Wednesday February 9th


Stock futures rise ahead of more big earnings reports

U.S. stock index futures rose in early morning trading on Wednesday as investors digested another batch of corporate earnings and tech shares looked to build on their rebound. Dow futures rose 247 points, or 0.7%. S&P 500 futures gained nearly 1% and Nasdaq 100 futures rose 1.4%. Tech stocks appeared poise to outperform on Wednesday, with chipmaker Advanced Micro Devices rising more than 1% after an upgrade from Daiwa Capital Markets. E-commerce stocks including Amazon and Shopify were pushing higher in premarket trading. Through Tuesday’s close, the Nasdaq Composite has gained more than 6% from its recent low on Jan. 27 after falling into correction territory earlier this year. On the earnings front, Chipotle rose more than 6% in after-hours trading on the back of its strong earnings, while Lyft tumbled nearly 4% after announcing it had fewer active riders than in the prior quarter. Solar stock Enphase Energy surged 20% in premarket trading after the company beat estimates on the top and bottom lines for the fourth quarter and delivered upbeat guidance. Bond yields cooled off Wednesday amid a dramatic surge in 2022, possibly giving a boost to tech. The benchmark 10-year Treasury note most recently yielded 1.93% after touching 1.97% on Tuesday. Mortgage applications dropped 10% week over week, however, as the rise in interest rates in recent months appears to have dampened demand among homebuyers. Yields have risen this year in part because of a more aggressive stance from the Federal Reserve. Atlanta Fed President Raphael Bostic told CNBC on Wednesday that three rate hikes are possible this year but that the central bank is not locked in to any path and will watch how the economy responds. Elsewhere, Peloton continued its rebound, rising more than 4% premarket the day after the company announced a restructuring plan that will include layoffs and the removal of its CEO. Despite a bumpy road, shares of the interactive fitness company are now positive year to date after soaring more than 25% in Tuesday trading. On Tuesday, the Dow Jones Industrial Average added more than 370 points, helped by a 7.8% pop in Amgen on the back of its strong earnings report. The S&P 500 also registered a gain, climbing 0.8%. The technology-focused Nasdaq Composite rose 1.3%. A handful of strong corporate earnings boosted sentiment on Tuesday, after a slow start to the week. Harley-Davidson, Chegg, DuPont and Centene all rose after reporting better-than-expected earnings. As of the closing bell on Tuesday, nearly 60% of all S&P 500 companies have reported fourth-quarter earnings and roughly 77% have topped Wall Street’s earnings estimates, according to FactSet. “We are wrapping up a very solid earnings season,” said Ryan Detrick of LPL Financial. “Sure, we had a high-profile blowup at Facebook, but overall we’ve seen impressive news from corporate America.” Disney, Mattel, MGM Resorts and Uber Technologies will release results after the bell on Wednesday. Investors are also preparing for Thursday’s Consumer Price Index report, which will give an update on the inflation picture. The Fed has already signaled a monetary policy pivot in order to address the historically high price increases. The CPI report “has had a big bullseye on it all week and the truth is that headline number will likely be one of the highest we’ve ever seen,” Detrick said. “Now the good news is we are likely close to a major peak in inflation and this number very well could be the peak. We’ve seen some improvements in supply chains lately and this is the first clue we are nearing a peak in inflation as well.” The inflation data is estimated to show that prices rose 0.4% in January, for a 7.2% gain from one year ago, according to Dow Jones. Shares in Asia-Pacific rose in Wednesday trade, with stocks in Hong Kong leading gains regionally. The Hang Seng index in Hong Kong soared 2.06% to close at 24,829. Mainland Chinese stocks rose on the day, with the Shanghai composite up 0.79% to 3,479.95 and the Shenzhen component advancing 1.545% to 13,531.31. In Japan, the Nikkei 225 closed 1.08% higher at 27,579.87 while the Topix index climbed 0.94% to 1,952.22. South Korea’s Kospi finished its trading day 0.81% day higher at 2,768.85. Oil prices were stable around $90 a barrel on Wednesday but the prospect of increased supply from Iran and the United States kept pressure on the market. Brent crude futures edged down 34 cents, or 0.4%, to $90.44 per barre. U.S. West Texas Intermediate crude fell 42 cents, or 0.5%, to trade at $88.93 per barrel. The contracts slid about 2% on Tuesday as Washington resumed indirect talks with Iran to revive a nuclear deal. Gold prices were little changed on Wednesday as a pullback in U.S. Treasury yields ahead of a widely expected robust inflation data out of the United States kept bullion investors on the edge. Spot gold was up 0.1% at $1,827.20 per ounce, trading in a narrow $5 range. U.S. gold futures were steady at $1,828.40. Spot gold prices are attempting to retest the $1,830 resistance region that has repelled bullion bugs on several occasions since July 2021, said Extinity analyst Han Tan.