Morning: Seeking direction as market digests a cross current of factors

The S&P 500 futures trade seven points, or 0.1%, above fair value as the market struggles for direction on this last day of the first quarter. The benchmark index enters the session down 3.4% for the quarter but up 5.2% this month.

Oil prices are on the retreat, hovering just above $100.00 per barrel ($101.37, -6.42, -5.9%), on news that President Biden will announce plans to release one million barrels of oil per day from strategic reserves to help keep gas prices down. The release could last for months.

Lingering growth concerns might also be a contributing factor after China’s Manufacturing PMI dipped into contraction territory for the first time since October and reports indicated that Shanghai will enter phase two of its coronavirus lockdown. Equity markets in Asia closed modestly lower on Thursday.

U.S. Treasury yields are trading lower across the curve but more so on the shorter end. The 2-yr yield is down five basis points to 2.28%, and the 10-yr yield is down four basis points to 2.32%. The U.S. Dollar Index is up 0.4% to 98.19.

On the data front, investors will receive Personal Income (Briefing.com consensus 0.5%) and Personal Spending (Briefing.com consensus 0.5%) for February, PCE Prices for February (Briefing.com consensus 0.6%), and weekly Initial Claims (Briefing.com consensus 200,000) at 8:30 a.m. ET, followed by the Chicago PMI for March (Briefing.com consensus 56.8) at 9:45 a.m. ET.

In U.S. Corporate news:

  • Walgreens Boots Alliance (WBA 47.11, -0.35): -0.7% despite beating top and bottom-line estimates.
  • UiPath (PATH 24.74, -4.30): -14.8% after guiding revenue for fiscal Q1 and FY23 below consensus, overshadowing its better-than-expected fiscal Q4 results.
  • Advanced Micro Devices (AMD 116.76, -2.46): -2.1% after the stock was downgraded to Equal Weight from Overweight at Barclays.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Thursday on a mostly lower note. Japan‚Äôs Nikkei: -0.7% Hong Kong‚Äôs Hang Seng: -0.8% China‚Äôs Shanghai Composite: -0.4% India‚Äôs Sensex: -0.2% South Korea‚Äôs Kospi: +0.4% Australia‚Äôs ASX All Ordinaries: -0.1%.

    • In economic data:

      • China‚Äôs March Manufacturing PMI 49.5 (expected 49.9; last 50.2) and March Non-Manufacturing PMI 48.4 (last 51.6)
      • Japan‚Äôs February Industrial Production 0.1% m/m (expected 0.5%; last -0.8%). February Housing Starts 6.3% yr/yr (expected 1.1%; last 2.1%) and Construction Orders -2.3% yr/yr (last 11.0%)
      • South Korea‚Äôs February Industrial Production 0.6% m/m (last 0.3%); 6.5% yr/yr (expected 4.5%; last 4.2%). February Retail Sales 0.1% m/m (last -1.9%). April Manufacturing BSI Index 83 (last 91)
      • Australia‚Äôs February Building Approvals 43.5% m/m (expected 10.0%; last -27.1%) and Private House Approvals 16.5% m/m (last -16.3%)
      • Hong Kong‚Äôs February Retail Sales -14.6% yr/yr (last 4.1%)
    • In news:

      • Shanghai is reportedly remaining under a coronavirus lockdown.
      • China‚Äôs Manufacturing PMI dipped into contraction for the first time since October.
      • Japan is reportedly considering a JPY2 trln stimulus package.
      • The Bank of Japan continued its fixed rate buying operations.
  • Major European indices trade in the red. STOXX Europe 600: -0.2% Germany‚Äôs DAX: -0.4% U.K.'s FTSE 100: -0.4% France‚Äôs CAC 40: -0.6% Italy‚Äôs FTSE MIB: -0.2% Spain‚Äôs IBEX 35: -0.4%.

    • In economic data:

      • Eurozone‚Äôs February Unemployment Rate 6.8% (expected 6.7%; last 6.9%)
      • Germany‚Äôs February Retail Sales 0.3% m/m (expected 0.5%; last 2.0%); 7.0% yr/yr (expected 6.1%; last 10.4%). March Unemployment Change -18,000 (expected -20,000; last -33,000) and Mach Unemployment Rate 5.0%, as expected (last 5.0%)
      • U.K.'s Q4 GDP 1.3% qtr/qtr (expected 1.0%; last 0.9%); 6.6% yr/yr (expected 6.5%; last 6.9%). March Nationwide HPI 1.1% m/m (expected 0.8%; last 1.7%); 14.3% yr/yr (expected 13.5%; last 12.6%)
      • France‚Äôs March CPI 1.4% m/m (expected 1.3%; last 0.8%); 4.5% yr/yr (expected 4.3%; last 3.6%). February PPI 1.1% m/m (last 4.7%) and February Consumer Spending 0.8% m/m (expected 1.2%; last -2.0%)
      • Italy‚Äôs March CPI 1.2% m/m (expected 0.9%; last 0.9%); 6.7% yr/yr (expected 6.4%; last 5.7%). February Unemployment Rate 8.5% (expected 8.7%; last 8.6%)
      • Swiss February Retail Sales 12.8% yr/yr (last 5.7%)
    • In news:

      • Russia is reportedly set to implement a law requiring that payments for gas be made in rubles, starting tomorrow.
      • Bank of Italy Governor Visco said that rate hikes will not take place before the end of the ECB‚Äôs quantitative easing program.
      • France and Italy reported hotter than expected flash inflation readings for March.

U.S. equity futures:

  • S&P 500 Futures: UNCH @ 4,602
  • DJIA Futures: -20 @ 35,209
  • Nasdaq 100 Futures: +32 @ 15,104

Overseas:

  • Europe: DAX -0.4%, FTSE -0.4%, CAC -0.6%
  • Asia: Nikkei -0.7%, Hang Seng -0.8%, Shanghai Composite -0.4%

Commodities:

  • Crude Oil -5.75 @ 102.09
  • Nat Gas -0.100 @ 5.505
  • Gold -3.40 @ 1930.10
  • Silver -0.073 @ 25.040
  • Copper -0.0013 @ 4.7492
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