Stock Market Update

The S&P 500 futures are down one point and are trading roughly in-line with fair value, the Nasdaq 100 futures are up 20 points and are trading 0.1% above fair value, and the Dow Jones Industrial Average futures are down 50 points and are trading 0.1% below fair value.

Early trading is mixed and moves are limited in contracts linked to the S&P 500, Nasdaq 100, and Dow industrials. Rising market rates and more tariff talk has contributed to the mixed vibe. The 10-yr yield is up three basis points to 4.57%.

President Trump at a press conference said that the auto tariff rate will be "in the neighborhood" of 25%, but won't start until April 2, adding he is also considering tariffs on pharmaceuticals and semiconductors.

Today's economic lineup includes the weekly MBA Mortgage Applications Index, which dropped 6.6%. Housing Starts and Building Permits for January are released at 8:30 ET. The market also receives the Minutes for the January 28-29 FOMC meeting at 2:00 ET.

In corporate news:

• Arista Networks (ANET 106.21, -4.85, -4.4%): beats by $0.08, beats on revs; guides Q1 revs above consensus
• Analog Devices (ADI 231.00, +10.78, +4.9%): beats by $0.09, beats on revs; guides Q2 EPS in-line, revs in-line; raised dividend; increased share repurchase authorization; increases quarterly dividend; raises share repurchase by $10 bln
• Celanese (CE 60.56, -9.35, -13.4%): beats by $0.25, reports revs in-line
• Cadence Design (CDNS 290.50, -9.93, -3.3%): beats by $0.06, reports revs in-line; guides FY25 EPS below consensus, revs below consensus
• Occidental Petro (OXY 48.43, -0.41, -0.8%): beats by $0.12, misses on revs; quarterly dividend increased by 9%; achieves its near-term debt repayment target of $4.5 billion in the fourth quarter of 2024 and signed two agreements in the first quarter of 2025 to divest upstream assets to undisclosed buyers for a combined total of $1.2 billion
• HP Inc. (HPQ 34.17, -0.03, -0.1%): confirms a definitive agreement to acquire key AI capabilities from Humane, including their AI-powered platform Cosmos, highly skilled technical talent, and intellectual property with more than 300 patents and patent applications

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Wednesday on a mostly lower note. Japan's Nikkei: -0.3%, Hong Kong's Hang Seng: -0.1%, China's Shanghai Composite: +0.8%, India's Sensex: UNCH, South Korea's Kospi: +1.7%, Australia's ASX All Ordinaries: -0.7%.
  • In economic data:
    • China's January House Prices -5.0% yr/yr (last -5.3%). January FDI -13.4% YTD (last -27.1%)
    • Japan's December Core Machinery Orders -1.2% m/m (expected 0.4%; last 3.4%); 4.3% yr/yr (expected 6.9%; last 10.3%). January trade deficit JPY2.759 trln (expected deficit of JPY2.10 trln; last surplus of JPY132.5 bln). January Imports 16.7% yr/yr (expected 9.7%; last 1.7%) and Exports 7.2% yr/yr (expected 7.9%; last 2.8%)
    • Australia's January MI Leading Index 0.1% m/m last 0.0%). Q4 Wage Price Index 0.7% qtr/qtr (expected 0.8%; last 0.9%); 3.2% yr/yr, as expected (last 3.6%)
    • New Zealand's Q4 Input PPI -0.9% qtr/qtr (last 1.9%) and Output PPI -0.1% qtr/qtr (last 1.5%)
  • In news:
    • Chipmakers had a strong showing in South Korea amid growing expectations for the passage of the K-Chips Act that will increase tax incentives for chipmakers.
    • The Reserve Bank of New Zealand lowered its official cash rate by 50 basis points to 3.75%, as expected.
    • Governor Orr said that two more 25-basis point cuts can be expected by the middle of the year.
• Major European indices trade in the red after President Trump said yesterday that imports of cars, drugs, and chips will face a 25% tariff. STOXX Europe 600: -0.6%, Germany's DAX: -0.8%, U.K.'s FTSE 100: -0.4%, France's CAC 40: -0.7%, Italy's FTSE MIB: -0.1%, Spain's IBEX 35: -1.0%.
  • In economic data:
    • Eurozone's December Current Account surplus EUR38.4 bln (expected surplus of EUR30.2 bln; last surplus of EUR25.0 bln)
    • U.K.'s January CPI -0.1% m/m (expected -0.3%; last 0.3%); 3.0% yr/yr (expected 2.8%; last 2.5%). January Core CPI -0.4% m/m (expected -0.5%; last 0.3%); 3.7% yr/yr, as expected (last 3.2%). January Input PPI 0.8% m/m (expected 0.7%; last 0.2%) and Output PPI 0.5% m/m (expected 0.2%; last -0.2%). January House Price Index 4.6% yr/yr (expected 3.2%; last 3.3%)
  • In news:
    • EU's trade chief Sefcovic is expected to meet with trade officials from the Trump administration today.
    • European Central Bank policymaker Panetta said that signs of weakness in the eurozone economy are more persistent than what has been anticipated.