Five things you need to know before the market opens on Friday February 24:
1. -- Stock Futures Slip Lower With Inflation Data In Focus
U.S. equity futures slipped lower Friday, while the dollar climbed to the highest levels in more than two months against its global peers, as investors prepped for key inflation reading prior to the start of trading as stocks edged towards their second consecutive weekly decline.
A big move in Treasury bond yields, which lifted 10-year notes to around 3.97% during Thursday's volatile trading session, has pressured stocks for much of the past two weeks, following on from a series of economic data points showing faster-than-expected inflation, resilient job gains, hawkish Federal Reserve minutes and an above-trend growth economy.
And while economists and investors alike are paring bets on a near-term recession, the underlying strength of domestic growth is likely to elicit a sharper response from the Fed as a result, with bets on a July rate hike -- in the wake of expected increases in March, May and June -- rising to around 24.4%, according to data from the CME Group's FedWatch.
Benchmark 10-year notes were marked at around 3.902% in overnight trading, the highest since early November, while 2-year notes held at 4.710%. The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.06% higher at 104.659.
That's likely to add further weight to a stock market that's facing the prospect of an earnings recession, following data showing fourth quarter profits fell 2.8% from last year and will likely contract by around 3.9% over the three months ending in June.
In the meantime, the CBOE Group's key VIX volatility gauge, is holding at elevated levels heading into today's session at 21.51 points, indicating traders are expecting a daily swing of around 54 points for the S&P 500 over the next thirty days.
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500 were indicating an 18 point opening bell pullback ahead of the January PCE inflation data at 8:30 am Eastern time.
Futures linked to the Dow Jones Industrial Average were indicating a 98 point decline while the tech-heavy Nasdaq is looking at a 96 point pullback.
In overseas markets, Europe's Stoxx 600 was marked 0.22% higher in early Frankfurt trading despite dats showing Germany's economy contracted over the fourth quarter of last year, while Britain's FTSE 100 gained 0.32% in London as the pound slipped to 1.2013 against the U.S. dollar.
Overnight in Asia, the region-wide MSCI ex-Japan index fell 1.18% into the close of trading amid renewed tensions between Washington and Beijing over military support for Taiwan, while the Nikkei 225 ended 1.29% higher in Tokyo following dovish comments on interest rates from incoming Bank of Japan Governor Kazuo Ueda.
2. -- Fed Inflation Gauge May Confirm 'Sticky' Price Pressures In Hot Economy
The Bureau of Economic Analysis will publish details of its personal consumption expenditures (PCE) Index prior to the start of trading Friday, with analysts looking for signals that the Federal Reserve's preferred inflation gauge will indicate a further easing of price pressures in the world's biggest economy.
Analysts expect the core PCE price index to rise by 0.4% in January, a modest uptick from the 0.3% pace recorded in December. However, an upward revision of the fourth quarter tally, which rose by 4.3%, has added upside risk to the January reading, which could also filter through into the year-over-year calculations.
If the PCE data comes in hot, or reflects price pressures that outpace the January CPI reading, investors may force another re-set of interest rate expectations from the Federal Reserve, particularly after Minutes from its February policy meeting indicated the need for multiple rate hikes amid the resilient job market and stronger-than-expected January retail sales.
3. -- Boeing Shares Slide As Planemaker Suspends 787 Dreamliner Deliveries
Boeing (BA) shares moved sharply lower in pre-market trading after the Federal Aviation Administration asked the planemaker to suspend deliveries of its 787 Dreamliner as it conducts extended safety checks.
The FAA said Boeing will need to demonstrate that issues with a fuselage component have been properly addressed before it can continue delivering the flagship widebody aircraft. An earlier report from the Wall Street Journal suggested Boeing needed to complete documentation linked the planes, noting that it hasn't delivered one since January 26.
Earlier this month, Boeing signed a $34 billion aircraft deal with Air India that would see the region's largest carrier purchase at least 20 787-9 Dreamliners, with an option for 20 more, in what President Joe Biden described as an "historic agreement" that would support more than a million American jobs over 44 states.
Boeing shares were marked 2.6% lower in pre-market trading to indicate an opening bell price of $202.70 each.
4. -- Warner Bros. Discovery Slumps After Wider Q4 Loss On Soft Ad Sales, Restructuring
Warner Bros. Discovery (WBD) shares slumped lower in pre-market trading after the entertainment and studio group formed from the spin-off of AT&T's (T) media assets posted a wider-than-expected fourth quarter loss.
Warner Bros. Discovery, which owns the HBO Max and Discovery+ streaming services, said its loss for the three months ending in December was pegged at 89 cents per share, well outside the Street consensus forecast of 21 cents, linked in part to restructuring charges.
Revenues were also light of analysts' expectations at $11 billion, although streaming revenue topped forecasts at $2.45 billion as overall subscribers rose by 1.1 million to 96 million.
Warner Bros. Discovery shares were marked 4.2% lower in pre-market trading to indicate an opening bell price of $15.07 each.
5. -- Beyond Meat Soars After Q4 Sales Beat, Improving Plant-Food Outlook
Beyond Meat (BYND) shares surged higher in pre-market trading after the plant-based food maker posted a narrower-than-expected fourth quarter loss and forecast solid revenue gains for the coming year.
Beyond Meat said full-year sales should range between $375 million and $415 million as it looks to revive growth for its plant-based products amid persistent food price inflation and a pullback in consumer spending.
For the three months ending in December, Beyond Meat said revenues fell 20.7% from last year to $79.9 million, but that tally topped Street forecasts by around $4 million, as the group's net loss narrowed to $67 million, or $1.05 per share.
Beyond Meat shares were marked 14% higher in pre-market trading to indicate an opening bell price of $19.53 each.
