OPENING CALL
Stock futures pointed higher on Friday after the S&P 500 topped 5,000 for the first time during intraday trading in the previous session.
The day is light on data, but economists will keep an eye on potential revisions to inflation numbers.
Such tweaks rarely matter much, but last year they were large enough to raise questions about the inflation path.
Overseas Markets
Overseas stocks were mixed. Indexes rose in Japan, were flat in Europe and fell in Hong Kong, where trading ended early for the Lunar New Year break. Mainland Chinese markets were closed.
Premarket Movers
Affirm Holdings reported strong results, but disappointed on its full-year forecast. Shares dropped 12%.
Arm Holdings ended Thursday's session with a gain of 48% following a bullish revenue outlook and earnings that topped Wall Street expectations as it received a boost from a faster-than-expected shift to artificial intelligence. In premarket trading, the stock was down 3%.
Cloudflare reported a sharp rise in quarterly revenue. Shares were up 26%.
Expedia warned of a softening in travel and prices. Shares fell 14%.
Pinterest reported fourth-quarter revenue that slightly missed Wall Street estimates and adjusted profit of 53 cents a share that exceeded expectations by 1 cent. Shares were falling 11%.
Take-Two Interactive Software reported fiscal third-quarter adjusted revenue, or net bookings, that were in line with analysts' estimates, but the revenue guidance for the fourth quarter of between $1.27 billion to $1.32 billion missed estimates of $1.51 billion. The stock declined 7.6%.
Thursday's Post-Close Movers
Farmer Bros. swung to a profit in the fiscal second quarter, even as sales edged up less than 1%. Shares rose 13%.
Synlogic said it would cut more than 90% of its staff and cease operations after stopping its clinical trial for the genetic disorder phenylketonuria. Shares fell 56%.
Economic Insight
The Federal Reserve isn't at much risk of losing its autonomy under Donald Trump, Commerzbank said as Trump pulled closer to the Republican Party nomination and took a poll lead over incumbent Joe Biden.
Powell's term ends in 2026, and Trump could try to install a more malleable governor, Commerzbank added.
But Powell is respected, and a new nomination to lead the Fed would require Senate approval. "It therefore seems less likely that Trump will be able to put the Fed on a tight leash."
Watch For:
Canada Labour Force Survey for January; Earnings from Pepsico, Enbridge, Newell Brands, AMC Networks
Today's Top Headlines/Must Reads:
- Can Dividend Investing Rise From the Dead?
- Market May Be Too Optimistic on Fed Rate-Cut Outlook
- The Race to Succeed Goldman's CEO Just Got More Complicated
MARKET WRAPS
Forex:
Major currencies traded within familiar and relatively narrow trading ranges with no clear-cut direction, UniCredit Research said.
The DXY dollar index was flat, EUR/USD traded flat, while GBP/USD edged up.
"Range-bound activity is...set to prevail again in the absence of news from the ECB members speaking today and a break of key levels on charts."
The yen risks further weakness, however, UniCredit said.
The Japanese currency steadied against the dollar after significant losses on Thursday after comments by Bank of Japan's Uchida on the prospect of slow monetary tightening.
Annual U.S. CPI revisions--consisting of revised monthly CPI figures for the past five years--are due on Friday and are one of the key risks of the week, potentially moving the dollar, ING said.
"There is a case to be made that the market will move on today's benchmarks." An upward revision would prompt a modest back-up in short-term U.S. rates and support the dollar.
Alternatively, no material revisions could give the Fed more confidence in last year's trend of slower inflation, potentially weakening the dollar, ING said.
A fall below 104.00 could see the DXY drop towards 103.20, it said.
Energy:
Oil futures were stable, heading for weekly gains after rising over 3% on Thursday on concerns over a prolonged conflict in the Middle East.
The rally was sparked by fears of further escalation in the region after Israel rejected Hamas's proposed terms for a cease-fire in Gaza, crashing market hopes for an imminent truce and hostage-release deal.
Meanwhile, broader strength in refinery margins is providing further support to oil prices amid larger-than-expected draws in U.S. fuel stocks last week, Red Sea disruptions and refinery outages in Russia, according to analysts.
Metals:
Base metals and gold prices slipped on deflationary pressures and a strong dollar.
The firm dollar has kept a lid on any gains for gold, despite safe-haven demand as Middle East tensions continue to bubble over.
Meanwhile Chinese deflation has persisted as the economy struggles to gain momentum, with the CPI falling at the fastest pace since 2009 in January--prompting a drop in base metal prices, analysts said.
Zinc
The price of zinc has fallen too far and should claw back some of its losses in the days ahead, Sucden Financial said.
