Stock Market Update

The S&P 500 futures are down five points and are trading 0.1% below fair value, the Nasdaq 100 futures are up ten points and are trading 0.1% above fair value, and the Dow Jones Industrial Average futures are down seven points and are trading 0.1% below fair value.

There's a mixed vibe in early trading as market participants wait on more inflation data in the form of the January Producer Price Index at 8:30 ET, along with more information on President Trump's reciprocal tariffs will be announced today.

Participants are also digesting a slate of earnings news. Cisco (CSCO) shows a solid pre-open gain after reporting results while Reddit (RDDT) shares are sinking ahead of the open in response to results.

The 10-yr yield is down four basis points to 4.60% and the 2-yr yield is down two basis points to 4.35%.

In corporate news:

• Cisco (CSCO 66.45, +3.92, +6.3%): beats by $0.03, reports revs in-line; guides Q3 EPS in-line, revs above consensus; guides FY25 EPS and revs above consensus; also increases dividend and increase buyback auth by $15 bln; Not seeing any evidence of customers pulling demand ahead and guidance incorporates impact from tariffs
• AppLovin (APP 492.00, +111.68, +29.7%): beats by $0.48, beats on revs; guides Q1 revs above consensus
• Reddit (RDDT 193.80, -22.67, -10.5%): beats by $0.11, beats on revs, DAUq increased 39%; guides Q1 revs above consensus
• Dutch Bros (BROS 79.50, +14.79, +22.9%): beats by $0.05, beats on revs; guides FY25 revs above consensus
• Unilever PLC (UL 55.54, -3.60, -5.9%): beats on top and bottom lines; provides outlook; raises dividend

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Thursday on a mostly lower note. Japan's Nikkei: +1.3%, Hong Kong's Hang Seng: -0.2%, China's Shanghai Composite: -0.4%, India's Sensex: UNCH, South Korea's Kospi: +1.4%, Australia's ASX All Ordinaries: +0.1%.
  • In economic data:
    • Japan's January PPI 0.3% m/m, as expected (last 0.4%); 4.2% yr/yr (expected 4.0%; last 3.9%)
    • Australia's MI Inflation Expectations 4.6% (last 4.0%)
    • New Zealand's January Electronic Card Retail Sales -1.6% m/m (last 2.4%); -0.5% yr/yr (last -1.0%). Q1 Inflation Expectations 2.1% (last 2.1%)
  • In news:
    • Japan's PPI accelerated to 4.2% yr/yr in January, representing the fastest growth since mid-2013.
    • Japan's Prime Minister Ishiba said that there are no current plans to review the government's accord with the Bank of Japan.
    • China offered to host a trilateral summit to negotiate an end to the war in Ukraine.
• Major European indices are mostly higher with Germany's DAX (+1.5%) leading the way, helped by strong results from Siemens and a positive showing from automakers. STOXX Europe 600: +0.7%, Germany's DAX: +1.5%, U.K.'s FTSE 100: -0.6%, France's CAC 40: +1.2%, Italy's FTSE MIB: +0.4%, Spain's IBEX 35: +0.2%.
  • In economic data:
    • Eurozone's December Industrial Production -1.1% m/m (expected -0.6%; last 0.4%); -2.0% yr/yr (expected -3.1%; last -1.8%) o Germany's January CPI -0.2% m/m, as expected (last 0.5%); 2.3% yr/yr, as expected (last 2.6%)
    • U.K.'s Q4 GDP 0.1% qtr/qtr (expected -0.1%; last 0.0%); 1.5% yr/yr (expected 1.0%; last 1.1%). Q4 Business Investment -3.2% qtr/qtr (expected -0.4%; last 1.9%); -0.7% yr/yr (last 4.4%). December Construction Output -0.2% m/m (expected 0.2%; last 0.6%); 1.5% yr/yr (expected 1.1%; last 1.0%). December Industrial Production 0.5% m/m (expected 0.2%; last -0.5%); -1.9% yr/yr (expected -2.1%; last -2.0%). December Manufacturing Production 0.7% m/m (expected 0.0%; last -0.3%); -1.4% yr/yr (expected -1.9%; last -1.1%). December trade deficit GBP17.45 bln (expected deficit of GBP18.60 bln; last deficit of GBP18.90 bln)
    • Swiss January CPI -0.1% m/m, as expected (last -0.1%); 0.4% yr/yr, as expected (last 0.6%)
  • In news:
    • There has been some optimism about the prospect of ending the war in Ukraine after President Trump announced that negotiations with Russia will begin immediately.
    • The European Central Bank's latest economic bulletin reaffirmed expectations for inflation slowing to 2.0% this year.