Today’s Big Picture
Asia-Pacific equity markets finished the day mixed. Hong Kong’s Hang Seng fell 0.79%, and India’s SENSEX declined 0.55%, while Japan’s Nikkei ended the day essentially flat, up 0.08%. South Korea’s KOSPI rose 0.42%, Australia’s ASX All Ordinaries gained 0.52%, and China’s Shanghai Composite closed 0.66% higher following a mostly positive day in the U.S. yesterday. Taiwan’s equities markets are closed today marking the “228 Uprising” and subsequent actions that quashed it. By mid-day trading, major European equity indices are up, and U.S. futures point to a higher open.
As we look to close the book on February when equity markets finish trading today, equities are on track to give back a portion of their January gains. As we’ve been discussing with readers, the catalysts have been the renewed focus on inflation and the Fed vs. Treasury yields, the stock market’s P/E valuation, and questions about the speed of the economy. Data from Citigroup points to traders taking a more bearish stance as they added nearly $3 billion of new shorts to S&P 500 futures last week.
With tomorrow’s start of the new month, we will begin another cycle of economic data releases. In the wake of January’s data, which pointed to a stronger-than-expected economy, February’s reports have the potential to reshape expectations not only about the vector and velocity of the economy but also inflation and of course, the Fed’s response to both.
Data Download
International Economy
Retail sales in Japan rose by 6.3% YoY in January, topping market forecasts of 4.0% and accelerating from 3.8% growth a month earlier. This marked the 11th straight month of increase in retail trade and the steepest pace since May 2021 as the economy fully reopened following the removal of all pandemic restrictions. Industrial Production in Japan decreased 3.10% YoY in January. Industries that mainly contributed to the decline were motor vehicles, production machinery, and electronic parts & devices.
Preliminary estimates put the annual inflation rate in France at 6.2% in February, up from 6% in January and 5.9% in December as well as above the market forecast for 6.1%.
Import prices in Germany were up 6.6% year-on-year in January of 2023, the smallest increase since February of 2021, following a 12.6% rise in December. Cost of consumer goods continue to rise the most (+8.8%), especially non-durable consumer goods (+9.2%), and intermediate goods (+4.7%).
Domestic Economy
At 8:30 AM ET, Retail Inventories excluding autos for the month of January will be reported as well, including Wholesale Inventories. Following comments from retailers about bloated inventories, the data will give the first hard look at how inventory levels not only after the holiday shopping season but also the post-holiday discounting one as well.
At 9 AM ET, the FHFA Housing Price Index for December will be published, and it is expected to show home prices rose 7.5% YoY, a slower rate of increase compared to December’s 8.2% jump.
At 10 AM ET, February Consumer Confidence will be released, and the consensus view has it rebounding to 108.5 from 107.1 in January.
The White House announced a timeline of 30 days for the U.S. government to ensure that they do not have TikTok, the Chinese video-sharing app, on any federal devices and systems. The House Foreign Affairs Committee is set to vote on a bill later today that would give President Joe Biden the authority to ban TikTok from all U.S. devices.
Markets
Traders stepped away from last week’s doom and gloom, and while not a serious rally, stopped bidding everything down as the Dow gained 0.22%, both the S&P 500 and the Russell 2000 rose 0.31% and the Nasdaq Composite closed 0.63% higher. Utilities (-0.11%), and Healthcare (-0.30%) lost a little ground and Financials were basically unchanged, down 0.03%. Yesterday’s big winner was Consumer Discretionary names, which rose 1.27%. Union Pacific Corp (UNP) soared 10.02% yesterday after the company announced it will be bringing in a new CEO who had successfully implemented optimized scheduling previously at rival CSX Corp (CSX).
Here’s how the major market indicators stack up year-to-date:
- Dow Jones Industrial Average: -0.78%
- S&P 500: 3.72%
- Nasdaq Composite: 9.56%
- Russell 2000: 7.67%
- Bitcoin (BTC-USD): 41.65%
- Ether (ETH-USD): 36.27%
Stocks to Watch
Before trading kicks off for U.S.-listed equities, ADT (ADT), AutoZone (AZO), Cracker Barrel (CBRL), Dentsply Sirona (XRAY), Frontline (FRO), Gogo (GOGO), JM Smucker (SJM), Perrigo (PRGO), Shift4 Payments (FOUR), Target (TGT), The Beauty Health Company (SKIN),and Warby Parker (WRBY) will be among the companies reporting their quarterly results.
