March S&P 500 futures (ESH23) are trending up +0.06%, and March Nasdaq 100 E-Mini futures (NQH23) are up +0.37% this morning as investors look ahead to crucial U.S. inflation data due this week for more clarity on the Federal Reserve’s rate hike path. 

In Friday’s trading session, the Dow and the S&P 500 settled in the green, driven primarily by a rally in energy stocks as the prices of WTI crude oil jumped over +2% on Russia’s plans to cut oil production by 500,000 bpd in March. However, the Nasdaq fell to a 1-week low as higher bond yields put rate-sensitive stocks under pressure.

The University of Michigan’s preliminary data on Friday showed that U.S. consumer sentiment rose to a 13-month high of 66.4 in February, while one-year inflation expectations rose to 4.2% in February, above a forecast of 4.0%.

Philadelphia Fed President Harker said on Friday that the Fed needs to get the fed funds rate above 5% and stay there for a while to get inflation firmly under control.

“Developed market labor markets have tightened in recent months against our expectations of easing. The latest news reinforces the conviction that we are not on a soft-landing path and that a recession will eventually be necessary to bring inflation back to central bank comfort zones,” said Bruce Kasman, a head of economic analysis at JPMorgan. 

Fourth-quarter earnings season is winding down, but still, major global companies like Coca-Cola (KO), Cisco Systems Inc (CSCO), Paramount Group Inc (PGRE), and Deere & Company (DE) are set to report results this week.

In the coming week, U.S. CPI data for January will be the main highlight as investors look for additional clues on the Federal Reserve’s monetary policy trajectory. In addition, market participants will be eyeing a spate of economic data, including the U.S. Core CPI, Core Retail Sales, NY Empire State Manufacturing Index, Retail Sales, Industrial Production, Manufacturing Production, Business Inventories, Crude Oil Inventories, Building Permits (preliminary), Core PPI, Housing Starts, Initial Jobless Claims, Philadelphia Fed Manufacturing Index, PPI, Export Price Index, and Import Price Index.

The U.S. economic data slate is mainly empty on Monday. However, investors will likely focus on a speech from Federal Reserve Governor Michelle Bowman at the American Bankers Association Conference for Community Bankers.

In the bond markets, United States 10-Year rates are at 3.738%, down -0.14%.

The Euro Stoxx 50 futures are up +0.14% this morning, led by gains in defense and travel and leisure stocks. However, those gains are likely to be limited as investors remain cautious ahead of the U.S. inflation update. In corporate news, shares of Smiths Group Plc (SMIN.LN) rose over +1% after Goldman Sachs initiated coverage of the stock with a buy rating.

The European economic data slate is largely empty on Monday.

Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.72%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.88%. 

China’s Shanghai Composite today closed higher as strength in industrial and real estate stocks led the overall market higher. Data over the weekend revealed that Chinese new bank loans jumped more than expected to a record 4,900.0B yuan in January as the country eased most COVID-19 curbs, heralding a rebound in economic activity in the coming months. However, inflation data released last week presented a mixed picture of a potential recovery, with the country’s manufacturing sector still struggling from rising COVID-19 infections and weak demand.

At the same time, Japan’s Nikkei 225 Stock Index closed lower as investors speculated over the next Bank of Japan Governor. Media reports suggested that the Japanese government will announce the matter as soon as this week. However, the center of attention was on whether the BOJ’s ultra-accommodative policy will be retained under the new management. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up 1.12% to 16.22.

Pre-Market U.S. Stock Movers

Ocular Therapeutix Inc (OCUL) climbed over +16% in pre-market trading after the company announced interim 10-month data from the Phase 1 OTX-TKI trial.

Fidelity National Information Services Inc (FIS) gained about +2% in pre-market trading after Reuters reported that the company plans to pursue a tax-free spin-off of its merchant business.

Zivo Bioscience Inc (ZIVO) plunged more than -14% in pre-market trading after the company announced the results from a coccidiosis trial in broiler chickens.

Blue Apron Holdings Inc (APRN) slid about -13% in pre-market trading after the company announced it might offer and sell its class A shares worth up to $70M through an “at-the-market” equity offering program.

Caterpillar Inc (CAT) dropped about -1% in pre-market trading after Baird downgraded the stock to neutral from outperform with a price target of $230, down from $290.

ZIM Integrated Shipping Services Ltd (ZIM) fell over -5% in pre-market trading after Barclays downgraded the stock to underweight from equal weight.

You can see more pre-market stock movershere

Today’s U.S. Earnings Spotlight: Monday - February 13th

DBS Group Holdings ADR (DBSDY), Cadence Design (CDNS), Arista Networks (ANET), Arch Capital (ACGL), FirstEnergy (FE), Banco Do Brasil SA (BDORY), Blue Owl Capital (OWL), Nu Holdings (NU), SolarEdge Technologies Inc (SEDG), Check Point Software (CHKP), Palantir (PLTR), Avis (CAR), Royal Gold (RGLD), Medpace Holdings (MEDP), Brixmor Property (BRX), Amkor (AMKR), MKS Instruments (MKSI), Monday.Com (MNDY), Roivant Sciences (ROIV), Kite Realty (KRG), Vornado (VNO), IAC/InterActiveCorp (IAC), Castellum ADR (CWQXY), Instructure Holdings (INST), Lend Lease (LLESY), Teradata (TDC), Albany (AIN), Blackbaud (BLKB), Treehouse Foods (THS), Otter Tail (OTTR), Bank of N.T. Butterfield Son (NTB), ANGI Homeservices (ANGI), Outset Medical (OM), Dingdong (DDL), Alexanders (ALX), Hollysys Automation Tech (HOLI), MRC Global (MRC).

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