Coming off the three-day weekend, the U.S. equity market looks like it is having vacation-withdrawal symptoms.
Currently, the S&P 500 futures are down 17 points and are trading 0.4% below fair value, the Nasdaq 100 futures are down 73 points and are trading 0.5% below fair value, and the Dow Jones Industrial Average futures are down 134 points and are trading 0.4% below fair value.
There isn’t a lot of trading excitement in the air, even though Capital One Financial (COF) has announced an agreement to acquire Discover Financial Services (DFS) in a $35.3 billion all-stock deal. That news has stirred the pot a bit in the financial sector, but overall, it hasn’t energized the broader market.
The latter is being weighed down a bit by some consolidation expectations, as well as some weakness seen in many of the mega-cap stocks, which are also battling consolidation expectations in their own right. As a reminder, NVIDIA (NVDA), the hottest mega-cap stock of them all, reports its quarterly results after the close on Wednesday.
Today’s earnings news from leading retailers and Dow components — Walmart (WMT) and Home Depot (HD) — has been greeted in a mixed fashion.
Walmart topped earnings and revenue estimates, issued some disappointing fiscal Q1 guidance, announced a dividend increase, and said it will be buying Vizio for $11.50 per share in cash. Shares of WMT are up 5.0%.
Home Depot topped earnings estimates, announced a dividend increase, but issued some tepid sales and comparable sales guidance for FY24. Shares of HD are down 2.4%.
There just isn’t much of a buying impulse at the moment in the broader market, as participants are in a wait-and-see mode, anxious to see if there will be a buy-the-dip effort today following Friday’s losses, and also anxious to see how the market responds to NVIDIA’s earnings report.
Before NVIDIA reports, though, the FOMC Minutes for the January 30-31 FOMC meeting will be released Wednesday at 2:00 p.m. ET. Given comments from Fed Chair Powell and other Fed officials since that meeting, there shouldn’t be any real surprise element to these minutes, which should connote a general willingness to wait longer to cut rates.
The People’s Bank of China surprised market participants, however, in cutting its five-year loan prime rate — a benchmark for the property sector — by a larger-than-expected 25 basis points to 3.95%. The one-year loan prime rate was left unchanged at 3.45%.
Sticking with interest rates, the 2-yr note yield is down seven basis points to 4.58% and the 10-yr note yield is down three basis points to 4.27%, benefitting from a little buy-the-dip interest of its own following a tough week last week.
The lone economic release of note today is the January Leading Indicators Report (Briefing.com consensus -0.3%; prior -0.1%) at 10:00 a.m. ET.
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Originally Posted Buying impulse missing at the moment
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