January quarter results at Zoom Video (ZM) topped consensus expectations; however, the company issued mixed results for both the current quarter and 2024. Exiting the January quarter, Zoom had ~213,000 enterprise customers, up 12% YoY and the number of customers contributing more than $100,000 in trailing 12 month revenue rose ~27% YoY to 3,471. For the current quarter, the company sees EPS of $0.96-$0.98 vs. the $0.86 consensus with revenue in the range of $1.080-$1.085 billion vs. the $1.11 billion consensus. For the full year, Zoom forecasts EPS of $4.11-$4.18 vs. the $3.67 consensus with revenue in the range of $4.435-$4.455 billion vs. the $4.63 billion consensus.
Shares of AdaptHealth (AHCO) were under pressure in aftermarket trading last night after the company cut its 2023 revenue guidance to $3.16-$3.24 billion from its prior forecast of $3.21-$3.29 billion vs. the $3.26 billion consensus. AdaptHealth also cut its 2023 EBITDA forecast to $650-$710 million vs. its prior guidance of $690-$750 million.
Snap (SNAP) unveiled a new chatbot called “My AI”, which is built on the latest version of OpenAI’s GPT technology, and customized for Snapchat. The company is offering an “experimental” feature for subscribers to its Snapchat+ service starting this week.
Reports indicate Meta Platforms (META) is creating a new top-level product group focused on generative artificial intelligence.
Nokia (NOK) launched the Beacon 10, its first gateway supporting Wi-Fi 6E to provide seamless, high-capacity mesh networking.
At its annual investor meeting, Chevron (CVX) raised its share buyback guidance range to $10-$20 billion per year. That news follows the company boosting its annual dividend by 6% last month, alongside word its board authorized a new $75 billion share buyback program.
IPOs
The near-term IPO calendar is relatively light, so no significant IPOs slated to price this week. Readers looking to dig more into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.
After Today’s Market Close
3D Systems(DDD), Ambarella (AMBA), Axon (AXON), Blink Charging (BLNK), Cutera (CUTR), First Solar (FSLR), GoodRx (GDRX), HP (HPQ), Inter Parfums (IPAR), Monster Beverage (MNST), OneSpan (OSPN), Rivian Automotive (RIVN), Ross Stores (ROST),andVirgin Galactic (SPCE)are expected to report their latest quarterly results after equities stop trading today. Those looking for more on which companies are reporting when, head on over to Nasdaq’s Earnings Calendar.
On the Horizon
Wednesday, March 1
- Japan: Manufacturing PMI – February
- China: Manufacturing & Non-Manufacturing PMI, Caixin Manufacturing PMI – February
- Germany: Retail Sales – January
- Eurozone: S&P Global Manufacturing PMI – February
- UK: Manufacturing PMI – February
- US: Weekly MBA Mortgage Applications
- US: S&P Global Manufacturing PMI – February
- US: ISM Manufacturing Index – February
- US: Construction Spending – January
- US: Weekly EIA Crude Oil Inventories
Thursday, March 2
- Japan: Household Confidence – February
- Eurozone: Consumer Price Index – February
- US: Weekly Initial & Continuing Jobless Claims
- US: Productivity & Unit Labor Cost – 4Q 2022
- US: Weekly EIA Natural Gas Inventories
Friday, March 3
- Japan: Services PMI – February
- China: Caixin Services PMI – February
- Eurozone: S&P Global Services PMI – February
- Eurozone: Producer Price Index – January
- UK: Services PMI – February
- US: S&P Global Services PMI – February
- US: ISM Non-Manufacturing Index – February
Thought for the Day
“Knowing what you don’t know is more useful than being brilliant” ~ Charlie Munger
Disclosures
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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