[ad_1]
Today’s Big Picture
Asia-Pacific equity markets finished the day lower except for Japan’s Nikkei which gained 0.31% on news of a new incoming governor to the Bank of Japan. Taiwan’s TAIEX ended the day close to flat, down a mere 0.08% while India’s SENSEX declined 0.20%, China’s Shanghai Composite fell 0.30%, South Korea’s KOSPI dropped 0.48% and Australia’s ASX All Ordinaries closed 0.84% lower. Hong Kong’s Hang Seng lost 2.01% on a broad decline led by Technology Services. By mid-day trading, European equity indices are down across the board, and U.S. futures point to a lower open.
Inflation data out this morning coupled with Russia’s move to cut oil production is renewing inflation concerns. These items seem to confirm Fed Chair Powell’s comments earlier this week predicting that the road to the Fed’s 2% target won’t be short, and there will likely be bumps along the way. Data from the Cleveland Fed’s Inflation Nowcast model suggests more measured declines in the January Consumer Price Index ahead of next week’s report for that data. As we prepare for the weekend, equities are once again staring down technical resistance ahead with investors contemplating what catalysts could drive equities through that resistance level. This leads us to think next week’s inflation data could be the next inflection point for the stock market.
Data Download
International Economy
Producer prices in Japan jumped 9.5% year-on-year in January 2023, slowing from a revised 10.5% rise in December and below expectations of 9.6%.
China’s annual inflation rate rose to 2.1% YoY in January from 1.8% in December, but slightly softer than the expected reading of 2.2%. However, January was the highest reading in 3 months, as food prices jumped, and non-food prices increased further on the back of the Lunar New Year festival and the removal of pandemic measures.
Russia said it will cut oil output by 500,000 barrels a day next month, the equivalent of 5% of its January output, following through on a threat to retaliate against Western sanctions and sending oil prices sharply higher.
Domestic Economy
At 10 AM ET, the Flash February reading for the University of Michigan Consumer Confidence Survey will be published. The consensus view sees it ticking higher to 65 from 64.9 in January.
Markets
Continued earnings misses and layoff announcements continue to take the wind out of investors’ sails. Yesterday saw the Dow decline 0.73%, the S&P 500 fall 0.88%, the Nasdaq Composite drop 1.02% and the Russell 2000 close 1.40% lower. Sectors were all down, with Communications Services (-2.19%) and Materials (-1.45%) taking the biggest hits. Relative winners yesterday included Consumer Discretionary (-0.19%) and Consumer Staples (-0.44%). Monolithic Power Systems (MPWR) leapt 10.24% after strong guidance, a dividend increase announcement, and multiple price target increases from analysts.
Here’s how the major market indicators stack up year-to-date:
- Dow Jones Industrial Average: 1.67%
- S&P 500: 6.30%
- Nasdaq Composite: 12.64%
- Russell 2000: 8.75%
- Bitcoin (BTC-USD): 31.55%
- Ether (ETH-USD): 29.11%
Stocks to Watch
Before trading kicks off for U.S.-listed equities, American Axle (AXL), Global Payments (GPN), Newell Brands (NWL), Sensient (SXT), and Spectrum Brands (SPB) will be among the companies reporting their quarterly results.
PayPal’s (PYPL) December revenue rose 6.7% YoY to $7.38 billion, a tad below the $7.39 billion consensus but the company beat bottom line expectations for the quarter. Net new active accounts in the quarter were 2.9 million, flat with the prior quarter. Entering 2023, total active accounts stood at 435 million, up 1% QoQ and 2% YoY. The company’s EPS guidance for the current quarter calls for $1.08.-$1.10 vs. the $1.07 consensus and for 2023 in full it sees EPS of $4.87 vs. the $4.76 consensus. By the end of 2023, PayPal targets having the appropriate cost structure to ensure it delivers profitable growth with consistent and healthy EPS growth.
While Lyft (LYFT) reported mixed December quarter results, it issued downside guidance for the current quarter. Exiting 2022, Lyft had 20.36 million active riders, who generated on average $57.72 during the period, up 11.5% YoY. Revenue for the current quarter is targeted at $975 million vs. the $1.1 billion consensus but EBITDA for the quarter is forecasted to be $5-$15 million vs. the adjusted EBITDA consensus of $91 million. Management chalked that weaker than expected guidance to a combination of seasonality, a decline in its Prime Time service as driver supply improves, and more competitive pricing dynamics.
Taiwan Semiconductor Manufacturing (TSM) reported its January revenue increased 3.9% MoM and 16.2% YoY to ~NT$200.05 billion.
ChipMOS Technologies (IMOS) reported its January revenue fell 14.4% MoM and 41.5% YoY to $44.3M due to continued macro weakness, customer inventory adjustments, and fewer work days in the month due to the Lunar New Year Holiday.
In a filing with the SEC, Micron (MU) said its cutting base salaries for top leaders and suspending some bonuses for fiscal 2023.
Yahoo, which is owned by private equity firm Apollo Global Management (APO), plans to lay off more than 20% of its total workforce as part of a major restructuring of its ad tech division. The cuts are expected to impact nearly 50% of Yahoo’s ad tech employees by the end of this year, including nearly 1,000 employees this week. News Corp. (NWSA) also shared it would cut 5% of its workforce, roughly 1,250 jobs, following the slump in advertising spending and higher interest rates that have impacted its business.
China e-commerce company JD.com (JD) plans to launch a ChatGPT-style product dubbed ChatJD focused on retail and finance.
IPOs
The near-term IPO calendar is relatively light, so no significant IPOs slated to price this week. However, reports suggest the IPO calendar could heat up in the coming quarters with offerings from Fogo Hospitality, Panera Brands, and Cava Group. Readers looking to dig more into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.
After Today’s Market Close
We made it! Once again it is Friday and that means no companies are expected to report their latest quarterly results after equities stop trading today. Those looking for more on which companies are reporting when, head on over to Nasdaq’s Earnings Calendar.
On the Horizon
Tuesday, February 14
- Japan: 4Q 2022 GDP
- Japan: Industrial Production & Capacity Utilization – December
- UK: Employment Change Report – December
- Eurozone: 4Q 2022 GDP
- US: NFIB Small Business Optimism Index – January
- OPEC Monthly Report
- US: Consumer Price Index – January
Wednesday, February 15
- UK: Consumer Price Index, Producer Price Index – January
- Eurozone: Industrial Production – December
- US: Weekly MBA Mortgage Applications
- US: Retail Sales – January
- US: Empire State Manufacturing Index – February
- US: Industrial Production & Capacity Utilization – January
- US: Business Inventories – December
- US: NAHB Housing Market Index – February
- US: Weekly EIA Crude Oil Inventories
Thursday, February 16
- Japan: Core Machinery Orders – December
- Japan: Imports/Exports – January
- US: Weekly Initial & Continuing Jobless Claims
- US: Housing Starts & Building Permits – January
- US: Producer Price Index – January
- US: Weekly EIA Natural Gas Inventories
Friday, February 17
- UK: Retail Sales – January
- US: Import/Export Prices – January
- US: Leading Indicators – January
Thought for the Day
“Success makes life easier. It doesn’t make living easier.” ~ Bruce Springsteen
Disclosures
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
[ad_2]
Source link
