The S&P 500 futures trade eight points, or 0.2%, below fair value as the market digests yesterday’s FOMC decision, higher oil prices ($99.97, +4.93, +5.2%), continued curve-flattening activity in the Treasury market, and the latest Russia-Ukraine news.
Chinese stocks extended their rebound rally on Thursday, following U.S. markets higher, after China continued to pledge support for the economy. U.S. futures and European stocks, however, have stayed put today amid news that Russia said reports describing progress in peace talks are “wrong,” according to Bloomberg .
That news has helped lift oil prices while the Treasury market continues to show concerns about the Fed potentially hindering economic growth with a policy mistake. Yesterday, the Fed delivered a quarter-point hike, as expected, and signaled six more hikes this year.
The 2-yr yield is currently down three basis points to 1.94%, and the 10-yr yield is down five basis points to 2.14%. The 5-yr yield, which is down six basis points, is also trading at 2.14%. The U.S. Dollar Index is down 0.4% to 98.24.
On the data front, investors will receive Housing Starts (Briefing.com consensus 1.700 million) and Building Permits (Briefing.com consensus 1.860 million) for February, weekly Initial Claims (Briefing.com consensus 224,000), and the Philadelphia Fed Index for March (Briefing.com consensus 14.0) at 8:30 a.m. ET.
Afterwards, Industrial Production (Briefing.com consensus 0.5%) and Capacity Utilization (Briefing.com consensus 77.9%) for February will be released at 9:15 a.m. ET.
In U.S. Corporate news:
- Accenture (ACN 340.00, +15.09): +4.6% after beating top and bottom-line estimates, guiding revenue for Q3 and FY22 revenue above consensus, and raising its quarterly dividend by 10%.
- Williams-Sonoma (WSM 164.00, +11.55): +7.6% after beating EPS estimates, authorizing $1.5 billion for share buybacks, and raising its quarterly dividend by 10%. WSM provided FY23 revenue growth guidance in-line with company expectations.
- Dollar General (DG 220.00, +7.51): +3.5% after guiding FY23 EPS and revenue above consensus, outweighing its below-consensus Q1 EPS guidance.
- Lennar (LEN 89.30, +0.79): +0.9% after beating EPS estimates and authorizing $2.0 billion for share repurchases.
- Warby Parker (WRBY 27.82, +1.00): +3.7% after beating EPS estimates, although the company did guide FY22 revenue below consensus.
Reviewing overnight developments:
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Equity indices in the Asia-Pacific region ended Thursday on a higher note with Hong Kong’s Hang Seng (+7.0%) extending its rally after the Chinese government pledged to support the economy. Japan’s Nikkei: +3.5% Hong Kong’s Hang Seng: +7.0% China’s Shanghai Composite: +1.4% India’s Sensex: +1.8% South Korea’s Kospi: +1.3% Australia’s ASX All Ordinaries: +1.2%.
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In economic data:
- Japan’s January Core Machinery Orders -2.0% m/m (expected -2.2%; last 3.1%); 5.1% yr/yr (expected 8.1%; last 5.1%)
- Australia’s February Employment Change 77,400 (expected 37,000; last 12,900) and full Employment Change 121,900 (last -17,000). February Unemployment Rate 4.0% (expected 4.1%; last 4.2%) and Participation Rate 66.4% (expected 66.3%; last 66.2%)
- New Zealand’s Q4 GDP 3.0% qtr/qtr (expected 3.2%; last -3.7%); 3.1% yr/yr (expected 3.3%; last -0.3%)
- Singapore’s February trade surplus $8.325 bln (last surplus of $5.068 bln). February non-oil exports -2.8% m/m (expected -0.3%; last 5.0%)
- Hong Kong’s February Unemployment Rate 4.5% (last 3.9%)
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In news:
- The Chinese government continued to pledge support for the economy.
- Australia’s unemployment rate reached its lowest level since August 2008.
- Xinhua reported that China is not planning to expand property tax reform this year.
- The Bank of Japan and the Reserve Bank of Australia extended their bilateral currency swap agreement for three years.
- Hong Kong’s Monetary Authority raised its base rate by 25 bps to 0.75%, as expected.
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Major European indices trade in mixed fashion. STOXX Europe 600: +0.2% Germany’s DAX: -0.6% U.K.'s FTSE 100: +0.1% France’s CAC 40: +0.2% Italy’s FTSE MIB: -0.8% Spain’s IBEX 35: -0.4%.
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In economic data:
- Eurozone’s February CPI 0.9% m/m, as expected (last 0.3%); 5.9% yr/yr (expected 5.8%; last 5.8%)
- Spain’s January trade deficit EUR6.10 bln (last deficit of EUR5.30 bln)
- Swiss February trade surplus CHF5.953 bln (last surplus of CHF3.066 bln)
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In news:
- Ukraine’s president reportedly said that talks with Russia are continuing, though they remain difficult. Russia said reports describing progress in peace talks are “wrong,” according to Bloomberg .
- Bank of France Governor Villeroy de Galhau said that he does not see the risk of a recession.
- Germany’s chemical industry association said that it no longer sees potential for growth in the industry this year.
- France sold 3- and 5-yr debt while Spain sold 3- and 10-yr debt to good demand.
- The Bank of England is expected to announce a 25-bps hike to 0.75% at the top of the hour.
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U.S. equity futures:
- S&P 500 Futures: -17 @ 4,342
- DJIA Futures: -119 @ 33,944
- Nasdaq 100 Futures: -75 @ 13,882
Overseas:
- Europe: DAX -0.6%, FTSE +0.1%, CAC +0.2%
- Asia: Nikkei +3.5%, Hang Seng +7.0%, Shanghai Composite +1.4%
Commodities:
- Crude Oil +5.80 @ 100.84
- Nat Gas +0.060 @ 4.808
- Gold +34.15 @ 1943.35
- Silver +0.880 @ 25.590
- Copper +0.0258 @ 4.6263