March S&P 500 E-Mini futures (ESH25) are up +0.23%, and March Nasdaq 100 E-Mini futures (NQH25) are up +0.34% this morning, starting a busy week on a positive note.
This week, investors look ahead to remarks from Federal Reserve Chair Jerome Powell and other Fed officials, earnings reports from several high-profile companies, as well as a slew of U.S. economic data, with a particular focus on Friday’s nonfarm payrolls report.
Investors are also waiting for news of any last-minute negotiations to prevent a further increase in U.S. trade tariffs on Chinese goods, set to take effect on Tuesday, along with levies on Mexico and Canada.
In Friday’s trading session, Wall Street’s major equity averages closed higher. AES Corp. (AES) surged over +11% and was the top percentage gainer on the S&P 500 after the company posted better-than-expected Q4 adjusted EPS and issued above-consensus FY25 adjusted EPS guidance. Also, chip stocks gained ground, with Nvidia (NVDA) advancing nearly +4% to lead gainers in the Dow and Intel (INTC) rising more than +2%. In addition, Monster Beverage (MNST) climbed over +5% after reporting stronger-than-expected Q4 revenue. On the bearish side, NetApp (NTAP) plunged more than -15% and was the top percentage loser on the S&P 500 after cutting its full-year adjusted EPS guidance.
Data from the U.S. Department of Commerce released on Friday showed that the core PCE price index, a key inflation gauge monitored by the Fed, came in at +0.3% m/m and +2.6% y/y in January, in line with expectations. Also, U.S. January personal spending unexpectedly fell -0.2% m/m, weaker than expectations of +0.2% m/m, while personal income grew +0.9% m/m, stronger than expectations of +0.4% m/m. In addition, the U.S. Chicago PMI rose to a 5-month high of 45.5 in February, stronger than expectations of 40.5.
“While additional rate cuts are still probably many months away, we believe [January’s PCE report] helps to keep one or two rate cuts on the table for 2025,” said Robert Ruggirello at Brave Eagle Wealth Management.
Meanwhile, U.S. rate futures have priced in a 93.0% probability of no rate change and a 7.0% chance of a 25 basis point rate cut at the Fed’s monetary policy committee meeting later this month.
The U.S. February Nonfarm Payrolls report will be the main highlight this week as it could serve as a crucial indicator of the direction of U.S. interest rates. Other noteworthy data releases include U.S. ADP Nonfarm Employment Change, the S&P Global Composite PMI, the S&P Global Services PMI, the ISM Non-Manufacturing PMI, Factory Orders, Crude Oil Inventories, Exports, Imports, Initial Jobless Claims, Nonfarm Productivity, Unit Labor Costs, Trade Balance, Wholesale Inventories, Average Hourly Earnings, the Unemployment Rate, and Consumer Credit.
Fed Chair Jerome Powell is set to deliver a speech on the economic outlook at the University of Chicago Booth School of Business 2025 U.S. Monetary Policy Forum on Friday. A host of other Fed officials will also be making appearances throughout the week, including Williams, Waller, Barkin, Bostic, Bowman, and Kugler.
Market participants will also focus on earnings reports from several high-profile companies. Prominent companies such as Broadcom (AVGO), CrowdStrike (CRWD), Hewlett Packard Enterprise (HPE), MongoDB (MDB), and Marvell Technology (MRVL), along with retailers like Target (TGT), Costco (COST), Best Buy (BBY), and Macy’s (M) are scheduled to report their quarterly results this week.
In addition, the Fed will release its Beige Book survey of regional business contacts this week, which provides an update on economic conditions in each of the 12 Fed districts. The Beige Book is published two weeks before each meeting of the policy-setting Federal Open Market Committee.
Today, all eyes are focused on the U.S. ISM Manufacturing PMI, which is set to be released in a couple of hours. Economists, on average, forecast that the February ISM manufacturing PMI will be 50.6, compared to January’s figure of 50.9.
Investors will also focus on the U.S. S&P Global Manufacturing PMI, which stood at 51.2 in January. Economists expect the final February figure to be 51.6.
U.S. Construction Spending data will be released today as well. Economists foresee this figure coming in at -0.1% m/m in January, compared to +0.5% m/m in December.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.252%, up +0.54%.
The Euro Stoxx 50 Index is up +0.40% this morning as investors digested geopolitical developments and key inflation data from the region, while also awaiting the European Central Bank’s monetary policy decision later in the week. Defense stocks jumped on Monday as a coordinated effort by European leaders bolstered expectations of increased military spending. Over the weekend, European leaders pushed to form what Britain termed a “coalition of the willing” to strengthen Ukraine’s security after a heated Oval Office exchange between U.S. President Donald Trump and Ukrainian President Volodymyr Zelensky. Adding to the momentum was a Reuters report indicating that the parties negotiating to form Germany’s new government were considering establishing a defense fund. Meanwhile, data from Eurostat released on Monday showed that the Eurozone’s annual inflation rate eased in February for the first time in five months, providing reassurance for ECB policymakers. Separately, a survey indicated that the prolonged downturn in the Eurozone’s manufacturing sector showed further signs of improvement in February, as demand fell at its slowest rate in nearly three years. Investor focus this week is on the ECB’s monetary policy decision on Thursday, with the central bank widely expected to deliver a 25-basis-point rate cut.
