March Nasdaq 100 E-Mini futures (NQH25) are trending up +0.54% this morning as investors digested earnings reports from big U.S. tech companies.
Tesla (TSLA) gained over +2% in pre-market trading despite reporting weaker-than-expected Q4 results, as the EV maker revealed plans to begin robotaxi operations and projected a “return to growth in 2025.” Also, Meta Platforms (META) rose about +2% in pre-market trading after the social media and tech giant reported better-than-expected Q4 results and CEO Mark Zuckerberg said that 2025 would be a “really big year” for AI, though light Q1 revenue guidance capped gains. At the same time, Microsoft (MSFT) fell more than -3% in pre-market trading after the tech giant reported FQ2 Intelligent Cloud revenue that missed analyst expectations and said its cloud-computing business will continue to grow slowly in FQ3.
Investors now look ahead to fresh U.S. economic data, including the first estimate of fourth-quarter GDP and jobless claims figures, along with a slew of corporate earnings reports, with a particular focus on results from “Magnificent Seven” member Apple.
As widely expected, the Federal Reserve kept interest rates unchanged yesterday. The Federal Open Market Committee voted unanimously to maintain the federal funds rate in a range of 4.25%-4.50%, following a string of rate cuts last year. In a post-meeting statement, officials reiterated that inflation remains “somewhat elevated” but omitted a reference to its progress toward their 2% target. Later, Fed Chair Jerome Powell clarified that the reference to inflation was merely an effort to shorten the sentence, rather than convey any significant message.
At a press conference, Powell stated that officials are in no hurry to lower interest rates, adding that the central bank is pausing to observe further progress on inflation. “With our policy stance significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance,” he said.
In yesterday’s trading session, Wall Street’s major indexes closed lower. Packaging Corp. (PKG) fell over -9% and was the top percentage loser on the S&P 500 after the maker of cardboard boxes issued below-consensus Q1 EPS guidance. Also, Nvidia (NVDA) slid more than -4% and was the top percentage loser on the Dow and Nasdaq 100 after Bloomberg reported that Trump administration officials were exploring additional curbs on the company’s chip sales to China. In addition, Danaher (DHR) slumped over -9% after the life sciences firm posted weaker-than-expected Q4 adjusted EPS. On the bullish side, F5 Inc. (FFIV) climbed more than +11% and was the top percentage gainer on the S&P 500 after the company reported upbeat FQ1 results and provided a strong FQ2 revenue forecast.
Economic data released on Wednesday showed that preliminary U.S. wholesale inventories fell -0.5% m/m in December, stronger than expectations of +0.2% m/m.
Meanwhile, U.S. rate futures have priced in a 91.4% probability of no rate change and an 8.6% chance of a 25 basis point rate cut at the next central bank meeting in March.
Fourth-quarter corporate earnings season continues in full swing, with market participants awaiting reports today from notable companies such as Apple (AAPL), Visa (V), Mastercard (MA), Caterpillar (CAT), Comcast (CMCSA), United Parcel Service (UPS), Intel (INTC), KLA Corp. (KLAC), and Altria (MO). According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +7.5% increase in quarterly earnings for Q4 compared to the previous year.
On the economic data front, all eyes are on the Commerce Department’s first estimate of gross domestic product, set to be released in a couple of hours. Economists, on average, forecast that U.S. GDP growth will stand at +2.7% q/q in the fourth quarter, compared to the third-quarter figure of +3.1% q/q.
Investors will also focus on U.S. Initial Jobless Claims data. Economists estimate this figure will come in at 224K, compared to 223K last week.
U.S. Pending Home Sales data will be released today as well. Economists expect the December figure to remain unchanged m/m from the previous reading of +2.2% m/m.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.505%, down -1.10%.
The Euro Stoxx 50 Index is up +0.61% this morning as investors digested a slew of key earnings and economic data, with the focus now shifting to the monetary policy decision from the European Central Bank. Industrial and energy stocks led the gains on Thursday. Preliminary data from the National Statistics Institute released on Thursday showed that Spain’s annual inflation rate picked up pace in January, reaching its highest level since last June. Separately, Eurostat data showed that the Eurozone economy stagnated in the fourth quarter of 2024, raising concerns that a long-anticipated recovery could face further delays. Meanwhile, investors are awaiting the ECB’s policy verdict later in the session, with the central bank widely expected to lower its benchmark interest rate by a quarter-point as the Eurozone economy struggles to recover. The move will extend an aggressive easing cycle that saw four rate cuts in 2024. In corporate news, ABB Ltd (ABBN.Z.IX) rose over +3% after the Swiss engineering group posted a Q4 profit that slightly exceeded analyst expectations. At the same time, Deutsche Bank Ag (DBK.D.DX) slid more than -5% after the German lender reported a larger-than-expected drop in Q4 profit. Also, STMicroelectronics (STMPA.FP) slumped over -7% after the company projected a further decline in sales for the first quarter of 2025. In addition, H&M Hennes & Mauritz AB (HMB.S.DX) fell more than -2% after reporting weaker-than-expected Q4 sales.
Spain’s CPI (preliminary), Eurozone’s GDP (preliminary), Eurozone’s Consumer Confidence, and Eurozone’s Unemployment Rate were released today.
