Benzinga - The mood on Wall Street continues to be jittery, with the major index futures trading marginally to modestly lower. The weak sentiment reflected apprehensions concerning how the banking crisis will play out and a couple of key economic data scheduled for the day, as traders appeared to overlook some positive earnings reports.
Cues From Thursday’s Trading:
Hopes of big banks stepping in to support First Republic Bank (NYSE: FRC) triggered strong buying in the market on Thursday. The major averages opened Thursday’s session lower and languished in negative terrain, as traders digested the European Central Bank’s decision to raise interest rates by 50 basis points despite the turmoil in the banking system.
Strong domestic economic data on the housing and job markets also unnerved traders, who are bracing for a 25 basis point hike when the Fed meets next week or potentially even a pause.
Sentiment reversed in late morning traders as rumors began drifting around that big banks will likely pitch in with $30 billion in financing for the First Republic Bank. The Nasdaq Composite Index ended at a one-month high.
The tech-heavy Nasdaq Composite Index closed barely in positive territory, while the Dow Industrials and the S&P finished moderately lower.
Technology, communication services, financial and consumer discretionary stocks were among the best performers of the session.
| Nasdaq Composite | +2.48% | 11,717.28 | |
| S&P 500 Index | +1.76% | 3,960.28 | |
| Dow Industrials | +1.17% | 32,246.55 |
Fund manager Louis Navillier said he expects lots of volatility in the near term and remains cautious as the banking crisis plays out.
All the same, Navellier is willing to bet on good companies. “Well-managed companies can still be quite profitable in a 5% interest rate environment, even if growth slows,” he said.
“The risk is much higher for businesses counting on strong growth and easy access to cheap funding.”
Futures Today
| Nasdaq 100 Futures | -0.05% | |
| S&P 500 Futures | -0.10% | |
| Dow Futures | -0.24% | |
| R2K Futures | +0.44% |
Upcoming Economic Data:
The Federal Reserve is scheduled to release its industrial production report for February at 9:15 a.m. EDT. Economists, on average, expect industrial output to have increased 0.2% month-over-month following unchanged production in February. Manufacturing production is expected to dip 0.2%, reversing some of the 1% increase seen in the previous month. The annual industrial production growth may have accelerated from 0.79% in January to 3% in February.
The University of Michigan’s preliminary consumer sentiment report for March is due at 10 a.m. EDT. The headline consumer sentiment index is widely expected to have edged down from 67 in February to 66.9 in March. Investors may also focus on the one-year and five-year inflation expectations readings. These two metrics were at 4.1% and 2.9%, respectively, in February.
The Conference Board is set to release its leading indicators index for February at 10 a.m. EDT. Economists expect the index to have edged down by 0.3% from the previous month, the same pace of decline as in the previous month.
The Treasury is set to auction 4-week and 8-week bills at 11:30 a.m. EDT.
Stocks In Focus:
FedEx Corp. (NYSE: FDX) shares rallied over 11% in premarket trading after it reported better-than-expected third-quarter earnings and raised its 2023 guidance. Peer UPS Inc. (NYSE: UPS) moved in sympathy.
First Republic Bank shares pulled back about 8%, extending the losses from Thursday’s after-hours session following the company confirming financing by private banks.
Sarepta Therapeutics Inc. (NASDAQ: SRPT) fell over 21% after the FDA required an Adcom meeting for its Duchenne muscular dystrophy investigational therapy.
Nvidia Corp. (NASDAQ: NVDA) shares rose over 1% on a rating upgrade by Morgan Stanley.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures rose for a second straight session following steep declines in the first two sessions of the week. A barrel of WTI-grade crude oil climbed 1.64% to $69.48.
The 10-year Treasury yield fell 0.038 percentage points to 3.545% after rising on Thursday.
The major Asian markets ended uniformly higher on Friday, encouraged by the positive lead from Wall Street overnight. European stocks saw moderate gains by late-morning trading.
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