Wednesday, February 21, 2024

Nasdaq, S&P 500 Futures Flatline Ahead Of Housing, Consumer Data: Analyst Pins Hopes On Dollar, Fed Rates To Keep Flickering Rally Hopes Alive – Invesco QQQ Trust, Series 1 (NASDAQ:QQQ), SPDR S&P 500 (ARCA:SPY)

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Trading in the U.S. index futures suggests stocks may start Tuesday’s session slightly higher, although the mood could be cautious ahead of some key economic data on the housing market, business activity and consumer confidence.

Cues From Monday’s Trading:

U.S. stocks, which saw marked strength in early trading on Monday, gave back much of their gains following the release of stronger-than-expected pending home sales data. The Dow Industrials even briefly dipped below the unchanged line before recovering and closing modestly higher, while the S&P 500 and the Nasdaq Composite Indexes held above the flat line throughout the session.

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Traders took some consolation from a small dip in bond yields.

Most sectors, with the exception of consumer staple, financial, utility and healthcare stocks, saw modest to moderate strength.







U.S. Indices’ Performance On Monday
Index Performance (+/-)   Value
Nasdaq Composite +0.63%   11,466.98
S&P 500 Index +0.31%   3,982.24
Dow Industrials +0.22%   32,889.09

Analyst Color:

Amid the recent pause in the market rally, analysts are divided over the near-term direction. Morgan Stanley equity strategist Michael Wilson said in a report that March is likely to be a high-risk month for the bear market to resume, given his view earnings recession is far from over.

“Ultimately, we think this rally is a bull trap but recognize if these levels can hold, the equity market may have one last stand before we fully price the earnings downside,” he said. For this stand to have a chance, interest rates and the dollar need to fall, he added.

If the rates and the dollar move higher, S&P 500’s technical support will likely fall quickly, Wilson added.

Carson Group chief market strategist Ryan Detrick‘s data sifting showed that better times could be ahead. “March and April historically are two of the better months for the S&P 500,” he said. The two months have performed even better in pre-election years, he added.

Futures Today








U.S. Futures’ Performance On Tuesday
Index Performance (+/-)  
Nasdaq 100 Futures +0.18%  
S&P 500 Futures +0.16%  
Dow Futures +0.11%  
R2K Futures +0.02%  

In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust SPY gained 0.15%, to $398.33, and the Invesco QQQ Trust QQQ rose 0.16%, to $294.42, according to Benzinga Pro data.

Upcoming Economic Data:

The Commerce Department will release its provisional January wholesale and retail inventories data as well as advanced trade balance data at 8:30 a.m. EST.

Two house price reports are due at 9 a.m. EST. The Federal House Finance Agency is set to release its house prices data for December, which is expected to show a 0.2% drop on a month-over-month basis. In November, the decline was a more modest 0.1%.

The S&P/Case-Shiller 20-city composite house price index is expected to have fallen 0.5% month-over-month in December, the same pace of decline as in November.

The results of the ISM-Chicago survey of purchasing managers are due at 9:45 a.m. EST. The headline business barometer index is expected to come in at 45 in February, suggesting a continued contraction in activity.

The Conference Board’s consumer confidence index due at 10 a.m. EST is expected to show an improvement from 107.1 to 108.5.

Stocks In Focus:

Zoom Video Communications Inc. ZM shares climbed over 6.5% in premarket trading following the release of its quarterly results.

Occidental Petroleum Corp. OXY slipped about a percent after the company’s fourth-quarter earnings and revenue trailed expectations.

Workday Inc. WDAY fell over 2% in reaction to its quarterly report.

Advance Auto Parts Inc. AAP, AutoZone Inc. AZO, J.M. Smucker Company SJM, Target Corp. TGT, Norwegian Cruise Line Holding Limited NCL and Sea World Entertainment Inc. SEAS are among the noteworthy companies due to release their quarterly results ahead of the market open.

Major companies reporting after the close are HP Inc. HPQ, Novavax Inc. NVAX, Rivian Automotive Inc. RIVN, Urban Outfitters Inc. URBN, Virgin Galactic Holdings Inc. SPCE and AMC Entertainment Holdings Inc. AMC.

Commodities, Bonds, Other Global Equity Markets:

Crude oil futures were rebounding on Tuesday after yesterday’s over 1% drop. A barrel of crude oil traded up 1.35% at $76.71. Meanwhile, the yield on the benchmark 10-year U.S. Treasury was at 3.936%, up 0.014 percentage points. Despite the easing seen on Monday, yields are holding stubbornly higher, underlining the risk aversion in play.

The Asia-Pacific markets closed Tuesday’s session on a mixed note, while European stocks were showing tentativeness in late morning trading.

Read Next: Jim Cramer Says Fed Unable To Get Clear Vision Of Economy: ‘Insanely Hard To Predict Consumer Behavior’

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