Morning Markets

March S&P 500 futures (ESH23) this morning are down -0.50%, and March Nasdaq 100 E-Mini futures (NQH23) are down -0.80%, both at 1-week lows.

U.S. stock index futures this morning are under pressure from higher bond yields after a chorus of Fed speakers this week reinforced the need for the Fed to keep raising interest rates for longer.  The 10-year T-note yield today rose to a 5-week high of 3.715%.  

Some disappointing earnings results are also weighing on stock index futures this morning.  Lyft plunged more than -31% in pre-market trading after forecasting Q1 revenue well below expectations.  Also, Newell Brands is down more than -7% after forecasting weaker-than-expected full-year net sales.  In addition, Expedia Group is down more than -2% after reporting Q4 gross bookings below consensus.

On the positive side, energy stocks are climbing in pre-market trading, with the prices of WTI crude up more than +2% to a 1-1/2 week high after Russia said it plans to cut March oil production by 500,000 bpd in retaliation for international sanctions. OPEC+ said they wouldn’t boost output to make up for the shortfall.

Overseas markets are mixed.  The Euro Stoxx 50 index is down -1.65%.  China’s Shanghai Composite stock index closed down -0.30%, and Japan’s Nikkei Stock index closed up +0.31%. 

The Euro Stoxx 50 index today dropped to a 1-week low.  Concerns that central banks will keep raising interest rates are pushing yields higher and weighing on stocks.  The 10-year German bund yield is up +4.3 bp to 2.347% after ECB Governing Council member Vujcic said the ECB would probably continue raising interest rates after its March meeting.  Also, a slump of more than 10% in Adidas AG is weighing on the overall market after the company said its operating loss this year might reach 700 million euros ($752 million) due to 1.2 billion euros of unsold merchandise it holds after terminating a deal with rapper Ye. 

Today’s Eurozone economic news was bullish for stocks after Italy's Dec industrial production rose +1.6% m/m, stronger than expectations of +0.1% m/m.

China’s Shanghai Composite today closed moderately lower.  Weakness in AI-related stocks led the technology sector lower after the Securities Times said stock investors should not blindly join domestic stock speculation linked to ChatGBT.  Also, weakness in automakers weighed on the overall market.  Losses were limited after Chinese consumer inflation quickened last month as the Lunar New Year holiday spurred demand.  However, a larger-than-expected decline in China producer prices shows a benign inflation outlook that could allow the PBOC to boost stimulus measures if needed.

China Jan CPI rose +2.1% y/y, right on expectations.  China Jan PPI fell -0.8% y/y, weaker than expectations of -0.5% y/y.

Japan’s Nikkei Stock Index today closed moderately higher.  Strong earnings results from chipmakers boosted technology stocks.  However, stocks fell back from their best levels as exporter stocks weakened when the yen rallied after former BOJ member Ueda was nominated as the next BOJ Governor.  Japanese Prime Minister Kishida nominated former BOJ member Ueda to be BOJ Governor after Deputy BOJ Governor Amamiya turned down an offer for the post.  Ueda is considered more hawkish than Amamiya.

Today’s Japanese economic news was supportive for stocks after Jan PPI rose +9.5% y/y, weaker than expectations of +9.7% y/y and the slowest pace of increase in 6 months.

Pre-Market U.S. Stock Movers

Expedia Group (EXPE) fell more than -2% in pre-market trading after reporting Q4 gross bookings of $20.51 billion, weaker than the consensus of $21.06 billion. 

Lyft (LYFT) plunged more than -31% in pre-market trading after forecasting Q1 revenue of $975 million, well below the consensus of $1.09 billion. 

News Corp (NWSA) dropped more than -2% in pre-market trading after reporting Q2  revenue of $2.52 billion, weaker than the consensus of $2.58 billion, and said it would cut about 5% of its workforce this year.

Newell Brands (NWL) tumbled more than -7% in pre-market trading after forecasting full-year net sales of $8.4 billion to $8.6 billion, well below the consensus of $9.06 billion. 

Tesla (TSLA) is down more than -2% in pre-market trading after announcing that it will raise the price of its Model Y in China to 261,900 yuan from 259,900 yuan. 

Exact Sciences (EXAS) fell more than -3% in pre-market trading after Credit Suisse downgraded the stock to neutral from outperform.

Doximity (DOCS) tumbled more than -4% in pre-market trading after cutting guidance on full-year revenue to $417.7 million-$418.7 million from a previous forecast of $424 million-$432 million, weaker than the consensus of $427.1 million. 

Cloudflare (NET) jumped more than +7% in pre-market trading after forecasting full-year revenue of $1.33 billion-$1.34 billion, above the consensus of $1.31 billion.  

Energy producers and energy service providers are climbing in pre-market trading, with the price of WTI crude up more than +2% at a 1-1/2 week high.  Devon Energy (DVN), Exxon Mobil (XOM), Haliburton (HAL), Occidental Petroleum (OXY), Schlumberger (SLB), and Valero Energy (VLO) are up +2% or more.   

Yelp (YELP) climbed more than +6% in pre-market trading after reporting Q4 adjusted Ebitda of $80.4 million, better than the consensus of $78.2 million. 

Alteryx (AYX) jumped more than +9% in pre-market trading after reporting Q4 revenue of $301.1 million, above the consensus of $279.1 million and forecast full-year revenue of $980 million-$990 million, stronger than the consensus of $969.2 million.

VF Corp (VFC) is up more than +1% in pre-market trading after Stifel upgraded the stock to buy from hold.

Today’s U.S. Earnings Reports (2/10/2023)

Global Payments Inc (GPN), IQVIA Holdings Inc (IQV), Newell Brands Inc (NWL), Spectrum Brands Holdings Inc (SPB), Ultragenyx Pharmaceutical Inc (RARE), WP Carey Inc (WPC).

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