LME 3-month zinc broke below what had been a strong support level at $2,380/metric ton after China data Thursday fanned deflation fears, leading to an accelerated selloff as put options were exercised.
Iron-Ore
Iron-ore prices were holding up well given the weakness in Chinese steel demand and sentiment, Liberum said, which expects another busy restocking cycle when traders return from the Lunar New Year holiday.
TODAY'S TOP HEADLINES
Will Donald Trump Help Bud Light Win on Super Bowl Sunday?
Bud Light's days as a political football aren't over yet.
The beer, a target of the political right for much of the past year, got a surprise endorsement this past week when Donald Trump defended the brand's brewer on social media. The post came days after the former president criticized the company, and at a sensitive moment for the brewing giant.
Sam Altman Seeks Trillions of Dollars to Reshape Business of Chips and AI
Sam Altman was already trying to lead the development of human-level artificial intelligence. Now he has another great ambition: raising trillions of dollars to reshape the global semiconductor industry.
The OpenAI chief executive officer is in talks with investors including the United Arab Emirates government to raise funds for a wildly ambitious tech initiative that would boost the world's chip-building capacity, expand its ability to power AI, among other things, and cost several trillion dollars, according to people familiar with the matter. The project could require raising as much as $5 trillion to $7 trillion, one of the people said.
Garage Boxes, Memory Questions and No Crime: Inside Biden's Handling of Classified Documents
From a legal perspective, the biggest takeaway from the investigation of President Biden's handling of sensitive government documents was from the first sentence of the 345-page report: No criminal charges were warranted.
But after conducting 173 interviews with 147 witnesses-including five hours with the president over two days-investigators came away with many other nuggets about Biden and how he operates, including unflattering details already being seized upon by Republicans. Here's what to know:
Cease-Fire Emerges as Key to Israeli-Saudi Normalization
The Biden administration believes it is still possible to broker a historic normalization deal between Saudi Arabia and Israel, but the window for an agreement is closing with fighting still under way in Gaza and the U.S. presidential campaign ramping up.
Saudi Arabia won't agree to move forward until a cease-fire is in place, but talks to halt the conflict have stalled, according to U.S. and Saudi officials.
Ukraine-Israel Aid Package Clears Major Hurdle in Senate
WASHINGTON-The Democratic-controlled Senate cleared a critical hurdle toward passing a $95 billion national security-focused bill aimed at fortifying Ukraine, Israel and other allies, voting to move to debate an issue that has divided Republicans for months.
The vote was 67-32, above the 60-vote bar needed to advance most legislation in the chamber. Seventeen Republicans backed the measure, along with all but one member of the Democratic caucus. The Republican "no" votes reflected both opposition to further funding Ukraine and a desire by some to relitigate a fight over illegal immigration that has been entangled with the foreign-aid package for months.
Write to ina.kreutz@wsj.com
TODAY IN CANADA
Earnings:
Canopy Growth 3Q
Enbridge 4Q
Fortis 4Q
Magna 4Q
TELUS 4Q
Economic Calendar (ET):
0830 Jan Labour Force Survey
Stocks to Watch:
Trisura Group 4Q Rev C$755M
---
WildBrain 2Q Net C$5M; 2Q Rev C$126.3M ; 2Q EPS C$0.02; Now Expect FY24 Rev to Be Down Approximately 8% to 12% Yr Over Yr
Expected Major Events for Friday
07:00/GER: Jan CPI
09:00/ITA: Dec Industrial Production
13:30/CAN: Jan Labour Force Survey
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Friday
AMC Networks Inc (AMCX) is expected to report $0.51 for 4Q.
ASA Gold & Precious Metals Ltd (ASA) is expected to report for 4Q.
Amerityre Corp (AMTY) is expected to report for 2Q.
Barnwell Industries (BRN) is expected to report for 1Q.
Blue Owl Capital Inc (OWL) is expected to report for 4Q.
Bogota Financial Corp (BSBK) is expected to report for 4Q.
Catalent Inc (CTLT) is expected to report $-0.21 for 2Q.
Clairvest Group Inc (CVG.T) is expected to report for 3Q.
Construction Partners Inc (ROAD) is expected to report $0.13 for 1Q.
Daily Journal (DJCO) is expected to report for 1Q.
Embecta Corp (EMBC) is expected to report for 1Q.
Enbridge Inc (ENB,ENB.T) is expected to report $0.66 for 4Q.
Espey Manufacturing & Electronics Corp (ESP) is expected to report for 2Q.
Fortis Inc (FTS,FTS.T) is expected to report $0.72 for 4Q.
(MORE TO FOLLOW) Dow Jones Newswires
02-09-24 0624ET
