Stock Market Update

The S&P 500 futures are up 29 points and are trading 0.5% above fair value, the Nasdaq 100 futures are up 200 points and are trading 0.9% above fair value, and the Dow Jones Industrial Average futures are up 133 points and are trading 0.3% above fair value.

Earnings season continues to pick up steam after a solid start to the Q4 reporting period. Netflix (NFLX), United Airlines (UAL), and Dow component Travelers (TRV) are among the pre-open winners in response to earnings results.

AI-related stocks are leading the pre-market action after President Trump at a press conference, alongside the CEOs of OpenAI, Softbank (SFTBY), and Oracle (ORCL), confirmed a partnership to invest up to $500 billion in infrastructure connected to artificial intelligence.

Economic data today includes the weekly MBA Mortgage Applications Index, which rose 0.1% after a 33.3% surge last week. The December Leading Indicators Index is released at 10:00 ET and weekly EIA Crude Oil Inventories are released at 10:30 ET.

In corporate news:

• Oracle (ORCL 187.44, +14.91, +8.6%): President Trump at press conference alongside CEOs of OpenAI, Softbank (SFTBY), and Oracle confirm partnership to invest up to $500 billion in infrastructure connected to artificial intelligence
• Netflix (NLFX 996.00, +125.82, +14.8%): beats by $0.06, beats on revs; guides Q1 EPS below consensus, revs below consensus; raises FY25 revs guidance; Q4 was the biggest quarter of net adds in co history; Expects to double ads revenue yr/yr in 2025
• United Airlines (UAL 114.95, +4.43, +4.0%): beats by $0.23, beats on revs; sees robust demand in 1Q25; projects Q1 EPS above consensus; FY25 earnings in-line
• Johnson & Johnson (JNJ 145.90, -1.54, -1.0%): beats by $0.05, reports revs in-line; guides FY25 EPS in-line
• Procter & Gamble (PG 167.79, +6.07, +3.8%): beats by $0.02, beats on revs; reaffirms FY25 EPS guidance, revs guidance
• Abbott Labs (ABT 114.02, -2.77, -2.4%): beats by $0.01, reports revs in-line; guides FY25 EPS in-line
• Travelers (TRV 252.00, +12.84, +5.4%): beats by $2.50, beats on revs

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the midweek session on a mostly higher note. Japan's Nikkei: +1.6%, Hong Kong's Hang Seng: -1.6%, China's Shanghai Composite: -0.9%, India's Sensex: +0.8%, South Korea's Kospi: +1.2%, Australia's ASX All Ordinaries: +0.3%.
  • In economic data:
    • South Korea's January Consumer Confidence 91.2 (last 88.4)
    • Australia's December MI Leading Index 0.0% (last 0.1%)
    • New Zealand's Q4 CPI 0.5% qtr/qtr, as expected (last 0.6%); 2.2% yr/yr (expected 2.1%; last 2.2%)
  • In news:
    • Japan's Nikkei (+1.6%) showed relative strength after SoftBank took part in a White House announcement about a $500 bln AI fund while Hong Kong's Hang Seng (-1.6%) lagged after President Trump said that a 10% tariff on imports from China could be imposed at the start of February.
    • The market is almost certain that the Bank of Japan will announce a 25-basis point rate hike on Friday.
• Major European indices trade in the green. STOXX Europe 600: +0.7%, Germany's DAX: +1.4%, U.K.'s FTSE 100: +0.3%, France's CAC 40: +1.3%, Italy's FTSE MIB: +0.2%, Spain's IBEX 35: +0.2%.
  • In economic data:
    • U.K.'s December Public Sector Net Borrowing GBP17.81 bln (expected GBP14.20 bln; last GBP11.80 bln) and Public Sector Net Cash Requirement GBP19.88 bln (last GBP13.13 bln)
  • In news:
    • Several European Central Bank policymakers, including President Lagarde, spoke about gradual rate cuts being appropriate at this time.
    • British Chancellor Reeves insisted that the U.K.'s public finances are now in order.
    • Adidas reported strong result for Q4.