Morning: Muted action in futures with Russia-Ukraine situation remaining the focal point

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The S&P 500 futures trade four points, or 0.1%, below fair value as the market remains mindful of the Russia-Ukraine situation while investors review the latest earnings reports.

According to CNN , the U.S. is alleging that Russia has added approximately 7,000 troops near Ukraine, bringing its total to over 150,000, despite the country’s claims about a partial withdrawal. In turn, the 10-yr yield is down four basis points to 2.01%, and gold prices are up 0.9% to $1887.50/ozt. Oil prices ($91.77, -1.89, -2.0%), however, are down 2%.

The 2-yr yield, meanwhile, is down two basis points to 1.50% after touching 1.60% yesterday. The retracement suggests that the Fed’s policy shift might be priced in or that the geopolitical risks might play a factor in the Fed refraining from a 50-bps hike in March. The U.S. Dollar Index is up 0.1% to 95.75.

In earnings news, Dow components Walmart ( WMT 136.88, +3.35, +2.5%) and Cisco ( CSCO 55.82, +1.57, +2.9%) are up more than 2.0% in pre-market action after beating EPS estimates and announcing new share-repurchase plans. NVIDIA ( NVDA 259.44, -5.67, -2.1%) is heading the other way despite exceeding expectations and guiding Q1 revenue above consensus.

On the data front, investors will receive Housing Starts (Briefing.com consensus 1.705 million) and Building Permits (Briefing.com consensus 1.750 million) for January, weekly Initial Claims (Briefing.com consensus 220,000), and the Philadelphia Fed Index for February (Briefing.com consensus 20.4) at 8:30 a.m. ET.

In U.S. Corporate news:

  • NVIDIA (NVDA 259.44, -5.67): -2.1%% despite beating top and bottom-line estimates and guiding Q1 revenue above consensus. The company said supply remains constrained, but expects incremental improvements throughout FY23. NVDA was downgraded to Hold from Buy at Summit Insights.
  • Walmart (WMT 136.88, +3.35): +2.5% after beating top and bottom-line estimates and announcing plans to repurchases shares by at least $10 billion in FY23.
  • Cisco (CSCO 55.82, +1.57): +2.9% after beating EPS estimates and approving a new $15 billion share repurchase authorization. Cisco provided in-line guidance for fiscal Q3 and FY22.
  • DoorDash (DASH 118.09, +23.20): +24.5% after beating revenue estimates and providing an encouraging outlook. The company missed EPS estimates.
  • Fastly (FSLY 19.90, -9.03): -31.2% after issuing downside guidance for Q1/FY22 EPS and FY22 revenue. Fastly beat top and bottom-line estimates.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note. Japan’s Nikkei: -0.8% Hong Kong’s Hang Seng: +0.3% China’s Shanghai Composite: +0.1% India’s Sensex: -0.2% South Korea’s Kospi: +0.5% Australia’s ASX All Ordinaries: UNCH.

    • In economic data:
      • Japan’s December Core Machinery Orders 3.6% m/m (expected -1.8%; last 3.4%); 5.1% yr/yr (expected 0.6%; last 11.6%). January trade deficit JPY2.19 trln (expected deficit of JPY1.61 trln; last deficit of JPY583.30 bln). January Imports 39.6% yr/yr (expected 37.1%; last 41.1%) and Exports 9.6% yr/yr (expected 16.5%; last 17.5%)
      • Singapore’s Q4 GDP 10.7% qtr/qtr (last 10.7%); 6.1% yr/yr (expected 6.2%; last 5.9%). January trade surplus SGD5.022 bln (last surplus of SGD4.992 bln)
      • Australia’s January Employment Change 12,900 (expected -15,000; last 64,800) and full employment change -17,000 (last 41,500). January Unemployment Rate 4.2%, as expected (last 4.2%) and Participation Rate 66.2% (expected 66.0%; last 66.1%)
    • In news:
      • Japan raised its machine orders assessment to indicate that orders are picking up. Meanwhile, the country’s January trade deficit was at its widest level in eight years.
      • Press reports indicate that more than half of Japanese companies plan to raise overall pay, including bonuses, in FY22/23, while 66% of companies have no plans to raise base pay and will make decisions based on merit.
      • Hana Financial expects that the Bank of Korea will raise its base rate to 2.00% by the end of the year.

  • Major European indices trade on a mostly lower note. STOXX Europe 600: -0.1% Germany’s DAX: UNCH U.K.'s FTSE 100: -0.6% France’s CAC 40: +0.2% Italy’s FTSE MIB: -0.2% Spain’s IBEX 35: -0.2%.

    • In economic data:
      • Italy’s January trade surplus EUR1.103 bln (last surplus of EUR4.179 bln)
      • Spain’s January trade deficit EUR5.30 bln (last deficit of EUR4.20 bln)
      • Swiss January trade surplus CHF3.177 bln (last surplus of CHF3.544 bln)
    • In news:
      • Reports of shelling in the Donbass region of Eastern Ukraine have weighed on sentiment even though this region has been a conflict area since 2014.
      • The Italian government is reportedly planning a EUR1 bln annual subsidy to the auto sector.
      • European Central Bank policymaker de Cos said that premature tightening of policy would add to negative consequences and that medium-term inflationary expectations need to be assessed.

U.S. equity futures:

  • S&P 500 Futures: -11 @ 4,464
  • DJIA Futures: -69 @ 34,866
  • Nasdaq 100 Futures: -50 @ 14,553

Overseas:

  • Europe: DAX UNCH, FTSE -0.6%, CAC +0.2%
  • Asia: Nikkei -0.8%, Hang Seng +0.3%, Shanghai Composite +0.1%

Commodities:

  • Crude Oil -1.61 @ 92.05
  • Nat Gas -0.090 @ 4.627
  • Gold +16.70 @ 1888.20
  • Silver +0.055 @ 23.660
  • Copper -0.0135 @ 4.5230
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