Morning: Bouncing back a bit after yesterday's steep sell-off

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The S&P 500 futures trade 27 points, or 0.6%, above fair value as the latest geopolitical headlines offer some reprieve for the market. The benchmark index enters the session down 0.9% for the week after a steep decline yesterday.

Investors are cautiously optimistic on the Russia-Ukraine situation after Secretary of State Blinken agreed to meet with Russia’s foreign minister next week if there’s no invasion, according to The New York Times . Russia also rebuffed claims that it was planning to invade.

The reaction outside the futures market has been muted. The 10-yr yield is unchanged at 1.97%, and the 2-yr yield is up two basis points to 1.49%. Gold futures have edged lower from the $1900 level ($1893.80, -8.20, -0.4%). The U.S. Dollar Index is little changed at 95.81.

WTI crude futures, however, are now trading below $90 per barrel ($89.49, -2.26, -2.5%) amid the potential for a nuclear agreement with Iran.

On the earnings front, investors continue to see disappointing reactions in growth stocks, specifically Roku ( ROKU 107.10, -37.61, -26.0%), DraftKings ( DKNG 18.25, -3.81, -17.3%), and Redfin ( RDFN 20.60, -8.04, -28.1%). To be fair, Roku missed revenue estimates and issued downside Q1 revenue guidance.

Separately, today’s data will include Existing Home Sales for January (Briefing.com consensus 6.08 million) and the Conference Board’s Leading Economic Index for January (Briefing.com consensus 0.2%) at 10:00 a.m. ET.

In U.S. Corporate news:

  • Roku (ROKU 107.10, -37.61): -26.0% after missing revenue estimates, guiding Q1 revenue below consensus, and saying it expects TV unit sales to remain below pre-COVID levels this year due to supply chain issues.
  • DraftKings (DKNG 18.25, -3.81): -17.3% despite beating revenue estimates and raising its FY22 revenue guidance.
  • Redfin (RDFN 20.60, -8.04): -28.1% despite beating top and bottom-line estimates and guiding Q1 revenue above consensus.
  • DuPont (DD 82.99, +3.26): +4.1% after agreeing to sell the majority of its Mobility & Materials business to Celanese (CE 158.00, +5.07, +3.3%) for $11 billion in cash.
  • Deere (DE 382.00, +1.47): +0.4% after beating top and bottom-line estimates and raising its FY22 net income guidance.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended the week on a mostly lower note. Japan’s Nikkei: -0.4% (-2.1% for the week) Hong Kong’s Hang Seng: -1.9% (-2.3% for the week) China’s Shanghai Composite: +0.7% (+0.8% for the week) India’s Sensex: -0.1% (-0.6% for the week) South Korea’s Kospi: UNCH (-0.1% for the week) Australia’s ASX All Ordinaries: -1.0% (-0.2% for the week).

    • In economic data:
      • Japan’s January National CPI 0.5% yr/yr (last 0.8%) and National Core CPI 0.2% yr/yr (expected 0.3%; last 0.5%)
      • New Zealand’s Q4 Input PPI 1.1% qtr/qtr (last 1.6%) and Output PPI 1.4% qtr/qtr (last 1.8%)
    • In news:
      • Japan’s Finance Minister Suzuki said that recent inflation has been mostly driven by higher energy costs and that inflation without higher wages will negatively impact consumption.
      • South Korea’s Vice Finance Minister Lee said that the risk of higher inflation is spreading and that a difficult situation will persist this month.
      • The conservative challenger for South Korea’s president has increased his lead over the incumbent to seven percentage points, according to Gallup.

  • Major European indices trade in mixed fashion. STOXX Europe 600: +0.1% (-1.0% week-to-date) Germany’s DAX: -0.1% (-1.1% week-to-date) U.K.'s FTSE 100: +0.4% (-1.3% week-to-date) France’s CAC 40: +0.4% (-0.5% week-to-date) Italy’s FTSE MIB: +0.5% (-0.7% week-to-date) Spain’s IBEX 35: -0.1% (-1.5% week-to-date).

    • In economic data:
      • Ukraine’s defense minister told the Kyiv Independent that the risk of an “all-out” invasion by Russia is “not high,” adding that Ukrainians are safe everywhere in the country except for the war zone in Donbas.
      • European Central Bank policymaker Kazimir voiced support for ending quantitative easing in August with a flexible timetable for rate hikes.
      • The French government will inject EUR2.1 bln into utility provider EDF.

U.S. equity futures:

  • S&P 500 Futures: +22 @ 4,403
  • DJIA Futures: +134 @ 34,446
  • Nasdaq 100 Futures: +100 @ 14,272

Overseas:

  • Europe: DAX -0.1%, FTSE +0.4%, CAC +0.4%
  • Asia: Nikkei -0.4%, Hang Seng -1.9%, Shanghai Composite +0.7%

Commodities:

  • Crude Oil -2.09 @ 89.67
  • Nat Gas +0.026 @ 4.512
  • Gold -7.60 @ 1894.40
  • Silver -0.012 @ 23.863
  • Copper +0.0195 @ 4.5425