Morning: A calmer morning, but markets still on edge as cease-fire talks approach

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The S&P 500 futures trade roughly in-line with fair value as the market awaits the results of cease-fire talks between Russia and Ukraine.

WTI crude futures briefly topped $116 per barrel overnight as Russian forces reportedly captured the southern city of Kherson, but prices have since retraced to $113.14 per barrel (+$2.48, +2.2%). Energy stocks are benefiting from the elevated oil prices in pre-market action.

Software stocks Snowflake ( SNOW 210.35, -54.34, -20.5%), Veeva Systems ( VEEV 206.85, -23.77, -10.3%), and Okta ( OKTA 170.03, -12.67, -6.9%), on the other hand, are showing weakness after providing underwhelming-to-disappointing guidance. Their weakness could be restraining interest in other growth stocks.

Elsewhere, the Treasury market is behaving relatively quiet following three straight days of huge moves. The 2-yr yield is down two basis points to 1.50%, and the 10-yr yield is unchanged at 1.87%. The U.S. Dollar Index is up 0.2% to 97.57.

On the data front, investors will receive weekly Initial Claims (Briefing.com consensus 226,000) and revised Q4 Productivity (Briefing.com consensus 6.7%) and Unit Labor Costs (Briefing.com consensus 0.3%) at 8:30 a.m. ET, followed by the ISM Non-Manufacturing Index for February (Briefing.com consensus 61.0%) and Factory Orders for January (Briefing.com consensus 0.5%) at 10:00 a.m. ET.

In U.S. Corporate news:

  • Snowflake (SNOW 210.35, -54.34): -20.5% after providing underwhelming revenue guidance, outweighing its revenue beat.
  • Veeva Systems (VEEV 206.85, -23.77): -10.3% after guiding Q1 EPS and revenue below consensus. Veeva beat top and bottom-line estimates.
  • Okta (OKTA 170.03, -12.67): -6.9% after guiding Q1 and FY23 EPS below consensus, outweighing its better-than-expected quarterly results and upside revenue guidance.
  • Best Buy (BBY 106.00, +5.16): +5.1% even after missing revenue estimates and guiding FY23 EPS below consensus. Best Buy beat EPS estimates.
  • Intel (INTC 47.83, -1.04): -2.1% after the stock was downgraded to Underweight from Equal-Weight at Morgan Stanley.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note. Japan’s Nikkei: +0.7% Hong Kong’s Hang Seng: +0.6% China’s Shanghai Composite: -0.1% India’s Sensex: -0.7% South Korea’s Kospi: +1.6% Australia’s ASX All Ordinaries: +0.6%.

    • In economic data:
      • China’s February Caixin Services PMI 50.2 (expected 50.9; last 51.4)
      • Japan’s February Services PMI 44.2 (expected 42.7; last 47.6) and February Household Confidence 52.1 (last 49.8)
      • South Korea’s Q4 GDP 1.2% qtr/qtr (expected 1.1%; last 0.3%); 4.2% yr/yr (expected 4.1%; last 4.0%)
      • Australia’s February AIG Construction Index 53.4 (last 45.9) and February Services PMI 57.4 (expected 56.4; last 46.6). January Building Consents -27.9% m/m (expected -2.9%; last 9.8%) and Private House Approvals -17.5% m/m (last -0.3%). January trade surplus AUD12.89 bln (expected AUD9.00 bln; last AUD8.82 bln). January Imports -2% m/m (last 5%) and Exports 8% m/m (last 1%)
      • Hong Kong’s February Manufacturing PMI 42.9 (last 48.9)
    • In news:
      • The Japanese government is preparing new measures to counter rising energy prices for consumers.
      • South Korea’s 2021 GDP expanded at its fastest pace in eleven years.
      • China Business News reported that a former official with the State Administration of Foreign Exchange expects Chinese officials to set a 2022 GDP growth target between 5.0% and 5.5%.

  • Major European indices trade in the red as cautious sentiment resurfaces. STOXX Europe 600: -0.6% Germany’s DAX: -0.7% U.K.'s FTSE 100: -0.7% France’s CAC 40: UNCH Italy’s FTSE MIB: -0.8% Spain’s IBEX 35: -2.1%.

    • In economic data:
      • Eurozone’s January PPI 5.2% m/m (expected 2.3%; last 3.0%); 30.6% yr/yr (expected 26.9%; last 26.3%). January Unemployment Rate 6.8% (expected 7.0%; last 7.0%). February Services PMI 55.5 (expected 55.8; last 51.1)
      • Germany’s February Services PMI 55.8 (expected 56.6; last 52.2)
      • U.K.'s February Services PMI 60.5 (expected 60.8; last 54.1)
      • France’s February Services PMI 55.5 (expected 57.9; last 53.1)
      • Italy’s February Services PMI 52.8 (expected 52.5; last 48.5). January Unemployment Rate 8.8% (expected 9.0%; last 9.0%)
      • Spain’s February Services PMI 56.6 (expected 51.4; last 46.6)
      • Swiss February CPI 0.7% m/m (expected 0.3%; last 0.2%); 2.2% yr/yr (expected 1.7%; last 1.6%)
    • In news:
      • Fighting in Ukraine continued overnight, though officials from Russia and Ukraine are expected to meet for talks again today.
      • The latest PPI report for the eurozone showed another acceleration of the yr/yr rate to a new record while the m/m rate returned toward the peak from October.
      • European Central Bank policymaker Centeno cautioned about stagflation, adding that the degree of risk depends on the duration of the conflict in Ukraine.
      • The German Association of Chambers of Trade and Industry said that its 6.0% growth forecast for 2022 is no longer achievable.

U.S. equity futures:

  • S&P 500 Futures: -5 @ 4,382
  • DJIA Futures: -9 @ 33,882
  • Nasdaq 100 Futures: -37 @ 14,207

Overseas:

  • Europe: DAX -0.7%, FTSE -0.7%, CAC UNCH
  • Asia: Nikkei +0.7%, Hang Seng +0.6%, Shanghai Composite -0.1%

Commodities:

  • Crude Oil +3.09 @ 113.69
  • Nat Gas -0.028 @ 4.734
  • Gold +11.70 @ 1934.00
  • Silver +0.272 @ 25.462
  • Copper +0.0990 @ 4.7645
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