The S&P 500 futures trade 24 points, or 0.6%, below fair value after a three-day rally in which the S&P 500 rose 5.7%. There are lingering concerns regarding Russia’s invasion of Ukraine.
U.S. officials believe that Russia will use “brandish threats” to use nuclear weapons against the West amid Ukrainian resistance, according to Bloomberg , and are worried that China is moving closer to supporting Russia’s war in Ukraine. President Biden will reportedly call Chinese President Xi at 9:00 a.m. ET today to try and convince him not to do that.
WTI crude futures, which jumped more than 8.0% yesterday, are currently up 0.9% to $103.80/bbl after Russian missiles struck just outside Lyiv, a city close to Poland where many Ukrainians have been sheltering.
U.S. Treasury yields are moving lower amid the negative bias in the futures market and the negative-sounding geopolitical headlines. The 2-yr yield is down five basis points to 1.89%, and the 10-yr yield is down five basis points to 2.14%. The U.S. Dollar Index is up 0.4% to 98.39.
Separately, Saint Louis Fed President Bullard (voting FOMC member) told CNBC that he wanted the Fed to begin reducing the balance sheet last meeting and that interest rates this year should be above 3% to bring inflation under control. On a related note, the Bank of Japan made no policy changes, keeping its interest on excess reserves at -0.1%, as expected.
Today’s economic data will include Existing Home Sales for February (Briefing.com consensus 6.20 million) and the Conference Board’s Leading Economic Index for February at 10:00 a.m. ET.
In U.S. Corporate news:
- FedEx (FDX 219.95, -8.03): -3.5% after missing EPS estimates on above-consensus revenue. FedEx reaffirmed FY22 EPS guidance.
- Boeing (BA 191.35, +1.16): +0.6% amid news that it’s in discussions with Delta (DAL 36.77, -0.38, -1.0%) for 100 737 Max jets, according to Reuters .
- GameStop (GME 81.35, -6.35): -7.2% after reporting an EPS loss, overshadowing its revenue miss.
- StoneCo Ltd. (STNE 12.35, +2.74): +28.5% after beating revenue estimates and appointing COOs for its Financial Platform and Software divisions.
Reviewing overnight developments:
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Equity indices in the Asia-Pacific region ended the week on a higher note while India’s Sensex was closed for Holi. Japan’s Nikkei: +0.7% (+6.6% for the week) Hong Kong’s Hang Seng: -0.4% (+4.2% for the week) China’s Shanghai Composite: +1.1% (-1.8% for the week) India’s Sensex: CLOSED (+4.2% for the week) South Korea’s Kospi: +0.5% (+1.7% for the week) Australia’s ASX All Ordinaries: +0.7% (+3.2% for the week).
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In economic data:
- Japan’s February National CPI 0.4% m/m (last 0.0%); 0.9% yr/yr (last 0.5%). February National Core CPI 0.6% yr/yr, as expected (last 0.2%). January Tertiary Industry Activity Index -0.7% m/m (last 0.1%)
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In news:
- Japan’s energy prices increased 20.5% yr/yr in February, representing the fastest increase since 1981.
- The leader of Japan’s opposition called for appointing a governor to the Bank of Japan who can steer policy toward an exit from stimulus.
- The Bank of Japan made no policy changes, keeping its interest on excess reserves at -0.1%.
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Major European indices are on track for a lower finish to a solid week. STOXX Europe 600: -0.4% (+4.1% week-to-date) Germany’s DAX: -1.6% (+3.9% week-to-date) U.K.'s FTSE 100: -0.8% (+2.3% week-to-date) France’s CAC 40: -1.3% (+4.2% week-to-date) Italy’s FTSE MIB: -0.8% (+3.9% week-to-date) Spain’s IBEX 35: -0.9% (+2.5% week-to-date).
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In economic data:
- Eurozone’s January trade deficit EUR27.20 bln (last deficit of EUR4.80 bln). Q4 wages 1.5% yr/yr (last 2.2%) and Q4 labor cost index 1.9% yr/yr (last 2.3%)
- Italy’s January trade deficit EUR5.052 bln (last surplus of EUR1.103 bln)
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In news:
- European Central Bank policymaker Knot noted that persistent weakening in the euro could worsen energy inflation in the short term.
- Norway lowered its non-oil GDP growth forecast for 2022 to 3.6% from 4.1% while the outlook for 2023 was increased to 2.5% from 2.4%.
- Standard & Poor’s lowered Russia’s sovereign rating to CC from CCC-.
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U.S. equity futures:
- S&P 500 Futures: -31 @ 4,381
- DJIA Futures: -211 @ 34,269
- Nasdaq 100 Futures: -111 @ 14,007
Overseas:
- Europe: DAX -1.6%, FTSE -0.8%, CAC -1.3%
- Asia: Nikkei +0.7%, Hang Seng -0.4%, Shanghai +1.1%
Commodities:
- Crude Oil +0.47 @ 103.45
- Nat Gas -0.132 @ 4.858
- Gold -3.15 @ 1940.05
- Silver -0.181 @ 25.435
- Copper +0.0048 @ 4.7068