Stock futures stagnate after inflation rout, Fed fears

IN NUMBERS

U.S. stock futures were flat on Friday, a day after a sharp sell-off prompted by stronger-than-expected inflation data and St. Louis Federal Reserve Chairman James Bullard’s call for a price hike. 100 basis points in interest rates by July 1. are three regular meetings before Bullard’s deadline, starting in March. (CNBC)

Citi economists now see the Fed making the most aggressive 50 basis point hike in March. The market expects six 25 basis point hikes this year, starting in March, to curb the surge in inflation. On Friday, Citi’s global chief economist, Citi Research, told CNBC that January’s HOT consumer inflation data was a “punch in the stomach” for the Fed. (CNBC)

* Goldman Sachs now expects 7 rate hikes by the Fed this year (CNBC Pro)
* Fed still set to take measured approach to rate hikes despite calls for more action (CNBC)

The 10-year Treasury yield fell on Friday but remained above 2%, a level hit Thursday for the first time since August 2019. The 2-year Treasury yield traded around 1.6% on Friday after jumping 26 basis points in the previous session, the biggest single-day move since 2009. Wall Street will look to Tuesday’s release of the producer price index to see if inflation at the wholesale level was also high last month. (CNBC)

If the market closes sharply lower on Friday, the Dow, S&P 500 and Nasdaq could post losses for the week. All three stock indexes were higher last week, with the S&P 500 and Nasdaq posting their best weeks of the year. The Nasdaq, still in correction, sank 2.1% on Thursday. The S&P 500 lost 1.8% and the Dow Jones fell 526 points, or nearly 1.5%. (CNBC)

IN THE NEWS TODAY

President Joe Biden is urging American citizens to leave Ukraine immediately as tensions with Russia over its military activity continue to escalate. “We’re dealing with one of the greatest armies in the world. It’s a very different situation, and things could get crazy quickly,” Biden said in an interview that aired Thursday on “NBC Nightly News.”

The United States has said Canada should use federal powers to ease growing economic disruption caused by the blocking of a vital trade route between the United States and Canada by protesters opposed to coronavirus mandates. The clogged passage, a key supply route for Detroit automakers, halted some auto production. (CNBC)

Under Armor (UAA) shares, after initially jumping 7%, fell 2.5% pre-market despite the retailer reporting fiscal fourth-quarter earnings and sales ahead of estimates on Friday. analysts said, as a cloudy outlook hampered by lingering supply chain constraints overshadowed those results. The company also warned that rising freight costs will weigh on profit margins in the coming months. (CNBC)

Shares of Zillow Group (Z) rose 13.5% in premarket Friday, the morning after the real estate website operator reported a much narrower-than-expected adjusted quarterly loss of 42 cents per share. The company’s turnover was also better than expected. Zillow said it was retiring from the homecoming business faster and more economically than it had previously anticipated. (CNBC)

Shares of Affirm (AFRM) fell another 10% premarket. The buy now, pay later company fell more than 21% on Thursday after reporting fiscal second-quarter results ahead of schedule. Affirm lost 57 cents a share on $361 million in revenue. The company said human error was to blame for the early release of results. (CNBC)

A Food and Drug Administration committee has ruled against full approval of a lung cancer treatment developed by Innovent Biologics and Eli Lilly (LLY) in China because the clinical trial was conducted only in China in participants who were not as diverse as the US population. (CNBC)

STOCKS TO MONITOR

Newell Brands (NWL) added 1.2% in premarket trading after reporting better-than-expected earnings and revenue. it also issued an optimistic earnings forecast. The company behind brands such as Mr. Coffee, Crock-Pot and Sunbeam earned an adjusted 42 cents per share for its latest quarter, 10 cents above estimates.

Expedia (EXPE) earned an adjusted $1.06 per share for its latest quarter, beating the consensus estimate of 69 cents, although the travel services company’s revenue was just below analysts’ forecasts. Expedia said the Covid-related impact on travel bookings was significant, but less severe and for a shorter duration than previous waves of Covid. Expedia grew 4.6% in premarket trade.

Aurora Cannabis (ACB) reported better-than-expected cannabis sales in its latest quarter, the first time it was able to beat analyst estimates in more than a year. Aurora posted a quarterly loss of $59 million, significantly less than a year earlier. The stock slid 4.6% in premarket stock.

Zendesk (ZEN) has rejected a $127 to $132 per share takeover bid from a group of private equity firms. The software development company said it would press ahead with its plan to acquire SurveyMonkey parent company Momentive Global (MNTV), despite pressure from activist investor Jana Partners to drop the deal. Zendesk was up 2.7% in pre-release, while Momentive Global jumped 7.9%.

GoDaddy (GDDY) beat estimates by 11 cents with adjusted quarterly earnings of 52 cents per share and better-than-expected revenue. The cloud computing company also announced a $3 billion share buyback program. GoDaddy jumped 5.8% pre-release.

Yelp (YELP) more than doubled the consensus estimate of 14 cents by reporting quarterly earnings of 30 cents per share. The operator of the online review site also reported better-than-expected revenue thanks to the strength of its advertising business. Yelp jumped 4.5% in the premarket action.

Cedar Fair (FUN) gained 2.8% in premarket trading following a Bloomberg report that private equity firm Centerbridge Partners acquired a 5% stake. The theme park operator is currently considering a $3.4 billion takeover bid from SeaWorld Entertainment (SEAS).

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