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Morning Markets

March E-Mini S&P 500 futures (ESH24) are up +0.35%, and March Nasdaq 100 E-Mini futures (NQH24) are up +0.38%, both at new all-time nearest-futures highs.

Stock index futures this morning are moderately higher and pushed to new record highs. Stocks found support after bond yields declined on reduced inflation concerns when the U.S. government’s annual CPI revisions kept Q4 U.S. core prices unrevised at 3.3% y/y.

M&A activity is supportive for stocks after Owens Corning agreed to acquire Masonite International for $3.9 billion or about $133 per share. Also, Boyd Gaming is up more than +3% in pre-market trading after reporting stronger-than-expected Q4 revenue. Nvidia is up more than +1% after Reuters reported the company is in talks with Ericsson to co-design a semiconductor chip that includes Nvidia’s graphics processing unit technology.

On the negative side, Expedia Group is down more than -13% in pre-market trading after reporting that Q4 gross bookings were below consensus. Also, Affirm Holdings is down more than -8% after forecasting weaker-than-expected full-year gross merchandise volume.

In its annual revisions, the U.S. Bureau of Labor Statistics kept the U.S. Q4 core CPI unrevised at a +3.3% annualized increase.

The markets are discounting the chances for a -25 bp rate cut at 23% at the March 19-20 FOMC meeting and 79% at the following meeting on April 30-May 1.

U.S. and European government bond yields today are lower. The 10-year T-note is down -0.6 bp at 4.148%. The 10-year German bund yield fell back from a 2-1/4 month high of 2.389% and is down -0.1 bp at 2.353%. The 10-year UK gilt yield fell back from a 2-month high of 4.092% and is down -1.1 bp at 4.040%.

Overseas stock markets are higher. The Euro Stoxx 50 is up +0.22%. China’s Shanghai Composite Index is closed for a holiday. Japan’s Nikkei Stock Index closed up +0.09%.

The Euro Stoxx 50 today eked out a new 23-year high and is slightly higher. Corporate earnings results are mixed today. Iveco Group NV is up more than +8% after the company’s guidance for 2024 adjusted industrial Ebit exceeded estimates. Also, Tesco Plc moved higher after Barclays Plc said it would acquire the company’s banking business. On the negative side, L’Oreal tumbled more than -7% after Q4 sales results missed estimates as Chinese shoppers reined in their travel spending. Also, hawkish comments from ECB Governing Council member Kazaks pushed the 10-year German bund yield up to a 2-1/4 month high and weighed on stocks when he said market expectations for an ECB rate cut this spring were too optimistic.

ECB Governing Council member Kazaks said, "At the moment, there are expectations that the ECB could cut interest rates in the spring at the March or April meetings, and I wouldn't be that optimistic."

Swaps are pricing in the chances for a -25 bp rate cut by the ECB at 10% for its next meeting on March 7 and at 55% at the following meeting on April 11.

China’s Shanghai Composite Index today was closed for the week-long Lunar New Year holiday. Chinese markets will reopen on Monday, February 19.

Japan’s Nikkei Stock Index today rallied to a 34-year high and closed slightly higher. Japanese stocks rose on positive carryover from Thursday’s rallies in the S&P 500 and Nasdaq 100 to new record highs. Also, stocks gained after the yen tumbled to a 2-1/4 month low against the dollar, boosting the earnings prospects of exporters. Dovish comments today from BOJ Governor Ueda gave equity markets a boost when he said financial conditions in Japan will remain accommodative even after the BOJ ends negative interest rates. Weakness in Japanese shipping stocks weighed on the overall market following the slump in shares of A.P. Moller-Maersk A/S after the company gave a gloomy forecast for the shipping industry this year.

BOJ Governor Ueda said, "Even if we end minus rates, the accommodative financial conditions will likely continue," based on the BOJ's economic outlook.

Swaps are pricing in the chances for a +10 bp rate increase by the BOJ at 32% for its next meeting on March 19 and at 71% for the following meeting on April 26.

Pre-market U.S. Stock Movers

Masonite International (DOOR) surged by more than +32% in pre-market trading after Owens Corning agreed to acquire the company for $3.9 billion or about $133 per share.

Cloudflare (NET) soared more than +25% in pre-market trading after reporting Q4 revenue of $362.5 million, stronger than the consensus of $353.8 million.

Boyd Gaming (BYD) climbed more than +3% in pre-market trading after reporting Q4 revenue of $954.4 million, stronger than the consensus of $930.3 million.

SentinelOne (S) rose more than +4% in pre-market trading after Trivest Advisors reported a new 2.1% stake in the company.

Nvidia (NVDA) is up more than +1% in pre-market trading after Reuters reported the company is in talks with Ericsson to co-design a semiconductor chip that includes Nvidia’s graphics processing unit technology.

Expedia Group (EXPE) sank more than -13% in pre-market trading after reporting Q4 gross bookings of $21.67 billion, weaker than the consensus of $22 billion.

Affirm Holdings (AFRM) dropped more than -8% in pre-market trading after forecasting full-year gross merchandise volume of $25.25 billion, below the consensus of $25.45 billion.

Take-Two Interactive Software (TTWO) tumbled more than -7% in pre-market trading after cutting its full-year net bookings forecast to $5.25 billion-$5.30 billion from a previous forecast of $5.45 billion-$5.55 billion, below the consensus of $5.44 billion.

Pinterest (PINS) sank more than -9% in pre-market trading after reporting Q4 revenue of $981.3 million, weaker than the consensus of $990.2 million.

Motorola Solutions (MSI) fell more than -4% in pre-market trading after forecasting 2024 adjusted EPS of $12.62-$12.72, the midpoint below the consensus of $12.68.

Earnings Reports (2/9/2024)

AMC Networks Inc (AMCX), BioVie Inc (BIVI), Blue Owl Capital Inc (OWL), Catalent Inc (CTLT), Citius Pharmaceuticals Inc (CTXR), Construction Partners Inc (ROAD), Dakota Gold Corp (DC), Embecta Corp (EMBC), Enliven Therapeutics Inc (ELVN), Essent Group Ltd (ESNT), EVI Industries Inc (EVI), Mitek Systems Inc (MITK), Mr Cooper Group Inc (COOP), Newell Brands Inc (NWL), Nurix Therapeutics Inc (NRIX), PepsiCo Inc (PEP), Proto Labs Inc (PRLB), Sensient Technologies Corp (SXT), WP Carey Inc (WPC).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.