Eurozone’s Manufacturing PMI, Eurozone’s CPI (preliminary), and Eurozone’s Core CPI (preliminary) data were released today.
Eurozone February Manufacturing PMI stood at 47.6, stronger than expectations of 47.3.
Eurozone February CPI came in at +2.4% y/y, stronger than expectations of +2.3% y/y.
Eurozone February Core CPI arrived at +2.6% y/y, stronger than expectations of +2.5% y/y.
Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.12%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.70%.
China’s Shanghai Composite Index closed slightly lower today as investors remained cautious in anticipation of the country’s National People’s Congress meeting this week. Home appliance stocks led the declines on Monday. OCBC analyst Tommy Xie said in a note on Monday that the date U.S. President Donald Trump’s additional tariffs on China are set to take effect coincides with the opening of China’s NPC, heightening expectations over Beijing’s policy responses to bolster growth. Investor focus is on Wednesday’s government work report, which will reveal the official growth target for the world’s second-largest economy, with most analysts anticipating that the target will be maintained at 2024’s “around 5%” growth. To achieve it, policymakers are anticipated to raise China’s official budget deficit target to its highest in more than three decades, injecting trillions of yuan into an economy grappling with deflation, industrial overcapacity, a struggling property market, and a trade war with the U.S. Meanwhile, a private-sector survey released on Monday showed that China’s factory activity expanded at the fastest rate in three months in February, driven by stronger production and new orders. In addition, official data released over the weekend showed an unexpected expansion in factory activity, while growth in the services sector also exceeded expectations. In corporate news, Geely Automobile climbed over +2% in Hong Kong after the automaker announced that the group’s total sales volume in February soared 84% year-over-year to 204,910 units.
The Chinese February Manufacturing PMI stood at 50.2, stronger than expectations of 50.0.
The Chinese February Non-Manufacturing PMI arrived at 50.4, stronger than expectations of 50.3.
The Chinese February Caixin Manufacturing PMI came in at 50.8, stronger than expectations of 50.4.
Japan’s Nikkei 225 Stock Index ended higher today, recovering from a sharp drop in the prior session, supported by Wall Street’s strong finish on Friday and a weaker yen. Heavy industry and automobile stocks led the gains on Monday. A private-sector survey released on Monday showed that Japan’s factory activity was revised slightly higher for February, yet it continued to contract for the eighth consecutive month. Meanwhile, investors are monitoring any updates on U.S. trade and foreign policies and their potential impact on Japanese businesses. The March 4th deadline is approaching for U.S. President Donald Trump’s planned 25% tariffs on Mexico and Canada, along with an additional 10% duty on Chinese goods. Investors are also looking ahead to remarks from Bank of Japan Deputy Governor Shinichi Uchida on Wednesday for insights into the timing of the central bank’s next move. In corporate news, Recruit surged nearly +7% after the staffing agency announced plans to repurchase up to 3.5% of its outstanding shares. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -7.47% to 25.28.
The Japanese February au Jibun Bank Manufacturing PMI arrived at 49.0, stronger than expectations of 48.9.
Pre-Market U.S. Stock Movers
Allegro Microsystems (ALGM) climbed more than +10% in pre-market trading after Bloomberg reported that the semiconductor devices company was drawing takeover interest from ON Semiconductor.
Capri Holdings (CPRI) surged over +9% in pre-market trading after Bloomberg reported that Prada is nearing a deal to buy Versace from the company for nearly 1.5 billion euros ($1.6 billion).
Intel (INTC) climbed about +5% in pre-market trading after Reuters reported that chip designers Nvidia and Broadcom were conducting manufacturing tests with the company.
Southwest Airlines (LUV) fell more than -2% in pre-market trading after JPMorgan downgraded the stock to Underweight from Neutral with a price target of $25.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Monday - March 3rd
Okta (OKTA), Gitlab (GTLB), Ast Spacemobile (ASTS), TG (TGTX), California Resources (CRC), ADMA Biologics Inc (ADMA), Burford (BUR), Surgery Partners Inc (SGRY), Nomad Foods (NOMD), Concentra Holdings Parent (CON), NAble (NABL), Nuscale Power (SMR), Sphere Entertainment (SPHR), Plug Power (PLUG), Dave Inc (DAVE), Viant Technology (DSP), Kayne Anderson BDC (KBDC), Fortrea Holdings (FTRE), Exodus Movement (EXOD), Ready Capital (RC), BioLife Solutions (BLFS), MRC Global (MRC), Heidrick&Struggles (HSII), Avadel Pharma (AVDL), Whitestone (WSR), GigaCloud Technology (GCT), Repay Holdings (RPAY), Crawford&Co (CRDa), Senseonics Holdings Inc (SENS), Emergent Biosolutions (EBS), Ranger Energy Services (RNGR), Intrepid Potash (IPI), ThredUp (TDUP), Neumora Therapeutics (NMRA), QuantumSi (QSI), W&T Offshore (WTI), AG Mortgage Investment (MITT), Sunnova Energy (NOVA), BRC Inc. (BRCC), B. Riley Financial (RILY), James River Group (JRVR), Stereotaxis (STXS).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
