after Goldman Sachs upgraded the stock to Buy from Neutral with a $68 price target.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - March 14th
Adobe (ADBE), Dollar General (DG), Ulta Beauty (ULTA), Wheaton Precious Metals (WPM), Ke Hldg (BEKE), Dick’s Sporting Goods (DKS), Futu (FUTU), Pharming Group (PHAR), Smartsheet (SMAR), Burford (BUR), Weibo Corp (WB), Getty Images Holdings (GETY), Pagerduty (PD), EverCommerce (EVCM), Nuscale Power (SMR), Hello Group (MOMO), G-III Apparel (GIII), Phreesia (PHR), Altus Power (AMPS), Allogene Therapeutics (ALLO), Montauk Renewables (MNTK), Despegar.com (DESP), Cion Investment (CION), Karat Packaging (KRT), UroGen Pharma (URGN), Secureworks (SCWX), Aveanna Healthcare Holdings (AVAH).
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