Morning Markets

March S&P 500 futures (ESH23) this morning are up +0.26%, and March Nasdaq 100 E-Mini futures (NQH23) are up +0.45%.

U.S. stock index futures this morning are moderately higher.  Apple is up more than +1% in pre-market trading to lead technology stocks higher after Goldman Sachs initiated coverage on the stock with a buy rating.   Also, a decline in bond yields supports gains in stock indexes, with the 10-year T-note yield down -5.7 bp to 3.895%.

Limiting gains in stock index futures were concerns about global growth.  Chinese leaders at the annual National People’s Congress set a lower-than-expected 5% GDP target for China this year, which implies China is unlikely to add large-scale stimulus to boost economic growth.

Positive corporate news today is giving the overall market a boost.  Ciena is up more than +9% in pre-market trading after reporting stronger-than-expected Q1 revenue.  Also, Merck & Co, HashiCorp, and Vir Biotechnology are up at least 1% after being upgraded.

On the negative side, energy stocks and energy service providers declined in pre-market trading as WTI crude fell more than -1% on Chinese energy demand concerns.  Also, Silvergate Capital Corp is down more than -3% after Moody’s Investors Service cut the company’s long-term issuer rating to Ca from B3, with the potential for another cut.  In addition, DR Horton is down more than -2% after being downgraded.

Overseas stock markets are mixed.  The Euro Stoxx 50 today is up +0.34%.  China’s Shanghai Composite stock index closed down -0.19%, and Japan’s Nikkei Stock Index closed up +1.11%. 

The Euro Stoxx 50 index today climbed to a 13-3/4 month high and is moderately higher.  Gains in travel and consumer product stocks are leading the overall market higher. Also, a decline in government bond yields supports stocks, with the 10-year German bund yield down -5.4 bp to 2.661%.  However, limiting stock gains was today’s economic news that showed Eurozone Jan retail sales rose less than expected, and the Eurozone Mar Sentix investor confidence index unexpectedly declined. 

Eurozone Jan retail sales rose +0.3% m/m, weaker than expectations of +0.6% m/m.

The Eurozone Mar Sentix investor confidence index unexpectedly fell -3.1 to -11.1, weaker than expectations of -5.5.

China’s Shanghai Composite today fell back from a 7-3/4 month high and closed slightly lower.  Chinese stocks gave up an early advance and turned lower after Chinese leaders at the National People’s Congress announced a modest economic growth target of around 5% this year and avoided mentioning any plans for large stimulus measures.  Property and real estate stocks were under pressure after Premier Li Keqiang said the government would prevent “unregulated” expansion in the property market to promote its stable development.  On the positive side, Chinese telecommunication stocks moved higher after China’s Ministry of Industry and Information Technology said it’s working with other nations to accelerate the development of 6G networks. 

Chinese Premier Li Keqiang announced a GDP growth target for China this year at around 5%, below expectations of above 5% and below the 2022 target of around 5.5%.

Japan’s Nikkei Stock Index today rallied to a 3-month high and closed moderately higher.  Japanese utility stocks gained after NHK reported  Japan’s Nuclear Regulation Authority determined that Hokuriku Electric’s Shika number 2 nuclear reactor in Ishikawa prefecture isn’t on an active fault.  Sony climbed more than +3% after analysts highlighted the growth prospects for the company.  Japan Airlines and Renesas rallied after it was announced that they would be added to the Nikkei 225 Stock Index as of the March 31 close.  In addition, exporter stocks rose today as the yen weakened against the dollar. 

Pre-Market U.S. Stock Movers

Apple (AAPL) is up more than +1% in pre-market trading after Goldman Sachs initiated coverage on the stock with a buy rating, saying the company’s growing installed base of users underpins the “Apple-as-a-Service” opportunity. 

Ciena (CIEN) rallied more than +9% in pre-market trading after reporting Q1 revenue of $1.06 billion, well above the consensus of $958.1 million. 

Merck & Co (MRK) gained nearly +1% in pre-market trading after Jeffries initiated a buy rating on the stock, saying the company finds itself in the “sweet spot” of execution and value. 

HashiCorp (HCP) climbed more than +3% in pre-market trading after Needham & Co. upgraded the stock to buy from hold. 

Vir Biotechnology (VIR) jumped more than +4% in pre-market trading after JPMorgan Chase upgraded the stock to overweight from neutral. 

Aramark (ARMK) rose more than +5% in pre-market trading, and Hilton Grand Vacations (HGV), Axalta Coating Systems (AXTA), and Valaris (VAL) rose more than +4% after S&P Dow Jones Indices said the companies would join the S&P MidCap 400 prior to the open of trading on March 20. 

DR Horton (DHI) fell more than -2% in pre-market trading after JPMorgan Chase downgraded the stock to neutral from overweight.

Silvergate Capital Corp (SI) dropped more than -3% in pre-market trading after the company closed its crypto payments network and Moody’s Investors Service cut the company’s long-term issuer rating to Ca from B3, with the potential for another cut. 

Freeport McMoRan (FCX) slid more than -1% in pre-market trading as copper prices dropped more than -1% on Chinese industrial metals demand concerns after Chinese leaders didn’t announce any significant new stimulus measures at the National People’s Congress.

Energy stocks and energy service providers declined in pre-market trading as WTI crude fell more than -1% on Chinese energy demand concerns after Chinese Premier Li Kequiang announced a GDP target for China this year of around 5%, weaker than expectations of at least 5.5%.  Conoco Phillips (COP), Devon Energy (DVN), Diamondback Energy (FANG), Haliburton (HAL), Occidental Petroleum (OXY), and Valero Energy (VLO) are down at least 1%

Today’s U.S. Earnings Reports (3/6/2023)

Ciena Corp (CIEN), Guidewire Software Inc (GWRE), Nutanix Inc (NTNX).

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On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.