Futures pull back on Fed decision day
27-Jan-21 07:58 ET
Market is Closed
[BRIEFING.COM] S&P futures vs fair value: -41.40. Nasdaq futures vs fair value: -97.40.
https://www.briefing.com/stock-market-update
The S&P 500 futures are down 41 points and trade 1.1% below fair value, as investors take some profits and review the latest batch of earnings reports ahead the FOMC's policy directive this afternoon.
No change in monetary policy is expected when the statement is released at 2:00 p.m. ET, and Fed Chair Powell is expected to remain committed to the central bank's accommodative policy so long as the coronavirus continues to burden the economy. Mr. Powell will begin his press conference at 2:30 p.m. ET.
In the meantime, Microsoft (MSFT 236.57, +4.24, +1.8%) has supported the futures trade after exceeding quarterly estimates and issuing upbeat revenue guidance. Starbucks (SBUX 101.75, -2.94, -2.8%), Adv. Micro Devices (AMD 92.30, -2.41, -2.4%), Boeing (BA 200.00, -2.06, -1.0%), and AT&T (T 29.09, -0.66, -2.2%) are some earnings-related laggards this morning.
On a related note, the COO from Starbucks will step down and become the new CEO of Walgreens Boots Alliance (WBA 51.50, +2.31, +4.7%), according to sources from The Wall Street Journal. WBA shares are indicated higher by 4.7% in pre-market action.
On the data front, investors will receive Durable Goods Orders for December (Briefing.com consensus 0.9%) at 8:30 a.m. ET. Earlier, the MBA Mortgage Applications Index decreased 4.1% following a 1.9% decline in the prior week.
Longer-dated Treasuries have ticked higher amid the negative bias in the futures market. The 10-yr yield is down two basis points to 1.02%, while the 2-yr yield is flat at 0.12%. The U.S. Dollar Index is up 0.3% to 90.48. WTI crude futures are up 0.1% to $52.68/bbl.
In U.S. Corporate news:
- Microsoft (MSFT 236.57, +4.24): +1.8% after beating top and bottom-line estimates and guides quarterly revenue above consensus.
- Starbucks (SBUX 101.75, -2.94, -2.8% after missing revenue estimates, guiding Q2 EPS below consensus, and announcing its CFO will retire on Feb. 1. In addition, its COO will reportedly step down to become the new CEO of Walgreens Boots Alliance (WBA 51.50, +2.31, +4.7%).
- Advanced Micro Devices (AMD92.30, -2.41): -2.4% despite beating top and bottom-line estimates and issuing upside revenue guidance for Q1 and FY21.
- Boeing (BA 200.00, -2.06): -1.0% after missing EPS estimates and pushing back the first 777X delivery to late 2023. The European Union Aviation Safety Agency also approved the 737 MAX safe to fly.
- AT&T (T 29.09, -0.66): -2.2% despite beating top and bottom-line estimates.
- GameStop (GME 245.00, +96.02): +64.9% in a continuation of its short squeeze momentum.
Reviewing overnight developments:
- Equity indices in the Asia-Pacific region ended the midweek session on a mostly lower note. Japan's Nikkei: +0.3% Hong Kong's Hang Seng: -0.3% China's Shanghai Composite: +0.1% India's Sensex: -1.9% South Korea's Kospi: -0.6% Australia's ASX All Ordinaries: -0.7%.
- In economic data:
- China's December Industrial Profit 4.1% YTD (last 2.4%)
- Japan's December Leading Index 96.4 (expected 96.6; last 94.3) and Coincident Indicator -0.4% m/m (expected -0.3%; last 1.0%)
- South Korea's January Consumer Confidence 95.4 (expected 93.6; last 89.8)
- Australia's Q4 CPI 0.9% qtr/qtr (expected 0.7%; last 1.6%); 0.9% yr/yr (expected 0.7%; last 0.7%). December NAB Business Confidence 4 (last 12) and NAB Business Survey 14 (last 9)
- In news:
- Samsung will reportedly increase its semiconductor capital spending by 20% yr/yr.
- The People's Bank of China drained liquidity for the second day in a row.
- China Iron and Steel Association expects that steel products will see a slight increase in demand this year while exports are expected to continue declining.
- Major European indices trade in the red. STOXX Europe 600: -1.1% Germany's DAX: -1.6% U.K.'s FTSE 100: -0.9% France's CAC 40: -1.2% Italy's FTSE MIB: -1.5% Spain's IBEX 35: -1.1%.
- In economic data:
- Germany's February GfK Consumer Climate -15.6 (expected -7.9; last -7.5)
- France's January Consumer Confidence 92 (expected 94; last 95) Italy's December non-EU trade surplus EUR7.91 bln (last surplus of EUR6.68 bln)
- Swiss January ZEW Expectations 43.2 (last 46.8)
- In news:
- German Institute for Economic Research expects no change in Q4 GDP and a 3.0% contraction in Q1.
- ECB policymaker Knot said that the governing council is monitoring the recent appreciation in the euro and that it has tools to counter it if necessary.
- Italy's President Mattarella will begin consulting parties today in search of new leadership.
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