Stock Market Update

The S&P 500 futures are up five points and are trading 0.1% above fair value, the Nasdaq 100 futures are up 30 points and are trading 0.1% above fair value, and the Dow Jones Industrial Average futures are up ten points and are trading 0.1% above fair value.

There's a positive bias in early trading as participants wait on the market-moving Employment Situation Report for February at 8:30 ET. The report follows a slate of recent data that played into the market's worries about growth. 

Semiconductor stocks are higher ahead of the open following pleasing earnings and guidance from Broadcom (AVGO), which is contributing to the early upside bias.

The 10-yr yield is down three basis points to 4.26% and the 2-yr yield is down two basis points to 3.95%.

In corporate news:

• Hewlett Packard Enterprise (HPE 14.42, -3.54, -19.7%): misses by $0.01, reports revs in-line; guides Q2 EPS and revs below consensus; guides FY25 EPS in-line; Court date for DOJ/Juniper case is July 9
• Broadcom (AVGO 198.00, +18.55, +10.3%): beats by $0.09, beats on revs; guides Q2 revs above consensus
• Costco (COST 1,006.83, -19.79, -1.9%):  misses by $0.07, reports revs in-line, adjusted comps of +9.1%
• Guidewire Software (GWRE 188.88, +1.90, +1.0%): misses by $0.01, beats on revs; guides Q3 revs above consensus; guides FY25 revs above consensus
• Walgreens Boots Alliance (WBA 11.27, +0.67, +6.5%): confirms agreement to be acquired by Sycamore Partners for $11.45/share in cash and additional potential value of up to $3.00 in cash per WBA Share
• Gap (GAP 22.60, +3.12, +16.0%): beats by $0.16, beats on revs, comps up +3%; guides FY26 revs in-line; increases dividend by 10%

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the week on a lower note. Japan's Nikkei: -2.2% (-0.7% for the week), Hong Kong's Hang Seng: -0.6% (+5.6% for the week), China's Shanghai Composite: -0.3% (+1.6% for the week), India's Sensex: UNCH (+1.6% for the week), South Korea's Kospi: -0.5% (+1.2% for the week), Australia's ASX All Ordinaries: -1.8% (-2.7% for the week).
  • In economic data:
    • China's February trade surplus $170.52 bln (expected $147.50 bln; last $104.84 bln). February Imports -8.4% yr/yr (expected 1.0%; last 1.0%) and Exports 2.3% yr/yr (expected 5.0%; last 10.7%). February FX Reserves $3.227 trln (expected $3.220 trln; last $3.209 trln)
    • South Korea's January Current Account surplus $2.94 bln (last surplus of $12.37 bln)
  • In news:
    • Japanese technology stocks are among the laggards.
    • Japan's largest trade union is seeking a 6.09% general wage hike for the year, up from last year's 5.85% increase, which was the biggest in more than 20 years.
    • There was speculation that the Bank of Japan will announce another rate hike at the end of April after a pause in March.
    • China reported a larger-than-expected trade surplus for February, but imports unexpected decreased while export growth was below expectations.
• Major European indices are on track for a lower finish to the week. STOXX Europe 600: -0.5% (-0.8% week-to-date), Germany's DAX: -1.8% (+2.1% week-to-date), U.K.'s FTSE 100: -0.5% (-1.9% week-to-date), France's CAC 40: -1.1% (-0.1% week-to-date), Italy's FTSE MIB: -0.5% (-0.1% week-to-date), Spain's IBEX 35: -0.6% (-1.3% week-to-date).
  • In economic data:
    • Eurozone's Q4 GDP 0.2% qtr/qtr (expected 0.1%; last 0.4%); 1.2% yr/yr (expected 0.9%; last 0.9%). Q4 Employment Change 0.7% yr/yr (expected 0.6%; last 1.0%)
    • Germany's January Factory Orders -7.0% m/m (expected -2.4%; last 5.9%)
    • U.K.'s February Halifax House Price Index -0.1% m/m (expected 0.5%; last 0.6%); 2.9% yr/yr (expected 3.1%; last 2.9%)
    • France's January trade deficit EUR6.5 bln (expected deficit of EUR4.1 bln; last deficit of EUR3.5 bln). January Current Account deficit EUR2.20 bln (last surplus of EUR2.60 bln)
    • Spain's January Industrial Production -1.0% yr/yr (last 2.0%)
  • In news:
    • Eurozone's Q4 GDP was revised up to 0.2% from 0.1% in the flash reading and there was some speculation that the European Central Bank could pause its rate cut campaign.
    • Bank of England policymaker Mann argued against cutting rates in a gradual fashion.
    • European Central Bank policymaker Villeroy de Galhau said that the battle with inflation is being won.