Stock Market Update

Equity futures point to a modestly lower opening after stocks had another choppy session yesterday that was largely driven by developments on the geopolitical and energy fronts.

Oil retreated sharply again, though stocks gave back some of their earlier gains in the afternoon as reports began to circulate that Iran has begun deploying naval mines in the Strait of Hormuz. The major averages ended up finishing mostly lower in close proximity to their unchanged levels.

Currently, oil is up around 3%, trading a touch above the $86 per barrel mark. 

The Wall Street Journal reports that the IEA is expected to announce the largest-ever oil reserve release today. Japan also announced that it will release its part of oil reserves on Monday, independent of the IEA's decision. 

The recent surge in oil prices is beginning to work its way through the economy, with Bloomberg reporting that airlines are raising fares amid the recent increase to fuel prices. 

The market will get an inflation reading today in the form of the February CPI (Briefing.com consensus 0.3%) and Core CPI (Briefing.com consensus 0.2%) readings, though the February reading will not yet reflect the recent energy surge. 

On the earnings front, Oracle (ORCL 163.85, +14.45, +9.7%) made a sharp move higher following its earnings release yesterday evening. The technology sector was a relative outperformer yesterday, though software stocks in particular have been a point of weakness after a solid rebound move last week. 

The MBA Applications Index for the week ended March 7 increased 3.2%, from a prior increase of 11.0%.

In corporate news:

• Cintas (CTAS 191.90, -4.38, -2.2%) is set to acquire UniFirst (278.43, +20.52, +8.0%) in a $5.5 billion cash and stock deal.
• JPMorgan Chase (JPM 287.88, -0.85, -0.29) is marking down some private credit loans, according to Financial Times. 
• Oracle (ORCL 163.85, +14.45, +9.7%) beat EPS expectations by $0.09, beat revenue expectations, guided Q4 EPS above consensus with revenues in line, and guided FY27 revenues above consensus. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the midweek session on a mostly higher note. Japan's Nikkei: +1.4%, Hong Kong's Hang Seng: -0.2%, China's Shanghai Composite: +0.3%, India's Sensex: -1.7%, South Korea's Kospi: +1.4%, Australia's ASX All Ordinaries: +0.6%.

In news:

• South Korea's exports were up 55.6% yr/yr through the first ten days of March with chip exports spiking 175.9% to a record of $7.6 bln.
• Mitsubishi cancelled a planned yen-denominated debt sale.
• The Reserve Bank of Australia is expected to announce a rate hike next week after hawkish comments from Deputy Governor Hauser.
• Japan's trade minister Akazawa said that Japan can release oil reserves without coordinating with G7 while South Korea's Industry Ministry said that it is reviewing which position to take.

In economic data:

• Japan's February PPI -0.1% m/m (expected 0.1%; last 0.2%); 2.0% yr/yr (expected 2.2%; last 2.3%)

Major European indices trade on a lower note. STOXX Europe 600: -0.8%, Germany's DAX: -1.2%, U.K.'s FTSE 100: -0.8%, France's CAC 40: -0.7%, Italy's FTSE MIB: -0.9%, Spain's IBEX 35: -0.3%.

In news:

• The Bank of France maintained its Q1 domestic growth forecast at 0.2-0.3%, though it acknowledged the presence of increased uncertainty due to the Iran war.
• The U.K.'s Office for Budget Responsibility expects British inflation to end the year at 3% if energy prices remain at their current levels.
• European Central Bank policymakers Nagel, Kazimir, and Kazaks spoke in favor of holding policy steady at next week's ECB meeting.

In economic data:

• Germany's February CPI 0.2% m/m, as expected (last 0.1%); 1.9% yr/yr, as expected (last 2.1%)
• Spain's January Retail Sales 4.0% yr/yr (last 2.8%)