Stock Market Update

Equity futures point to a higher opening this morning as the market attempts to stabilize after three consecutive losing sessions for the S&P 500. 

Yesterday the major averages all finished more than 1.0% lower, with significant losses across mega-cap and tech names leading a retreat that encompassed all but a couple of defensive sectors. 

Amazon (AMZN 204.70, -17.99, -8.1%) is the latest mega-cap stock to come under pressure after guiding for a massive capital expenditure plan in its earnings report. The company expects to spend around $200 billion in cap-ex across 2026, a similar figure to that of Alphabet (GOOG 327.94, -3.39, -1.0%), which shed heftier losses to close modestly lower yesterday after its own earnings report. Amazon, however, modestly missed EPS expectations. 

The massive spending plans are viewed as a positive for stocks across the AI infrastructure landscape, contributing to a rebound after several days of sharp losses. 

Bitcoin is also on the rebound this morning after testing the $60,000 mark and then moving higher overnight. 

In other news, The Wall Street Journal reports that the U.S. and Iran have met for nuclear discussions. 

On the data front, market participants will receive the preliminary University of Michigan Consumer Sentiment Index for February (Briefing.com consensus 54.3) at 10:00 a.m. ET, and the December Consumer Credit Report (Briefing.com consensus $8.4 billion) at 3:00 p.m. ET.

In corporate news:

• Amazon (AMZN 204.70, -17.99, -8.1%) missed EPS expectations by $0.02, reported revenues in-line, and guided Q1 revenues in-line. 
• Anthropic enhancements impacted the software development industry, according to The Wall Street Journal. 
• Intel (INTC 49.23, +0.99, +2.1%) and Advanced Micro Devices (AMD 197.40, +4.90, +2.6%) told customers in China that there will be long waits for CPUs, according to Reuters. 
• Reddit (RDDT 163.80, +12.75, +8.4%) beat EPS expectations by $0.30, beat revenue expectations, guided Q1 revenues above consensus, and authorized a share repurchase program of up to $1 billion. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the week on a mixed note. Japan's Nikkei: +0.8%, Hong Kong's Hang Seng: -1.2%, China's Shanghai Composite: -0.3%, India's Sensex: +0.3%, South Korea's Kospi: -1.4%, Australia's ASX All Ordinaries: -2.2%.

In news:

• Japan's Lower House election will take place over the weekend with some speculating that the ruling coalition could win super majority.
• Reserve Bank of Australia Governor Bullock said that while inflation has fallen substantially, it will not return to target until mid-2027.
• The Reserve Bank of India left its policy rate at 5.25%, as expected.

In economic data:

• Japan's December Household Spending -2.9% m/m (expected -1.3%; last 6.2%); -2.6% yr/yr (expected -0.5%; last 2.9%). December Leading Index 110.2 (expected 109.8; last 109.9) and Coincident Indicator -0.4% m/m (last -1.0%)
• South Korea's December Current Account surplus $18.70 bln (last surplus of $12.90 bln)

Major European indices trade on a mostly higher note. STOXX Europe 600: +0.4%, Germany's DAX: +0.7%, U.K.'s FTSE 100: +0.1%, France's CAC 40: UNCH, Italy's FTSE MIB: -0.3%, Spain's IBEX 35: +1.0%.

In news:

• Stellantis is down nearly 30% after recording a EUR22.2 bln writedown due to mounting losses from its electric vehicle strategy. The company also guided for a big loss in the second half of the year.
• Societe Generale announced job cut plans.
• A few European Central Bank policymakers repeated that policy is in a good place at this time.

In economic data:

• Germany's December trade surplus EUR17.1 bln (expected surplus of EUR14.1 bln; last surplus of EUR13.6 bln). December Imports 1.4% m/m (expected 0.2%: last 0.7%) and Exports 4.0% m/m (expected 1.0%; last -2.5%). December Industrial Production -1.9% m/m (expected -0.2%; last 0.2%); -0.6% yr/yr (last 0.4%)
• U.K.'s January Halifax House Price Index 0.7% m/m (expected 0.1%; last -0.5%); 1.0% yr/yr (last 0.4%)
• France's December trade deficit EUR4.8 bln (expected deficit of EUR3.8 bln; last deficit of EUR4.0 bln) and December Current Account deficit EUR600 mln (last deficit of EUR300 mln)
• Spain's December Industrial Production -0.3% yr/yr (last 4.6%)
• Swiss January Unemployment Rate 2.9% (expected 3.0%; last 3.0%)