March S&P 500 E-Mini futures (ESH25) are trending down -0.21% this morning, taking a breather after the benchmark index scaled a fresh peak, while investors geared up for U.S. business activity data.
In yesterday’s trading session, Wall Street’s major indexes closed in the green, with the benchmark S&P 500 notching a new all-time high and the blue-chip Dow posting a 6-week high. GE Aerospace (GE) climbed over +6% after the maker of jet engines posted upbeat Q4 results, issued solid FY25 adjusted EPS guidance, and announced a $7 billion stock buyback plan. Also, Union Pacific (UNP) advanced more than +5% after the railroad operator reported better-than-expected Q4 EPS. In addition, Netflix (NFLX) gained over +3% after Wolfe Research upgraded the stock to Outperform from Peer Perform with a price target of $1,100. On the bearish side, Electronic Arts (EA) tumbled more than -16% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the company reported weaker-than-expected preliminary FQ3 results and cut its full-year net bookings guidance. Also, chip stocks lost ground, with Arm Holdings (ARM) slumping over -7% and Micron Technology (MU) sliding more than -4%.
The Labor Department’s report on Thursday showed that the number of Americans filing for initial jobless claims in the past week rose +6K to a 6-week high of 223K, compared with the 221K expected.
“Jobless claims may have surprised slightly to the upside, but they were well within the modest range established in recent months,” said Chris Larkin at E*Trade from Morgan Stanley. “Employment continues to highlight US economic outperformance.”
At the World Economic Forum in Davos, Switzerland, U.S. President Donald Trump called on OPEC to reduce crude prices and said he would push for interest rate cuts. Trump stated he would demand an immediate reduction in rates, which he claimed had increased deficits and led to what he described as economic calamity under the Biden administration.
Meanwhile, U.S. rate futures have priced in a 99.5% chance of no rate change at next week’s monetary policy meeting.
On the earnings front, notable companies like American Express (AXP), Verizon (VZ), NextEra Energy (NEE), and HCA Healthcare (HCA) are slated to release their quarterly results today. 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.
Today, all eyes are focused on the U.S. S&P Global Manufacturing PMI preliminary reading, which is set to be released in a couple of hours. Economists, on average, forecast that the January Manufacturing PMI will come in at 49.8, compared to last month’s value of 49.4.
Also, investors will focus on the U.S. S&P Global Services PMI, which stood at 56.8 in December. Economists expect the preliminary January figure to be 56.4.
U.S. Existing Home Sales data will be reported today. Economists foresee this figure to stand at 4.19M in December, compared to the previous number of 4.15M.
The University of Michigan’s U.S. Consumer Sentiment Index will be released today as well. Economists estimate this figure to arrive at 73.3 in January, compared to 74.0 in December.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.635%, down -0.04%.
The Euro Stoxx 50 Index is up +0.67% this morning, on track for a strong weekly gain, as investors digested more corporate earnings as well as flash PMI data from the region. Luxury and mining stocks led the gains on Friday. A survey released on Friday showed that Eurozone business started the new year with modest growth, as steady services activity in January was accompanied by an easing of the prolonged manufacturing downturn. Meanwhile, investors found relief after U.S. President Trump eased his stance on tariffs, stating that he would prefer not to use tariffs against China. Also, Trump, in his video address to the World Economic Forum in Davos on Thursday, advocated for an immediate cut in interest rates and urged other countries to do the same. The European Central Bank meets next week and is widely expected to reduce its policy interest rate by 25 basis points, marking the first of what is anticipated to be at least four cuts this year. In corporate news, Burberry Group Plc (BRBY.LN) surged over +12% after the maker of upmarket trench coats reported a smaller-than-expected drop in quarterly comparable sales. At the same time, Telefonaktiebolaget Lm Ericsson (ERICB.S.DX) slumped more than -8% after reporting weaker-than-expected Q4 profit.
