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 down 52 points and are trading 0.3% below fair value, and the Dow Jones Industrial Average futures are up 21 points and are trading 0.1% above fair value.

There's a mixed vibe in early trading after yesterday's disappointing finish for the S&P 500 and Nasdaq Composite. Treasury yields are lower in an ongoing safety trade. The 10-yr yield is down six basis points to 4.33% and the 2-yr yield is down five basis points to 4.12%.

Today's economic lineup features the December FHFA Housing Price Index and December S&P Case-Shiller Home Price Index at 9:00 ET and the February Consumer Confidence Index at 10:00 ET.

Separately, the People's Bank of China left its one-year medium-term lending facility rate at 2.00%.=

In corporate news:

• Home Depot (HD 387.49, +5.07, +1.3%): beats by $0.09, beats on revs, comparable sales increased 0.8%; guides FY26 EPS below consensus, revs below consensus; CFO Richard McPhail tells CNBC that he doesn't see housing market improving in 2025; saw continued pressure on remodeling projects; saw market share gains in appliances and power tools
• Cleveland-Cliffs (CLF 10.67, -0.48, -4.3%): misses by $0.07, misses on revs; provides FY25 expectations
• Zoom Communications (ZM 77.70, -3.40, -4.2%): beats by $0.11, reports revs in-line; guides Q1 EPS in-line, revs below consensus; guides FY26 EPS in-line, revs below consensus
• Tesla (TSLA 331.46, +0.93, +0.3%): Europe sales declined 45% in January, according to FT
• US Steel (X 37.78, +0.09, +0.2%): and Nippon Steel begin discussions with Commerce Department, according to Reuters

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Tuesday on a lower note. Japan's Nikkei: -1.4%, Hong Kong's Hang Seng: -1.3%, China's Shanghai Composite: -0.8%, India's Sensex: +0.2%, South Korea's Kospi: -0.6%, Australia's ASX All Ordinaries: -0.7%.
  • In economic data:
    • Japan's January Corporate Services Price Index 3.1% yr/yr (expected 2.9%; last 3.0%)
    • Hong Kong's January trade surplus $2.1 bln (last deficit of $34.5 bln). January Imports 0.5% m/m (last -1.1%) and Exports 0.1% m/m (last 5.2%)
  • In news:
    • Technology stocks underperformed after yesterday's weakness on Wall Street.
    • The People's Bank of China left its one-year medium-term lending facility rate at 2.00%.
    • Huawei has made a breakthrough in AI chip production, resulting in improved chip yield, according to FT.
    • The Bank of Korea lowered its policy rate by 25 basis points to 2.75%, as expected, with just two policymakers open to additional cuts. The central bank lowered its domestic growth forecast for 2025 to 1.5% from 1.9%.
• Major European indices trade in positive territory. STOXX Europe 600: +0.3%, Germany's DAX: +0.2%, U.K.'s FTSE 100: +0.4%, France's CAC 40: UNCH, Italy's FTSE MIB: +0.8%, Spain's IBEX 35: +1.0%.
  • In economic data:
    • Germany's Q4 GDP -0.2% qtr/qtr, as expected (last 0.1%); -0.2% yr/yr, as expected (last -0.3%)
  • In news:
    • Germany's Q4 GDP was left unrevised at -0.2% with falling exports largely responsible for the contraction.
    • Germany's CDU leader Merz is seeking to form a coalition with SPD, aiming to boost defense spending by EUR200 bln and potentially reform the debt brake.
    • Bank of England policymaker Dhingra spoke in favor of aggressive rate cuts.
    • Germany's Bundesbank lost EUR19.2 bln for 2024, recording its first loss since 1979.