Data Pushes US Stock Futures Lower, Tight Range Expected
US stock futures were trading in a tight range on Wednesday night, as an uptick in data pushed indices lower during the regular session. By 6:50 pm ET (11:50 pm GMT), Dow Jones and S&P 500 futures were flat while Nasdaq futures slipped 0.1%.
Discover Financial Services Reports Q4 EPS Dip; H B Fuller Company Falls
In extended deals, Discover Financial Services dipped 10.2% after the company reported Q4 EPS of $1.54, lower than the expected $2.53. Revenues were also below expectations at $4.2 billion, compared to the expected $4.11 billion. Another company, H B Fuller Company, fell 1.8% after reporting Q4 EPS of $1.32, slightly higher than the expected $1.27. However, revenues came in at $903 million, lower than the expected $930.59 million.
Economic Data Releases and Earnings Reports on Thursday
Thursday morning will see the release of several important economic data. This includes the weekly jobless claims, housing starts, and Philadelphia Fed Manufacturing Index. Raphael Bostic, the President of the Atlanta Federal Reserve, is also scheduled to speak. Additionally, several companies, including Taiwan Semiconductor Manufacturing, Truist Financial Corp, PPG Industries Inc, and JB Hunt Transport Services Inc, are set to report their quarterly results.
Concerns Arise Over Federal Reserve’s Rate Cuts Amid Strong Retail Sales
During Wednesday’s regular session, investors expressed concerns that a strong December retail sales report, indicating a robust consumer, could result in the Federal Reserve implementing fewer rate cuts than many are anticipating. Currently, markets are pricing in approximately a 56% chance of a quarter percentage point rate cut in March, according to the CME FedWatch Tool. This uncertainty in rate cuts has impacted investor sentiment and contributed to the tight range in stock futures.
Bond Market Rates Remain Steady at 4.107%
In the bond markets, rates remained steady at 4.107%. This stability in bond yields suggests that investors are cautious and looking for safe-haven investments amidst the uncertain economic and market conditions. The bond market often serves as a barometer for investor sentiment and can provide insights into market expectations for future interest rate movements.
In conclusion, US stock futures are expected to trade within a tight range due to concerns over the Federal Reserve’s rate cuts. We also saw some negative impact on specific companies like Discover Financial Services and H B Fuller Company, which reported lower-than-expected earnings. Thursday will bring important economic data releases and earnings reports, which can further influence market sentiment. Meanwhile, bond market rates have remained steady, reflecting a cautious stance from investors.
Analyst comment
Positive news: None
Negative news: Discover Financial Services reports lower-than-expected earnings
Neutral news: Data pushes US stock futures lower, tight range expected; H B Fuller Company falls; Economic data releases and earnings reports on Thursday; Concerns arise over Federal Reserve’s rate cuts amid strong retail sales; Bond market rates remain steady.
As an analyst, the market is expected to trade within a tight range due to concerns over the Federal Reserve’s rate cuts. Negative earnings reports from Discover Financial Services and H B Fuller Company may further impact market sentiment. The release of economic data and earnings reports on Thursday can influence market sentiment as well. Investors remain cautious, as reflected by the steady bond market rates.
