Stock Market Update

The S&P 500 futures are down 12 points and are trading 0.3% below fair value, the Nasdaq 100 futures are down 45 points and are trading 0.2% below fair value, and the Dow Jones Industrial Average futures are down 128 points and are trading 0.3% below fair value.

Contracts tied to the S&P 500, Nasdaq 100, and Dow industrials are lower, reflecting some normal profit-taking interest after another record high for the S&P 500 yesterday. 

Some earnings results since yesterday's close garnered negative responses, contributing to the downside bias. Walmart (WMT) and Carvana (CVNA) are among the names trading lower ahead of the open after disappointing results and/or guidance. 

Treasury yields are slightly lower, but that hasn't translated into support for equities. The 10-yr yield is down four basis points to 4.50% and the 2-yr yield is down two basis points to 4.25%.

In corporate news:

• Walmart (WMT 95.71, -8.29, -8.0%): beats by $0.01, reports revs in-line; guides Q1 EPS below consensus; guides FY26 EPS below consensus, increases dividend
• Palantir (PLTR 107.85, -4.56, -4.1%): The Trump administration wants Pentagon to prepare for 8% defense budget cut in each of the next 5 years, according to Washington Post (Note: Budget cuts will have to be approved through Congress)
• Alibaba (BABA 139.00, +13.21, +10.5%): beats by RMB 1.92, reports revs in-line
• Carvana (CVNA 254.12, -27.70, -9.8%): beats by $0.25, beats on revs; expects significant growth in retail units sold and adjusted EBITDA in FY25
• Toast (TOST 39.79, -0.19, -0.5%): reports Q4 results, beats prior guidance for adjusted EBITDA, beats on revs

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Thursday in the red. Japan's Nikkei: -1.2%, Hong Kong's Hang Seng: -1.6%, China's Shanghai Composite: UNCH, India's Sensex: -0.3%, South Korea's Kospi: -0.7%, Australia's ASX All Ordinaries: -1.1%.
  • In economic data:
    • South Korea's February Consumer Confidence 95.2 (last 91.2). January PPI 0.6% m/m (last 0.3%); 1.7% yr/yr (last 1.7%)
    • Hong Kong's January CPI 0.4% m/m (last 0.1%); 2.0% yr/yr (expected 1.8%; last 1.4%)
    • Australia's January Employment Change 44,000 (expected 19,400; last 60,000) and full employment change 54,100 (last -23,700). January Unemployment Rate 4.1%, as expected (last 4.0%) and Participation Rate 67.3% (expected 67.1%; last 67.2%)
  • In news:
    • President Trump touched on the tariff subject again on Wednesday. However, he also indicated that would like to reach a new trade deal with China.
    • The Chinese government will take steps to stabilize foreign investment, which has been contracting since mid-2023.
    • The People's Bank of China made no changes to its one-year and five-year loan prime rates.
    • Australia reported strong job growth for January, led by an unexpected rise in the participation rate.
• Major European indices trade on a mostly higher note with Spain's IBEX (+0.7%) seeing renewed strength. STOXX Europe 600: +0.2%, Germany's DAX: +0.4%, U.K.'s FTSE 100: -0.4%, France's CAC 40: +0.5%, Italy's FTSE MIB: +0.1%, Spain's IBEX 35: +0.7%.
  • In economic data:
    • Eurozone's December Construction Output 0.0% m/m (last 0.6%)
    • Germany's January PPI -0.1% m/m (expected 0.6%; last -0.1%); 0.5% yr/yr (expected 1.3%; last 0.8%)
    • U.K.'s February CBI Industrial Trends Orders -28 (expected -30; last -34)
    • Swiss January trade surplus CHF6.124 bln (expected surplus of CHF3.550 bln; last surplus of CHF3.480 bln)
  • In news:
    • Schneider Electric is meeting a positive reaction to its results and guidance while food retailer Carrefour is under pressure after its own results.
    • Airbus missed quarterly expectations and issued soft delivery guidance.
    • European Central Bank policymaker Stournaras said that the disinflationary process remains on track.