Five things you need to know before the market opens on Wednesday March 29:
1. -- Stock Futures Higher As Bank Worries Ease, Tech Gets Boost
U.S. equity futures moved firmly higher Wednesday, while the dollar held steady against its global peers and Treasury bond yields slipped lower, as market sentiment found support from a stabilized banking sector and improved risk appetite.
A solid near-term outlook from clothing retailer Lululemon (LULU), indicative of ongoing consumer strength, added to the overnight mood as investors found solace in a lack of negative banking sector headlines. In fact, the return of former UBS CEO Sergoi Ermotti to oversee the bank's takeover of Credit Suisse gave European shares an early boost and suggests last week's events, which included a big Friday decline in shares of Deutsche Bank, have been neutralized.
The Conference Board's closely-tracked index of consumer confidence was also surprisingly firm this month, even as survey was conducted on March 20 - ten full days after the collapse of Silicon Valley Bank.
Tech socks also found support from yesterday's decision by China-based e-commerce giant Alibaba (BABAF) to spit into six separate business divisions, and potentially pursue individual IPOs.
That said, recession indicators are still flashing red, with the U.S. Treasury bond yield curve remaining notably inverted a 2-year notes were pegged at 4.019% in overnight trading and 10-year notes eased to 3.541%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.03% higher in overnight dealing at 102.460.
On Wall Street, stocks are set for a solid open ahead of weekly mortgage data from the Mortgage Bankers Association and pending home sales data at 10:00 am Eastern time.
Futures contracts tied to the S&P 500 indicate a 37 point opening bell gain while those linked to the Dow Jones Industrial Average suggest a 252 point move to the upside. Futures tied to the Nasdaq are indicating a 122 point advanced amid the pullback in Treasury bond yields.
Overnight in Asia, the region-wide MSCI ex-Japan index was marked 0.69% higher into the close of trading, while Japan's Nikkei 225 rose 1.3% in Tokyo to close at a three-week high of 27,883.78 points..
In Europe, the Stoxx 600 was marked 0.91% higher in early Frankfurt trading, with bank stocks again leading the broader market advance, while the FTSE 100 was marked 0.268% higher in London.
2. -- UBS Leaps As Former CEO Sergio Ermotti Returns to Oversee Credit Suisse Purchase
UBS Group UBS shares traded firmly higher in Zurich after longtime executive Sergio Ermotti was brought back to the bank as group CEO to oversee the takeover of investment banking rival Credit Suisse.
Ermotti, who lead UBS from 2012 until 2020 and is currently serving as the chairman of Swiss Re, will take over from current CEO Ralph Hamers on April 5. Hamers, a Dutch national who ran the investment banking giant ING, agreed to make way for the Swiss-born Ermotti "to serve the interests of the new combination, the Swiss financial sector and the country."
UBS, once the takeover of Credit Suisse is completed, will have around $1.6 trillion in assets, 120,00 employees and will be backed by nearly $170 in state guarantees.
"The task at hand is an urgent and challenging one," Ermotti said in a statement. "In order to do it in a sustainable and successful way, and in the interest of all stakeholders involved, we need to thoughtfully and systematically assess all options."
UBS shares were marked 1.9% higher in Zurich at 18.06 Swiss francs each, while their U.S.-listed shares gained 1.92% to indicate an opening bell price of $19.67 each.
3. -- Micron Jumps As AI Demand Forecast Helps Offset Near-Term Revenue Slump
Micron Technology (MU) shares moved higher in pre-market trading after the chipmaker posted a narrower-than-expected second quarter loss and indicated AI demand would support near-term revenue growth.
Micron said its adjusted loss for the three months ending in February was pegged at 57 cents per share, firmly inside the Street consensus forecast of 87 cents, with revenues falling 52.6% to $3.693 billion. Both figures were largely in-line with the group's preannouncement from March 2.
AI chip demand, however, is expected to be a "secular driver" of near-term growth for Micron, the company said, with current quarter sales likely to hold at around $3.7 billion, plus or minus $200 million, when compared to the second quarter, but that tally would still be down more than 60% from last year's levels.
“Customer inventories are getting better, and we expect gradual improvements to the industry’s supply-demand balance," said CEO Sanjay Mehrotra. "We remain confident in long-term demand and are investing prudently to preserve our technology and product portfolio competitiveness.”
Micron Technology shares were marked 2.4% higher in pre-market trading to indicate an opening bell price of $60.70 each.
4. -- JPMorgan CEO Jamie Dimon To Be Deposed In Jeffrey Epstein Lawsuit
JPMorgan (JPM) CEO Jamie Dimon will be interviewed, under oath, in connection with the bank's connections with convicted sex offender and financier Jeffrey Epstein, according to multiple media reports.
Dimon, who has lead the bank since 2005, will be deposed in a suit brought by an unnamed victim of Epstein's crimes, known only as Jane Doe, and the U.S Virgin Islands. A trial is slated for October 23 before Judge Jed Rakoff of the United States District Court for the Southern District of New York.
The Financial Times of London's report indicated that no direct contact has been established between Dimon and Epstein, nor were there indications that he was involved in discussions related to the disgraced financier.
Former JPMorgan executive Jess Staley, who also served as CEO of London-based Barclays, was deposed by lawyers for JPMorgan -- which is counter-suing Staley -- over his own ties to Epstein, who was a client of JPMorgan between 2000 and 2013. Epstein hung himself in a Manhattan prison cell in August of 2019 while facing a trial over sex trafficking charges.
JPMorgan shares were marked 0.64% higher in pre-market trading to indicate an opening bell price of $129.70 each.
5. -- Lululemon Soars After Q4 Earnings Beat, Solid 2023 Sales Forecast
Lululemon Athletic (LULU) shares soared higher in pre-market trading after the upscale clothing retailer posted stronger-than-expected fourth quarter earnings and issued a robust near-term profit outlook.
Lululemon said adjusted earnings for the three months ending in January were pegged at $4.40 per share, a 30.6% increase from the same period last year and well ahead of the Street consensus forecast of $4.26 per share. Group revenues, Lululemon said, were also up 30% at $2.8 billion, coming in just ahead of analysts' estimates.
Looking into the current fiscal year, Lululemon said it sees sales in the region of $9.3 billion to $9.4 billion, a 16% increase at the upper end of the range from last year, with earnings of between $11.50 and $11.72 per shares.
"We are pleased with our performance in the fourth quarter, which remained balanced across product category, channel, and regions," said CFO Meghan Frank. "Our ability to exceed our annual revenue target in a dynamic operating environment is a testament to the enduring strength of the lululemon brand."
Lululemon shares were marked 14.3% higher in pre-market trading to indicate an opening bell price of $366.10 each.
