Stock Market Update

The S&P 500 futures are down 24 points and are trading 0.4% below fair value, the Nasdaq 100 futures are down 160 points and are trading 0.7% below fair value, and the Dow Jones Industrial Average futures are down 65 points and are trading 0.1% below fair value.

Early trading features a negative bias after a slate of disappointing earnings news since yesterday's close. Alphabet (GOOG) reported soft revenue growth and Uber (UBER) reported below-consensus quarterly operating income. Shares are 7% and 5% lower, respectively, ahead of the open.

Walt Disney (DIS) reported below-consensus earnings, along with a decline in streaming subscribers, but shares are 1.5% higher ahead of the open.

In corporate news:

• Alphabet (GOOG 193.63, -14.08, -6.8%): beats by $0.02, reports revs in-line, Google Cloud revenue increased 30%; Expects to invest approximately $75 bln in capex in 2025
• Walt Disney (DIS 115.00, +1.70, +1.5%): misses by $0.05, reports revs in-line, Disney+ subscribers decreased by 700,000 qtr/qtr; Reaffirms FY25 EPS growth outlook of high-single-digit growth
• Advanced Micro Devices (AMD 108.15, -11.35, -9.6%): beats by $0.01, beats on revs; guides Q1 revs in-line; Seeing strong customer interest in the MI400 series
• Uber (UBER 66.65, -3.10, -4.4%): beats by $2.71, beats on revs
• Chipotle Mexican Grill (CMG 56.33, -2.69, -4.6%): beats by $0.01, reports revs in-line, comps +5.4%, guides to FY25 comp growth in the low to mid-single digits
• Snap (SNAP 11.97, +0.37, +3.1%): beats by $0.05, reports revs in-line; projects Q1 revenue in-line with consensus; expects DAUs of approximately 459 mln

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Wednesday on a mixed note. Japan's Nikkei: +0.1%, Hong Kong's Hang Seng: -0.9%, China's Shanghai Composite: -0.7%, India's Sensex: -0.4%, South Korea's Kospi: +1.1%, Australia's ASX All Ordinaries: +0.6%.
  • In economic data:
    • China's January Caixin Services PMI 51.0 (expected 52.3; last 52.2)
    • Japan's December Overall Wage Income 4.8% yr/yr (expected 3.8%; last 3.9%). January Services PMI 53.0 (expected 52.7; last 50.9)
    • South Korea's January CPI 0.7% m/m (expected 0.4%; last 0.4%); 2.2% yr/yr (expected 2.0%; last 1.9%)
    • India's January Services PMI 56.5 (expected 56.8; last 59.3)
    • Hong Kong's January Manufacturing PMI 51.0 (last 51.1)]
    • Singapore's December Retail Sales -1.5% m/m (last -2.8%); -2.9% yr/yr (last -0.5%)
    • Australia's December AIG Construction Index -20.0 (last -19.0) and Manufacturing Index -22.7 (last -17.9). January Services PMI 51.2 (expected 50.4; last 50.8)
    • New Zealand's Q4 Employment Change -0.1% qtr/qtr (expected -0.2%; last -0.5%). Q4 Labor Cost Index 0.6% qtr/qtr, as expected (last 0.6%); 2.9% yr/yr (expected 3.0%; last 3.4%). Q4 Unemployment Rate 5.1%, as expected (last 4.8%) and Participation Rate 71.0% (expected 71.1%; last 71.1%)
  • In news:
    • Toyota reported strong results and raised its profit forecast for the year.
    • Japan reported strong income growth for December, due in part to winter bonus payments.
    • Former Bank of Japan policymaker Hayakawa reportedly expects two more rate hikes from the BoJ this year.
    • China's Caixin Services PMI for January (51.0; prior 52.2) showed an unexpected slowdown in growth in the services sector.
    • New Zealand's unemployment rate increased to 5.1% from 4.8% in Q4, prompting speculation about a potential 50-basis point cut from the Reserve Bank of New Zealand later this month.
• Major European indices trade near their flat lines while Spain's IBEX (+1.0%) is seeing a continuation of its recent strength with help from solid results from Santander. STOXX Europe 600: +0.1%, Germany's DAX: -0.1%, U.K.'s FTSE 100: +0.1%, France's CAC 40: -0.2%, Italy's FTSE MIB: -0.7%, Spain's IBEX 35: +1.0%.
  • In economic data:
    • Eurozone's January Services PMI 51.3 (expected 51.4; last 51.6). December PPI 0.4% m/m (expected 0.5%; last 1.7%); 0.0% yr/yr (expected -0.1%; last -1.2%)
    • Germany's January Services PMI 52.5, as expected (last 51.2)
    • U.K.'s January Services PMI 50.8 (expected 51.2; last 51.1)
    • France's December Industrial Production -0.4% m/m (expected -0.1%; last 0.1%). January Services PMI 48.2 (expected 48.9; last 49.3)
    • Italy's January Services PMI 50.4 (expected 50.5; last 50.7). December Retail Sales 0.6% m/m (expected 0.1%; last -0.4%); 0.6% yr/yr (last 1.1%)
    • Spain's January Services PMI 54.9 (expected 56.7; last 57.3)
  • In news:
    • Meanwhile, Italy's MIB (-0.7%) is dipping from levels last seen in late 2007.
    • European Central Bank policymaker De Guindos said that inflation is nearing the 2.0% target, but he is not sure where rates will end up.
    • The Central Bank of Iceland lowered its policy rate by 50 basis points to 8.00%.