June S&P 500 E-Mini futures (ESM24) are up +0.35%, and June Nasdaq 100 E-Mini futures (NQM24) are up +0.50% this morning as investors geared up for a new round of U.S. economic data.
In yesterday’s trading session, Wall Street’s major indices closed in the red. Take-Two Interactive Software (TTWO) slid over -4% and was the top percentage loser on the S&P 500 and Nasdaq 100 after a gaming site, Kotaku, reported that the company’s production on Grand Theft Auto VI had started to fall behind and could miss its 2025 release window. Also, United Airlines Holdings (UAL) dropped more than -3% after the U.S. Federal Aviation Administration decided to increase its oversight of the company following a series of recent safety incidents. In addition, McDonald’s Corporation (MCD) fell over -1% after Argus Research downgraded the stock to Hold from Buy. On the bullish side, Walt Disney Company (DIS) advanced about +3% and was the top percentage gainer on the Dow after Barclays upgraded the stock to Overweight from Equal Weight with a price target of $135.
Economic data on Monday showed that U.S. new home sales unexpectedly fell -0.3% m/m to 662K in February, weaker than expectations of 675K. At the same time, the U.S. February Building Permits came in at 1.524M, stronger than expectations of 1.518M.
Atlanta Fed President Raphael Bostic said on Monday that he expects just one interest-rate cut this year. “I have an outlook for how the economy’s going to perform. If it does that, then I think we can afford to be patient,” Bostic said during a moderated conversation hosted by the University of Cincinnati’s Real Estate Center in Ohio. Also, Fed Governor Lisa Cook emphasized that the U.S. central bank should adopt a cautious approach to reducing interest rates to allow more time for inflation to ease in certain segments of the economy. At the same time, Chicago Fed President Austan Goolsbee stated that he penciled in three rate cuts for this year at the Federal Reserve’s policy meeting last week. “So we’re in an uncertain state, but it doesn’t feel to me like we’ve changed fundamentally the story that we’re getting back to target,” Goolsbee said in an interview with Yahoo Finance.
Meanwhile, U.S. rate futures have priced in an 8.1% chance of a 25 basis point rate cut at the next central bank meeting in May and a 64.2% chance of a 25 basis point rate cut at the June meeting.
Today, all eyes are focused on the U.S. CB Consumer Confidence Index in a couple of hours. Economists, on average, forecast that the March CB Consumer Confidence index will stand at 106.9, compared to the previous figure of 106.7.
Also, investors will likely focus on U.S. Durable Goods Orders data, which stood at -6.1% m/m in January. Economists foresee the February figure to be +1.2% m/m.
The U.S. S&P/CS HPI Composite - 20 n.s.a. will come in today. Economists expect January’s figure to be +6.6% y/y, compared to the previous number of +6.1% y/y.
U.S. Core Durable Goods Orders data will also be closely watched today. Economists estimate this figure to stand at +0.4% m/m in February, compared to the previous value of -0.3% m/m.
The U.S. Richmond manufacturing index will be reported today as well. Economists expect the March figure to be -5, compared to the previous value of -5.
In the bond markets, United States 10-year rates are at 4.235%, down -0.38%.
The Euro Stoxx 50 futures are down -0.10% this morning as investors exercised caution ahead of a series of U.S. economic data releases. Mining and energy stocks underperformed on Tuesday, while bank stocks gained ground. According to a survey released on Tuesday, Germany’s consumer confidence is anticipated to edge up slightly in April, buoyed by improved expectations for the economy and incomes. Separately, final data from the National Statistics Institute revealed on Tuesday that Spain’s gross domestic product grew by 0.6% in the fourth quarter compared to the previous quarter, confirming a preliminary report. In corporate news, Ocado Group Plc (OCDO.LN) rose over +1% after the grocery delivery service reported that its retail division’s revenue grew 10.6% year-on-year in the first quarter.
Germany’s GfK Consumer Climate and Spain’s GDP data were released today.
The German April GfK Consumer Climate Index arrived at -27.4, stronger than expectations of -27.9.
The Spanish GDP has been reported at +0.6% q/q and +2.0% y/y in the fourth quarter, in line with expectations.
Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.17%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.04%.
China’s Shanghai Composite Index closed slightly higher today. Financial, consumer staples, and real estate stocks led the gains on Tuesday. The offshore yuan advanced for a second day on Tuesday after the People’s Bank of China strengthened its daily reference rate by the most since January. Meanwhile, Reuters reported that Chinese regulators are urging banks to accelerate the approval process for new loans to cash-starved private property developers. Separately, Reuters reported that Chinese President Xi Jinping is scheduled to hold a meeting with American business leaders in Beijing on Wednesday. In other news, China’s Vice President Han Zheng stated on Tuesday that the nation will expedite the development of “new productive forces” and enhance stability and security for the global economy. In corporate news, China Merchants Bank climbed over +4% in Hong Kong after the Chinese lender raised its dividend payout ratio to 35% of net profits, up from 33% in 2021 and 2022.
Japan’s Nikkei 225 Stock Index closed just below the flatline today. Gains in chip-related stocks helped offset losses in railway and bank stocks on Tuesday. Data from the Bank of Japan showed on Tuesday that Japan’s annual business-to-business service inflation remained unchanged at 2.1% in February. Meanwhile, Japanese Finance Minister Shunichi Suzuki stated on Tuesday that the government would take appropriate steps against rapid currency moves without ruling out any measures. In other news, BlackRock said Monday that it boosted its overweight in Japanese equities, citing positive factors such as mild inflation, strong earnings, and shareholder-friendly reforms. In corporate news, Nissan Motor slid nearly -4% following an update to its medium-term business plan that failed to impress investors. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -1.84% to 18.72.
The Japanese February Corporate Services Price Index came in at +2.1% y/y, stronger than expectations of +2.0%.
Pre-Market U.S. Stock Movers
Stoke Therapeutics (STOK) spiked about +73% in pre-market trading after announcing positive results from studies for its drug STK-001 in the treatment of children and adolescents with Dravet syndrome.
Westport Fuel Systems (WPRT) slumped more than -10% in pre-market trading after the company reported mixed Q4 results.
Seagate Technology (STX) climbed over +3% in pre-market trading after Morgan Stanley upgraded the stock to Overweight from Equal Weight with a price target of $115.
Nasdaq (NDAQ) gained more than +1% in pre-market trading after Goldman Sachs upgraded the stock to Buy from Neutral with a $73 price target.
Tandem Diabetes Care (TNDM) rose over +5% in pre-market trading after Stifel upgraded the stock to Buy from Hold with a $37 price target.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - March 26th
McCormick&Co (MKC), Synnex (SNX), GameStop Corp (GME), Concentrix (CNXC), Ncino (NCNO), Progress (PRGS), GDS Holdings (GDS), Movado (MOV), Forge Global Holdings (FRGE), Zhihu (ZH), Acumen Pharmaceuticals (ABOS), DouYu (DOYU), Terran Orbital (LLAP), Paysign (PAYS), Velo3D (VLD).
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