Eurozone’s Manufacturing PMI (preliminary) and Eurozone’s Services PMI (preliminary) data were released today.
Eurozone January Manufacturing PMI stood at 46.1, stronger than expectations of 45.6.
Eurozone January Services PMI came in at 51.4, in line with expectations.
Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.70%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.07%.
China’s Shanghai Composite Index closed higher today as U.S. President Donald Trump’s latest comments on tariffs boosted sentiment. Technology stocks outperformed on Friday. Still, the benchmark index notched a modest weekly loss. Trump said in an interview with Fox News aired on Thursday that “it was a good, friendly conversation” with Xi and that he would rather not have to use tariffs against China. Sentiment also improved after Chinese regulators told state-owned insurers and mutual funds on Thursday to increase their equity holdings. Hwabao Securities estimates that the plan could inject approximately 1 trillion yuan ($137.88 billion) in new capital into Chinese stocks each year. Meanwhile, the People’s Bank of China provided 200 billion yuan ($27.46 billion) in one-year medium-term lending facility loans to some financial institutions at an unchanged rate of 2.00% on Friday, indicating it may keep benchmark rates steady for longer. In corporate news, Aluminum Corporation of China gained over +3% after projecting an increase in attributable profit of up to 94% for 2024.
Japan’s Nikkei 225 Stock Index closed slightly lower today as the yen strengthened following the Bank of Japan’s interest rate decision. Electronics and automobile stocks led the declines on Friday. Despite Friday’s drop, the benchmark index notched a weekly gain. The Bank of Japan raised interest rates on Friday to their highest level since October 2008, as the economy steadily advances toward the central bank’s goal of stable 2% inflation and wage-driven growth. As widely expected, BOJ Governor Ueda and his fellow board members raised the overnight call rate by a quarter-percentage point to 0.5% at the conclusion of a two-day meeting. The central bank also projected that inflation would hit its 2% target in the latter half of its forecast period, indicating the potential for additional rate hikes. BOJ Gov. Ueda, at a press conference, reiterated his commitment to pursue further interest rate hikes but stated he has no predetermined views on the pace and timing of such moves. “We will make appropriate policy decisions while constantly updating our economic and price outlook, as well as the likelihood of the outlook being realized, based on data available at each meeting,” he said. Meanwhile, government data released on Friday showed that Japan’s annual core inflation rate picked up to a 16-month high in December, underpinning the rationale behind the BOJ’s decision. Separately, preliminary business surveys showed that Japan’s factory activity fell to the lowest level in 10 months due to sluggish demand, while the service sector continued to expand in January. In corporate news, Mitsubishi Motors dropped more than -6% after Yomiuri and other media outlets reported that the company was considering not joining the Nissan-Honda merger. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -3.15% to 19.99.
The Japanese December National Core CPI has been reported at +3.0% y/y, in line with expectations.
The Japanese January au Jibun Bank Japan Manufacturing PMI (preliminary) came in at 48.8, weaker than expectations of 49.7.
Pre-Market U.S. Stock Movers
Boeing (BA) fell over -1% in pre-market trading after the aviation giant reported weaker-than-expected preliminary Q4 results.
Texas Instruments (TXN) slid more than -4% in pre-market trading after the analog chipmaker provided lackluster Q1 guidance.
CSX Corp. (CSX) dropped over -2% in pre-market trading after reporting weaker-than-expected Q4 revenue.
Intuitive Surgical (ISRG) slumped more than -2% in pre-market trading after the company’s full-year guidance disappointed investors.
Twilio (TWLO) surged over +16% in pre-market trading after announcing that it achieved positive operating income on a GAAP basis for Q4 for the first time.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Friday - January 24th
American Express (AXP), Verizon (VZ), NextEra Energy (NEE), HCA Healthcare (HCA), First Citizens BancShares (FCNCA), Moog (MOGa), Lakeland Financial (LKFN), Northwest Bancshares (NWBI), South Plains Financial (SPFI).
