Five things you need to know before the market opens on Wednesday March 1:
1. -- Stocks Nudge Higher On Strong China Data After February Slump
U.S. equity futures edged higher Wednesday as investors reacted to data showing a solid rebound for China's post-pandemic economy while eyeing another moves in the Treasury bond market that could lift yields to a fresh multi-month peak.
China's National Bureau of Statistics said manufacturing activity in the world's second-largest economy powered to its fastest pace since 2012 last month as Covid restrictions were lifted and the workers and investors returned from the Lunar New Year holidays.
The stronger-than-expected rebound, which was echoed by a private PMI survey published by Caixin Global, lifted global commodity prices and triggered the strongest single-day gains for Asia stocks in at least seven weeks.
The impact of a sustained China recovery, however, remains a topic of hot debate among analysts, some of whom suggest it will stoke global inflation. Others, meanwhile, say the low-priced exports and freed-up supply chains will have the opposite affect.
That's placing U.S. stocks in a near-term dilemma heading into the start of March trading, as Treasury yields nudge higher amid renewed inflation concerns and stocks look to reflect the improving growth prospects emerging from China and Europe, where manufacturing output jumped to its strongest pace since May of last year over the month of February.
Benchmark 10-year Treasury note yields, which could prove to be a crucial guide for U.S. equity performance, were last seen trading 4 basis points higher in the overnight session at 3.955% while 2-year notes were within a whisker of their late November peak at 4.858%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.44% lower at 104.408.
Investors are also closely tracking moves inf the Fed Funds futures market, with the CME Group's FedWatch indicating a 26.2% chance of a 50 basis point rate hike next month in Washington, with the odds of a terminal rate in the region of 5.5% to 5.75% rising to 36.4% in July.
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500, while fell 2.61% last month to trim its year-to-date gain to around 3.14%, were indicating a 14 point opening bell gain ahead of manufacturing PMI data at 9:45 am Eastern time.
Futures linked to the Dow Jones Industrial Average were indicating an 80 point advance while the tech-heavy Nasdaq is looking at a more modest 70 point bump.
In overseas markets, Europe's Stoxx 600 was marked 0.1% higher in early Frankfurt trading while Britain's FTSE 100 gained 0.69% in London.
Overnight in Asia, the region-wide MSCI ex-Japan index jumped 1.99% into the close of trading following the impressive China PMI data while the Nikkei 225 ended 0.26% higher in Tokyo.
2. -- Novavax Plunges As Vaccine Maker Casts Doubt On Company's Future
Novavax (NVAX) shares plunged lower in pre-market trading after the vaccine maker posted a steep fourth quarter loss and warned investors that it may not be able to remain in business over the coming year.
Novavax, which received FDA authorization for its NVX-CoV2373 Covid vaccine in July of last year, pulled out of a contract with Gavi, the global vaccine alliance, earlier this year amid a long-running dispute over $700 million in payments for doses designated for lower income countries.
Novavax said it could be force to repay all or some of that cash, adding that a contract for vaccine sales to the U.S. government won't be extended beyond December of this year.
The Gaithersburg, Maryland-based group posted a fourth quarter loss of $182 million, or $2.28 per share, noting that "substantial doubt exists regarding our ability to continue as a going concern through one year from the date that these financial statements are issued."
Novavax shares were marked 23.11% lower in pre-market trading to indicate an opening bell price of $7.12 each, a move that would value the group -- which once traded with a market cap of nearly $20 billion -- at just $605 million. .
3. -- HP Shares Get Boost From Solid Profit Outlook, Cost-Cutting
HP Inc. (HPQ) shares moved higher in pre-market trading after the PC and peripherals maker posted better-than-expected first quarter earnings
For the three months ending in October, HP said revenues for the three months ending in December, the group's fiscal first quarter, fell 19% from last year to $13.8 billion, missing the Street consensus forecast of a $14.15 billion tally. Adjusted profits, however, topped analysts' estimates at 75 cents per share as cost cuts under its so-called "Future Ready" plan absorbed some of the slump in global computer equipment demand.
Looking into the current quarter, HP said it sees adjusted earnings in the region of 73 cents to 83 cents per share, against a Refinitiv forecast of 76 cents, and repeated its full-year profit forecast for free-cash flow generation of between $3 billion and $3.5 billion.
HP shares were marked 1.6% higher in pre-market trading to indicate an opening bell price of $30.00 each.
4. -- Lowe's Earnings On Deck After Muted Home Depot Spending Outlook
Lowe's Companies (LOW) shares slipped lower in pre-market trading ahead of the home improvement retailer's fourth quarter earnings prior to the opening bell.
Lowe's is expected to post an adjusted bottom line of $2.21 per share, a 24.1% improvement from last year, on revenues of around $22.7 billion.
Lowe's confirmed its full-year profit targets of earnings of between $13.65 to $13.80 per share and revenues in the region of $97 billion and $98 billion at an investor day event in December, and analysts are likely to focus on any changes to that outlook after its larger rival, Home Depot (HD), forecast a 'mid single digit' earnings decline, with flat comparable sales, after a disappointing earnings update last week.
"Over the last seven quarters, we have seen our transactions gradually normalize as consumer spending has shifted from goods to services," Home Depot CFO Richard McPhail said on an investor conference call. "We believe that if this shift continues at its current pace, the home improvement market would be down low single digits."
Lowe's shares were marked 0.85% lower in pre-market trading to indicate an opening bell price of $204.00 each.
5. -- Salesforce Earnings To Highlight Extent of Activist Pressure on CEO Benioff
Salesforce (CRM) shares nudged lower in pre-market trading ahead of the enterprise software group's fourth quarter earnings after the closing bell amid renewed interest from activist investors
Salesforce, which added ValueAct CEO Mason Morfit and Mastercard (MA) CFO Sachin Mehra to its board earlier this year as activists pushed for changes to its near-term strategy, is expected to post earnings of $1.3 per share on revenues of around $8 billion.
The larger focus, however, is likely to fall on the fate of CEO Marc Benioff, who was made stand-alone leader in January following the surprise departure of co-CEO Bret Taylor.
At least five activist investors, including Dan Loeb's Third Point Hedge fund, Elliott Management, ValueAct Capital, Starboard Value and Inclusive Capital Partners have reported stakes in the group in what Wedbush analyst Dan Ives has called a "perfect storm" for the outspoken Benioff.
Salesforce shares were marked 0.5% lower in pre-market trading to indicate an opening bell price of $162.84 each.