The Spanish January CPI came in at +0.2% m/m and +3.0% y/y, stronger than expectations of unchanged m/m and +2.9% y/y.
Eurozone GDP was unchanged q/q and grew +0.9% y/y in the fourth quarter, weaker than expectations of +0.1% q/q and +1.0% y/y.
Eurozone January Consumer Confidence arrived at -14.2, in line with expectations.
Eurozone December Unemployment Rate was 6.3%, in line with expectations.
Japan’s Nikkei 225 Stock Index (NIK) closed up +0.25%, while China’s financial markets were closed for a holiday.
Japan’s Nikkei 225 Stock Index reversed early losses and closed slightly higher today. Conglomerate stocks advanced on Thursday. Chip-related stocks also gained ground, with Advantest rising over +3% after the company lifted its full-year operating profit guidance by 37% amid robust demand for its testing equipment for chips utilized in artificial intelligence tasks. Meanwhile, Bank of Japan Deputy Governor Ryozo Himino said on Thursday that real interest rates should not remain negative once the economy overcomes its challenges. “I don’t think it’s normal for real interest rates to remain clearly negative if shocks and deflationary factors are resolved,” Himino said. The deputy governor reiterated that the central bank would consider further rate hikes if economic and price developments align with its projections. In other corporate news, SoftBank Group fell about -1% after Bloomberg reported that the company is in talks to invest up to $25 billion in OpenAI. Investors are now focused on Japan’s inflation, labor, and other economic data, set for release on Friday, to gain additional insights into the BOJ’s monetary policy outlook. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -4.24% to 21.00.
China’s Shanghai Composite Index was closed today for the Lunar New Year holiday. Mainland China’s financial markets will reopen on Wednesday, February 5th.
Pre-Market U.S. Stock Movers
Tesla (TSLA) gained over +2% in pre-market trading despite reporting weaker-than-expected Q4 results, as the EV maker revealed plans to begin robotaxi operations and projected a “return to growth in 2025.”
Meta Platforms (META) rose about +2% in pre-market trading after the social media and tech giant reported better-than-expected Q4 results, and CEO Mark Zuckerberg said that 2025 would be a “really big year” for AI, though light Q1 revenue guidance capped gains.
International Business Machines (IBM) climbed more than +7% in pre-market trading after the IT giant posted upbeat Q4 results and provided strong FY25 revenue growth guidance.
Microsoft (MSFT) fell more than -3% in pre-market trading after the tech giant reported FQ2 Intelligent Cloud revenue that missed analyst expectations and said its cloud-computing business will continue to grow slowly in FQ3.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - January 30th
Apple (AAPL), Visa (V), Mastercard (MA), Thermo Fisher Scientific (TMO), Caterpillar (CAT), Comcast (CMCSA), Blackstone (BX), United Parcel Service (UPS), Marsh McLennan (MMC), KLA Corp. (KLAC), Sherwin-Williams (SHW), Altria (MO), Parker-Hannifin (PH), Intel (INTC), Cigna (CI), Trane Technologies (TT), Arthur J Gallagher (AJG), Atlassian Corp Plc (TEAM), Northrop Grumman (NOC), Canadian National Railway (CNI), Roper Technologies (ROP), Valero Energy (VLO), Baker Hughes (BKR), L3Harris Technologies (LHX), ResMed (RMD), Deckers Outdoor (DECK), Hartford (HIG), Tractor Supply (TSCO), Cardinal Health (CAH), Dow (DOW), PPG Industries (PPG), Dover (DOV), LPL Financial (LPLA), PulteGroup (PHM), Weyerhaeuser (WY), Check Point Software (CHKP), International Paper (IP), Southwest Airlines (LUV), Quest Diagnostics (DGX), Dynatrace Inc (DT), Gen Digital (GEN), Avery Dennison (AVY), Rogers Communications (RCI), Brookfield Infrastructure Partners (BIP), Mobileye Global (MBLY), Eastman Chemical (EMN), Carpenter Technology (CRS), AO Smith (AOS), Appfolio Inc (APPF), Cullen/Frost Bankers (CFR), United States Steel (X), Sirius XM (SIRI), Credit Acceptance (CACC), Oshkosh (OSK), Kirby (KEX), CSW Industrials (CSWI), PennyMac Financial (PFSI), Asbury Automotive (ABG), Boot Barn Holdings (BOOT), Schneider National (SNDR), FirstCash (FCFS), SkyWest (SKYW), Brunswick (BC), Ameris (ABCB), Murphy Oil (MUR), Allegro (ALGM), CNX Resources (CNX), Flagstar Financial (FLG), Olin (OLN), Cavco (CVCO), Adtalem Education (ATGE), Bread Financial Holdings (BFH), Federated Investors B (FHI), ManpowerGroup (MAN), The Bancorp (TBBK), First Merchants (FRME), Standex (SXI), Viavi Solutions (VIAV), Hilltop (HTH), NetScout (NTCT), Coursera (COUR), Stellar Bancorp (STEL), S&T Bancorp (STBA), RPC (RES), Berkshire Hills Bancorp (BHLB), ScanSource (SCSC), PennyMac Mortgage (PMT).
