March S&P 500 E-Mini futures (ESH25) are down -0.02%, and March Nasdaq 100 E-Mini futures (NQH25) are up +0.06% this morning as market participants awaited crucial producer inflation data and a new round of corporate earnings reports.
In yesterday’s trading session, Wall Street’s major indexes ended mixed. Westinghouse Air Brake Technologies (WAB) slumped over -9% and was the top percentage loser on the S&P 500 after the company posted downbeat Q4 results and provided soft FY25 guidance. Also, Biogen (BIIB) fell more than -4% and was the top percentage loser on the Nasdaq 100 after the drug developer issued weaker-than-expected FY25 adjusted EPS guidance. In addition, Lyft (LYFT) slid over -7% after the ride-hailing company gave disappointing guidance for Q1 gross bookings. On the bullish side, CVS Health (CVS) surged nearly +15% and was the top percentage gainer on the S&P 500 after the healthcare conglomerate reported better-than-expected Q4 results.
The U.S. Bureau of Labor Statistics report released on Wednesday showed that consumer prices jumped +0.5% m/m in January, stronger than expectations of +0.3% m/m. On an annual basis, headline inflation unexpectedly accelerated to +3.0% in January from +2.9% in December, stronger than expectations of no change at +2.9% and the fastest pace of increase in 7 months. Also, the January core CPI, which excludes volatile food and fuel prices, unexpectedly accelerated to +3.3% y/y from +3.2% y/y in December, stronger than expectations of +3.1% y/y.
“Higher-for-longer may have just gotten a little longer,” said Ellen Zentner at Morgan Stanley Wealth Management. “The Fed has been waiting for clear signs that inflation is trending lower again, and [yesterday] they got the opposite. Until that changes, the markets are going to have to remain patient about additional rate cuts.”
Federal Reserve Chair Jerome Powell stated on Wednesday that the latest CPI report indicates that although the central bank has made substantial progress toward taming inflation, there is still more work to do. “I would say we’re close, but not there on inflation. Last year, inflation was 2.6% - so great progress - but we’re not quite there yet,” Powell told House lawmakers in response to a question on the second day of his semi-annual testimony to Congress. The Fed chief added that policymakers “want to keep policy restrictive for now,” suggesting that interest rates will stay elevated for the foreseeable future. Also, Atlanta Fed President Raphael Bostic said that the timing of the next interest rate cut remains uncertain due to the unclear trajectory of inflation and potential policy changes, including tariffs, from the Trump administration. “It’s going to take a while to just figure out what is going on,” Bostic noted.
Meanwhile, U.S. rate futures have priced in a 97.5% chance of no rate change and a 2.5% chance of a 25 basis point rate cut at the March meeting.
On the earnings front, notable companies like Applied Materials (AMAT), Deere & Company (DE), Palo Alto Networks (PANW), Duke Energy (DUK), Airbnb (ABNB), and Datadog (DDOG) are set to report their quarterly figures today.
Today, all eyes are focused on the U.S. Producer Price Index, which is set to be released in a couple of hours. Economists, on average, forecast that the U.S. January PPI will come in at +0.3% m/m and +3.2% y/y, compared to the previous figures of +0.2% m/m and +3.3% y/y.
The U.S. Core PPI will also be closely monitored today. Economists expect January figures to be +0.3% m/m and +3.3% y/y, compared to December’s numbers of 0.0% m/m and +3.5% y/y.
U.S. Initial Jobless Claims data will be released today as well. Economists estimate this figure will come in at 217K, compared to 219K last week.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.601%, down -0.71%.
The Euro Stoxx 50 Index is up +1.02% this morning as talks between the U.S. and Russia spurred expectations for an end to the war in Ukraine, boosting market sentiment. Food & beverage and automobile stocks outperformed on Thursday. Data from the Office for National Statistics showed Thursday that Britain’s economy unexpectedly grew at the end of 2024, an improvement from the stagnation seen in the third quarter. Separately, final data from the Federal Statistical Office confirmed that Germany’s annual inflation rate fell to 2.3% in January from 2.6% in December. In addition, data showed that Eurozone monthly industrial production fell more than expected in December, dampening signs of recovery observed earlier in the fourth quarter. Meanwhile, U.S. President Donald Trump said that Russian President Vladimir Putin and Ukraine’s Volodymyr Zelenskyy both expressed a desire for peace during separate phone conversations with him on Wednesday. Trump also said he had directed U.S. officials to start negotiations immediately to end the war. In corporate news, Nestle SA (NESN.Z.IX) climbed over +5% after the world’s largest packaged food company said it expects an uptick in 2025 organic sales growth, assuming “no significant change in key macroeconomic variables.” Also, Siemens AG (SIE.D.DX) gained more than +5% after the engineering group posted a better-than-expected Q1 profit.
U.K.’s GDP (preliminary), Germany’s CPI, and Eurozone’s Industrial Production data were released today.
U.K. GDP has been reported at +0.1% q/q and +1.4% y/y in the fourth quarter, stronger than expectations of -0.1% q/q and +1.1% y/y.
U.K. December GDP stood at +0.4% m/m and +1.5% y/y, stronger than expectations of +0.1% m/m and +1.0% y/y.
The German January CPI came in at -0.2% m/m and +2.3% y/y, in line with expectations.
Eurozone December Industrial Production arrived at -1.1% m/m and -2.0% y/y, compared to expectations of -0.6% m/m and -3.1% y/y.
Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.42% and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.28%.
China’s Shanghai Composite Index closed lower today. Semiconductor and technology stocks led the declines on Thursday. Investors were reassessing the valuations of tech-related stocks following a recent rally spurred by AI startup DeepSeek’s breakthrough. U.S. President Trump’s latest tariff threats also dampened market sentiment. Trump on Wednesday said he would soon impose reciprocal tariffs on every country that charges duties on U.S. imports, heightening concerns of a widening global trade war. Meanwhile, Reuters reported on Wednesday that the Indian government is considering imposing a temporary tax of between 15% and 25% on Chinese steel as early as six months from now to protect India’s steel industry. In corporate news, Alibaba Group rose over +2% in Hong Kong, extending yesterday’s gains after The Information reported that Apple is partnering with the company to bring AI features to iPhone users in China.
Japan’s Nikkei 225 Stock Index ended higher today, rising for a second consecutive session as a weak yen continued to boost risk appetite. A weaker yen enhances the profit prospects for Japan’s export-oriented industries and increases the appeal of Japanese assets to foreign investors. Electronic and automobile stocks led the gains on Thursday. Data released on Thursday showed that Japan’s annual wholesale inflation climbed to a 7-month high in January and accelerated for the fifth consecutive month, underscoring persistent price pressures and bolstering market expectations for another interest rate hike this year. Meanwhile, Japan’s 10-year government bond yield hit a nearly 15-year high on Thursday, following a rise in Treasury yields on stronger-than-expected U.S. inflation data and growing expectations of a BOJ interest rate increase. In corporate news, Trend Micro climbed about +16% after Reuters reported that Bain Capital, Advent International, and EQT AB are among the private equity firms competing to buy the Japanese cybersecurity company. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -4.71% to 20.02.
The Japanese January PPI came in at +0.3% m/m and +4.2% y/y, compared to expectations of +0.3% m/m and +4.0% y/y.
Pre-Market U.S. Stock Movers
Cisco Systems (CSCO) climbed over +6% in pre-market trading after the networking giant posted upbeat FQ2 results and raised its full-year guidance.
AppLovin (APP) soared more than +28% in pre-market trading after the mobile software company reported stronger-than-expected Q4 results and issued above-consensus Q1 revenue guidance.
Robinhood Markets (HOOD) surged over +13% in pre-market trading after the trading platform posted better-than-expected Q4 results.
The Trade Desk (TTD) plummeted over -26% in pre-market trading after the ad tech firm reported weaker-than-expected Q4 revenue and issued disappointing Q1 revenue guidance.
Reddit (RDDT) plunged more than -11% in pre-market trading after the social media platform reported weaker-than-expected Q4 user growth.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - February 13th
Applied Materials (AMAT), Deere & Company (DE), Palo Alto Networks (PANW), Moody’s (MCO), Duke Energy (DUK), Brookfield (BN), Airbnb (ABNB), Motorola (MSI), Zoetis Inc (ZTS), Republic Services (RSG), Coinbase Global (COIN), Digital (DLR), American Electric Power (AEP), Howmet (HWM), Agnico Eagle Mines (AEM), Datadog (DDOG), Ingersoll Rand (IR), Alnylam (ALNY), DexCom (DXCM), Iron Mountain (IRM), Godaddy (GDDY), Global Payments (GPN), DTE Energy (DTE), PPL (PPL), West Pharmaceutical Services (WST), TELUS (TU), DraftKings (DKNG), Twilio (TWLO), Cyberark Software (CYBR), TransUnion (TRU), Zebra (ZBRA), US Foods (USFD), Hyatt (H), Baxter (BAX), Sharkninja (SN), DaVita (DVA), Roku (ROKU), Pilgrims Pride (PPC), Molson Coors Brewing (TAP), Kinsale Capital (KNSL), Procore Technologies (PCOR), Penske Automotive (PAG), Lincoln Electrics (LECO), Federal Realty (FRT), Bio-Rad Labs (BIO), Wynn Resorts (WYNN), Informatica (INFA), Bruker (BRKR), CAE Inc. (CAE), Nova (NVMI), Bright Horizons (BFAM), Blueprint Medicines Corp (BPMC), Herc Holdings (HRI), Vontier (VNT), Knife River (KNF), Cellebrite (CLBT), Crocs (CROX), Air Lease (AL), Trinet Grou (TNET), Euronet (EEFT), Organon Co (OGN), Avient Corp (AVNT), Granite Construction (GVA), Hercules Capital (HTGC), Hannon Armstrong Sustainable (HASI), PBF Energy (PBF), YETI (YETI), Iridium (IRDM), Walker&Dunlop (WD), The Wendy’s Co (WEN), Warrior Met Coal (HCC), Hanesbrands (HBI), Yelp (YELP), LXP Industrial Trust (LXP), Goodyear Tire & Rubber Co (GT), Scorpio Tankers (STNG), Sixth Street Specialty Lending (TSLX), Agios Pharm (AGIO), Knowles Cor (KN), Now (DNOW), Hertz Global Holdings (HTZ), Elme (ELME), Altice USA (ATUS), Leggett&Platt (LEG), Genesis Energy LP (GEL), Udemy (UDMY), PDF Solutions (PDFS), Franklin BSP Realty Trust (FBRT), Piedmont Office (PDM).
