Page One
Briefing.com Summary:
*Cisco Systems, which had been rallying, is down sharply following its earnings report and outlook.
*The January employment report was better for the growth outlook than the rate-cut outlook.
*The initial and continuing jobless claims report fits with a low firing-slow hiring environment.
There is a Dow component that is down 6% in pre-market trading following its earnings report and guidance. It is also a tech stock. That would be Cisco Systems (CSCO), a dot-com boom and bust darling and current AI beneficiary. Its crime, reportedly, is that its guidance was only in line with expectations.
That isn't good enough for a company operating in a growth industry and that made a big move higher ahead of its report. Therefore, it is in rebate mode at the moment. The good news is that the broader market isn't feeding off the reaction to Cisco's guidance.
Instead, it is feeding off the pre-open gains seen in most of the mega-cap stocks, as well as the upside action seen in fellow Dow component McDonald's (MCD) following its impressive earnings report and the steady demeanor of the 10-yr note yield, which sits at 4.16%.
The S&P 500 futures are up 28 points and are trading 0.4% above fair value, the Nasdaq 100 futures are up 107 points and are trading 0.5% above fair value, and the Dow Jones Industrial Average futures are up 168 points and are trading 0.4% above fair value.
That leaves the indices on course to reclaim the modest losses they suffered yesterday in spite of the better-than-expected January employment report.
That report was a reassuring report for the growth outlook, but maybe not so much for the rate-cut outlook. The latter consideration got globbed onto by some pundits as a basis for why the stock market was unable to hold its post-report gains. It was a convenient explanation, but based on this morning's buy-the-dip interest, it looks a little too cute from a cause-and-effect standpoint.
It likely had more to do with some consolidation activity after a spirited run that began last Friday. At yesterday's high, the S&P 500 was up 2.9% from last Thursday's closing level.
Granted, there were additional ruminations about the AI disruption factor, yet that had some more industry-specific implications than catch-all implications for the broader market.
There was an economic release this morning that caught the market's attention. It was the weekly initial and continuing jobless claims report, which didn't make too many waves.
Initial jobless claims for the week ending February 7 decreased by 5,000 to 227,000 (Briefing.com consensus: 230,000). Continuing jobless claims for the week ending January 31 increased by 21,000 to 1.862 million.
The key takeaway from the report is its steady messaging that layoff activity is low and that hiring activity is slow.
The January Existing Home Sales report (Briefing.com consensus: 4.21 million; prior 4.35 million) will be released at 10:00 a.m. ET. Separately, the Treasury Department will round out this week's auctions with a $25 billion 30-yr bond offering. Results will be announced at 1:00 p.m. ET.
