Five things you need to know before the market opens on Friday February 10:
1. -- Stock Futures Slip As Treasury Yields Move Higher
U.S. equity futures slipped lower Friday as stocks continued to closely track moves in the bond market amid mounting indecision with respect to growth and inflation bets and their impact on the Fed's interest rate path.
Bond yields have been flashing recession signals for a number of months, now, with corporate layoffs and broader economic indicators suggesting the chances of a near-term contraction are gathering pace.
Inflation prospects, meanwhile, continue to be the subject of intense debate ahead of next week's CPI reading on Tuesday as last week's hotter-than-expected January jobs report.
The indecision was reflected in vastly different outcomes for Treasury auctions this week, with historically strong demand for the sale of $35 billion in 10-year notes Wednesday and a weak uptake in yesterday's $21 billion sale of 30-year bonds.
Bond yields were marked modestly lower in overnight trading, with benchmark 10-year notes trading at 3.687% and 2-year notes pegged at 4.501%. The U.S. dollar index, which tracks the greenback against a basket of its global peers, was marked 0.07% higher at 103.297.
The CME Group's FedWatch suggests both a 93.7% chance of another 25 basis point rate hike from the Fed next month in Washington, with bets on a follow-on move in May holding at around 69%.
Oil prices were also on the move, with Brent crude rising $1.90 to $86.37 pe barrel, after Russia said it would cut its daily production by around 500,000 barrels, a tally that comprises around 5% of its overall output, in response to western sanctions.
Stocks, meanwhile, have been navigating a mixed series of earnings throughout most of the week, with tech stocks careening on the back of headlines noting weakness in AI-focused investments, fading demand and pending job cuts.
On Wall Street, futures tied to the S&P 500 were marked for a 16 point opening bell dip while those linked to the Dow Jones Industrial Average are set for a 55 point decline. The tech-focused Nasdaq was marked 95 points in the red.
In overseas markets, Europe's Stoxx 600 was marked 0.88% lower in early Frankfurt trading while Britain's FTSE 100 fell 0.3.5%.
Overnight in Asia, the region-wide MSCI ex-Japan index was marked 1.07% lower into the close of trading while the Nikkei 225 gained 0.31%.
2. -- Adidas Counts The Cost of Kanye West Split, Shares Slump
Adidas AG shares slumped lower in German trading Friday after the sportswear group said full-year sales would likely decline sharply from 2022 levels thanks in part to its decision to cut ties with the American entertainer Kanye West.
Adidas, which severed its relationship with West late last year following a series of anti-Semitic comments made through his verified social media accounts, said writing down the Yeezy-branded stock could clip as much as €500 million from its operating profit, with a further €200 million pegged as cost linked to its turnaround plans.
Not selling Yeezy products, which were designed by West under its previous partnership, could cost around €1.2. billion in full-year sales, said new CEO Officer Bjorn Gulden, who replaced Kasper Rorsted earlier this year.
Overall sales, Adidas said, will likely decline by a "high single digit" rate this year, compared to a consensus forecast of a 4% gain.
Adidas shares were marked 9% lower in Frankfurt trading and changing hands at €75.16 each.
3. -- PayPal Higher After Solid Q4 Earnings, CEO Schulman To Retire
PayPal (PYPL) shares moved higher in pre-market trading after the online payments group posted better than expected fourth quarter earnings that were partly clouded by the retirement of CEO Daniel Schulman.
Schulman, who has lead the group since 2014, said he'll step down as CEO at the end of the year, saying in a statement that he wants to "devote more time to my passions outside the workplace". He will, however, continue to serve on the group's board of directors.
PayPal posted December quarter earnings figures that were largely ahead of Street forecasts, as revenues rose 9% to $7.4 billion, generating an adjusted bottom line of $1.24 per share, a tally that was 4 cents ahead of the consensus estimate.
Looking into the first three months of the year, however, PayPal said revenues would likely ease to around $6.97 billion, with earnings in the region of $1.08 to $1.10 per share.
PayPal shares were marked 1.1% higher in pre-market trading to indicate an opening bell price of $79.25 each.
4. -- Lyft Shares Collapse After Grim Forecast Widens Gap With Uber
Lyft (LYFT) shares collapsed in pre-market trading Friday following the ride-sharing group forecast softer-than-expected near term revenues and a plan to reduce prices and claw back market share lost to larger rival Uber Technologies.
Lyft said March quarter revenues would likely fall to around $975 million, well shy of analysts' estimates, with adjusted earnings in the region of $5 million to $15 million.
For the three months ending in December, Lyft reported adjusted earnings of $126.7 million, topping Street forecasts, as revenues rose 21% to $1.2 billion.
Lower prices, Lyft said, would compensate for the slower post-pandemic return in its key west coast markets.
Lyft shares were marked 32.3% lower in pre-market trading to indicate an opening bell price of $10.98 each.
5. -- Expedia Slides As Severe December Weather Blunts Travel, Bookings
Expedia Group (EXPE) shares moved lower in pre-market trading after the travel and experience booking website posted weaker-than-expected fourth quarter earnings thanks in part to severe December weather that clipped bookings growth.
Expedia said adjusted earnings for the quarter rose 19% from last year to $1.26 per share, but missed Street forecasts of $1.67. Group revenues were up 15% to $2.62 billion, while gross bookings were up 17% to $20.51 billion.
"While our Q4 results were negatively impacted by severe weather, demand was otherwise strong and accelerating, and has been markedly stronger since the start of the year,” said CEO Peter Kern.
Expedia Group shares were marked 1.9% lower in pre-market trading to indicate an opening bell price of $115.79 each..
