Stock futures rise amid resurgence in US growth betting; Cisco Systems Jumps After Outperforming Fourth Quarter Earnings, Network Outlook; Roku Rises as Cost Cuts Support 2023 Profit Momentum; Twilio pushes higher after surprise Q4 earnings, Raytheon share buybacks, Lockheed Martin lower as China imposes sanctions on Taiwan arms sales.
Five things to know before the market opens on Thursday, February 16:
1. — Stock futures rise amid resurgence in US growth betting.
US stock futures rose on Thursday, while the dollar fell and Treasury yields eased as investors broadened their acceptance of risk markets amid a resurgent national economy.
Yesterday’s impressive January retail sales data, which included the best monthly gain in two years, along with a better-than-expected sentiment survey from the National Association of Home Builders, added to bets that the US economy The US will comfortably avoid a near-term recession even as the Federal Reserve continues to tighten monetary policy in the face of stubbornly high inflation.
The Atlanta Fed’s GDPNow forecasting tool, in fact, shows that the US economy is advancing at a pace of 2.4% this quarter, up from the 2.2% estimate it showed before the retail sales data.
The improvements were briefly muted by a rise in Treasury yields, which lifted benchmark 10-year notes above 3.8% during the trading session on Wednesday, as investors readjusted assumptions for yields. Fed rate hikes and eliminated any possibility of rate cuts on the back. half of the year
Huge gains for mega-cap tech stocks, including Apple (AAPL) – Get a free reportAlphabet (Google) – Get a free reportand Amazon (AMZN) – Get a free reporthelped generate outsized gains for the Nasdaq, which ended the session up 0.92%, while providing evidence of risk appetite despite broad swings in rates and bond markets.
CME Group’s FedWatch is, in fact, pricing in a 43.2% chance of a 25 basis point rate hike in June, following similar hikes in March and May, with bets on a 5% fed funds rate. which continues until the end of the year.
Benchmark 10-year notes were last trading at 3.784%, with 2-year notes pegged at 4.595%, as investors pared some of yesterday’s rise in overnight session. The US dollar index, which tracks the dollar against a basket of its global peers, was down 0.25% at 103.663.
On Wall Street, stocks are looking for modest opening bell gains ahead of January housing and building permit data, expected at 8:30 am ET, along with the January reading for inflation. at the factory gate.
Futures contracts linked to the S&P 500 indicate a 2-point opening bell and those linked to the Dow Jones Industrial Average are priced at a 30-point gain. The tech-heavy Nasdaq indicates a small jump of 10 points.
In foreign markets, Europe’s Stoxx 600 rose 0.56% in early Frankfurt trading, driven in part by better-than-expected earnings for Boeing. (licensed in letters) – Get a free reportits rival Airbus, while Britain’s FTSE 100 gained 0.28% in London.
Overnight in Asia, the MSCI ex-Japan index of the entire region jumped 0.75% at the close of trading, while the Nikkei 225 finished 0.71% after last night’s weaker, firmer close in Wall St.
2. — Cisco Systems Jumps After Outperforming Q4 Earnings, Network Outlook
cisco systems (CSCO) – Get a free reportThe shares rose strongly in premarket trading after the network equipment maker beat Street’s earnings forecasts and raised its full-year earnings outlook.
Cisco said adjusted earnings for the three months ending in December, the group’s fiscal second quarter, rose 5% from a year ago to 88 cents per share, just above Street estimates, up from revenue 7% to $13.6 billion.
Looking ahead to the second half of its fiscal year, Cisco said revenue is likely to rise between 9% and 10.5%, nearly double its previous forecast, with earnings of between $2.85 and $2.96 per action as supply chain delays improve and corporate spending on network infrastructure is sustained. solid.
“Cisco is better positioned today than at any time since I became CEO nearly eight years ago,” said company chief Chuck Robbins.
Shares of Cisco Systems rose 4.05% in premarket trading to signal an opening bell price of $50.41.
3. — Roku surges as cost cuts support 2023 earnings campaign
Roku (YEAR) – Get a free reportShares rose in premarket trading after the streaming services hub and connected TV maker posted a smaller-than-expected fourth-quarter loss and said cost cuts and its new content model would boost revenue. short term.
Roku, which added its own content to its streaming hub to diversify its service hub revenue, said current quarter revenue would likely rise to $700 million, with full-year gross profit in the region of $1.4K. millions.
For the three months ending in December, Roku posted an adjusted loss of $1.70 per share, 3 cents below the Street consensus forecast, on revenue of $801.7 million.
Roku shares marked up 9.95% in premarket trading to indicate an opening bell price of $69.81 each.
4. — Twilio grows in power after surprise Q4 earnings and share buyback
Twilio (TWO) – Get a free reportShares rose in premarket trading after the cloud software group posted a surprise fourth-quarter profit and revealed plans for a $1 billion share buyback.
Twilio’s bottom line of 22 cents a share easily beat Street’s forecast for a loss of 9 cents a share, and while revenue rose 22% (the slowest growth rate in two years), it also beat Twilio’s forecast. analysts 1.02 billion dollars. .
Like other companies in the high-growth tech space, Twilio is cutting costs and cutting jobs, a move it says will help boost profits in the near term as corporate cloud spending slows amid concerns about the weakening of the global economy.
Twilio expects non-GAAP earnings in the region of $250 million to $350 million this year, almost all of it from its communications segment.
Twilio shares ticked up 13.3% in premarket trading to indicate an opening bell price of $74.82 each.
5. — Raytheon, Lockheed Martin slide as China imposes sanctions on arms sales in Taiwan
Raytheon Technologies (RTX) – Get a free reportshares fell in premarket trading after the aeronautics and defense group was sanctioned by China, along with Lockheed Martin (LMT) – Get a free reportfor selling arms to Taiwan.
China’s Ministry of Commerce placed the two US groups on its “unreliable entities” list, following sanctions first imposed in February last year, which prevent the two companies from “engaging in import activities.” and export related to China”. according to a government statement.
The move signals a further rise in tensions between Washington and Beijing, linked in part to US support for Taiwanese independence, but also to the recent downing of spy balloons off the coast of South Carolina and Alaska allegedly operated by the chinese government.
Raytheon shares were down 1.44% in premarket trading to indicate an opening bell price of $100 apiece, while Lockheed Martin fell 0.5% to $478.00 apiece.
