U.S. Stock Futures Dip Ahead of Powell’s Testimony and Labor Data Release
U.S. stock futures edged lower on Thursday as investors awaited a second day of testimony on Capitol Hill from Federal Reserve Chair Jerome Powell and geared up for the release of key labor market data later in the week.
Powell’s Testimony to Senate Committee
Powell’s prior testimony to a House committee fueled optimism as he hinted at eventual rate cuts from the Fed. However, he emphasized the need for evidence of sustained inflation easing before implementing any cuts. Powell is scheduled to testify to the Senate Committee on Banking, Housing, and Urban Affairs today.
Analysts Predict Fed Rate Cuts
Analysts at ING anticipate a cooling jobs market and sluggish consumer spending, citing weak household income growth and high borrowing costs. They forecast a first cut at the June meeting of the rate-setting Federal Open Market Committee.
Earnings Reports from Costco and Kroger
Costco experiences stronger demand for essentials amid sticky inflation, while Kroger revises its sales outlook due to moderating prices and lower consumer spending. Market attention also shifts to Kroger’s planned $24.6 billion acquisition of rival Albertsons, which faces scrutiny from U.S. trade regulators.
China’s Trade Surplus Surpasses Expectations
China’s trade surplus for January-February exceeds estimates, with exports and imports showing resilience and growth, fueled partly by increased holiday spending.
Oil Prices Retreat Amid Mixed Demand Signals
Oil prices decline in European trade as markets digest demand cues from top importer China. While import data showed a rise in crude oil imports, uncertainty looms over U.S. monetary policy following contrasting comments from Fed officials Powell and Kashkari.
$INTC- The U.S. government is poised to invest $3.5B in Intel so the chipmaker can produce advanced semiconductors for military and intelligence programs, congressional aides told Bloomberg’s Mackenzie Hawkins. The expected investment “positions Intel as dominant defense player” and the funding is set to be included in a bill President Biden is expected to sign this week, the report stated.
$GDDY- Piper Sandler analyst Clarke Jeffries raised the firm’s price target on GoDaddy to $145 from $130 and keeps an Overweight rating on the shares. GoDaddy hosted its 2024 Investor Day, showcasing product strategy updates and giving new three-year financial targets across revenue growth, EBITDA margin, and free cash flow/share growth, the firm says. On the product side, Piper was particularly impressed by the commerce readiness of Airo, the company’s AI-powered solution, which represents the intersection of GenAI tools, and the culmination of a multi-year build out of a common data environment for GoDaddy’s applications, creating seamless cross-sell experiences. On the financial side, the firm believes new three-year targets handily beat expectations. The firm walks away encouraged by potential of incremental growth levers via Commerce and Airo, and prospects for GoDaddy to drive $13+ of free cash flow/share by FY26.
$AMD- Mizuho raised the firm’s price target on AMD to $235 from $200 and keeps a Buy rating on the shares. The analyst is taking a longer-term look at the artificial intelligence and custom silicon landscape. The firm cites positive AI custom silicon and ethernet tailwinds for the target increase. It sees further multiple expansion with multiple catalysts ahead.
$NVDA- Mizuho raised the firm’s price target on Nvidia to $1,000 from $850 and keeps a Buy rating on the shares. The analyst is taking a longer-term look at the artificial intelligence and custom silicon landscape. The firm cites positive AI custom silicon and ethernet tailwinds for the target increase. It sees further multiple expansion with multiple catalysts ahead.
$TSLA- Citi analyst Itay Michaeli keeps a Neutral rating on Tesla with a $224 price target. The firm remains on the sidelines on the shares awaiting a more compelling entry point. Tactically, the Q1 setup looks tough with consensus still elevated and recent data points suggesting Q1 will need a strong finish to hit numbers, the analyst tells investors in a research note. That said, Citi has been of the view that electric vehicle sentiment would likely not improve until spring or summer, in part on the back of new products. In Tesla’s case, besides Cybertruck, the firm views the Model 3 refresh as a key determinant of spring/summer sentiment. Citi says it is “tough to get bullish with consensus still high, but the Model 3 refresh is showing some early promise that’s worth keeping an eye on.”
“Fortnite” maker Epic Games said that, to the company’s suprise, Apple (AAPL) terminated the company’s developer account, and that Epic cannot devleop the Epic Games Store for iOS. “We recently announced that Apple approved our Epic Games Sweden AB developer account,” Epic Games said. “We intended to use that account to bring the Epic Games Store and Fortnite to iOS devices in Europe thanks to the Digital Markets Act (DMA). To our surprise, Apple has terminated that account and now we cannot develop the Epic Games Store for iOS. This is a serious violation of the DMA and shows Apple has no intention of allowing true competition on iOS devices… In terminating Epic’s developer account, Apple is taking out one of the largest potential competitors to the Apple App Store. They are undermining our ability to be a viable competitor and they are showing other developers what happens when you try to compete with Apple or are critical of their unfair practices. If Apple maintains its power to kick a third party marketplace off iOS at its sole discretion, no reasonable developer would be willing to utilize a third party app store, because they could be permanently separated from their audience at any time.” Investors in Epic Games include Tencent (TCEHY), KKR (KKR), Disney (DIS), and Sony (SONY).
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