CBI Miss: Stock Futures Recover Solid Ground After Markets Wrap

(Bloomberg) — U.S. equity futures signaled a rebound from Wall Street's slide on Tuesday, spurred by warmer-than-expected U.S. inflation data.

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Contracts on the S&P 500 rose 0.5% after the index's worst inflation-day drop since September 2022. Benchmark Treasury yields were near the 4.3% mark as traders cut bets on an early central bank rate cut.

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U.S. CPI data disappointed investors, pushing U.S. stocks to a record low, and European peers, on growing hopes for imminent rate cuts, were lower by one. After the data and global bonds wiped out the last remnants of a rally that began in December, the Fed's move replaced the full cost of a rate cut from June to July.

However, easing policy has not been enough to stop bulls from riding the Fed's presence. BlackRock Inc. Portfolio manager Russ Koesterich sees the pullback as temporary, with US stocks likely to rise 6-8% to the upside this year and four rate cuts still pending.

“Despite yesterday's action in the stock market, this will be a good year for U.S. stocks,” Kosterich said in an interview with Bloomberg TV. “There is reason to be long in equities. I think there is no change in the story. We still think the Fed will start cutting late this spring or summer. We think we have three, maybe four, more cuts.

There was good news on Wednesday for UK traders who had been waiting for the Bank of England to ease policy. Inflation in Britain came in lower than forecast in January, with underlying price pressures not rising as much as markets and the BOE had feared. The pound reversed earlier gains after the data, while UK bonds rallied. The inflation data prompted a re-pricing in BOE rate bets, with traders resuming interest rates on three-quarter-point cuts this year.

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Oil rose after a mixed U.S. inventory report, with prices lingering at the upper end of the band they've occupied so far this year. Gold was locked in a narrow range after falling below $2,000 an ounce for the first time in two months, while bitcoin traded near the $50,000 mark.

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Corporate Highlights

• Lyft Inc. Gains in pre-market trading on Wednesday helped send shares up 67% in early post-market trading on Tuesday, even after the ride-sharing company adjusted its outlook for revenue growth in 2024.

• ASML Holding NV said the semiconductor market has reached its plateau and is now showing signs of a rebound.

• Vizio fell in U.S. premarket trading, giving up the previous day's 25% rally sparked by a Wall Street Journal report that Walmart was in talks to buy the television maker for more than $2 billion.

• Shares in Heineken NV fell after the world's second-largest brewer warned that persistent inflation and economic worries would weigh on beer demand in 2024.

• ABN Amro Bank NV rallied after it issued a new share buyback with participation from the Dutch state as part of its planned sale to the lender.

• Shares of Robinhood rose in premarket trading after the online brokerage firm reported fourth-quarter net income that beat estimates.

• Airbnb Inc. after the home-rental company reported its fourth-quarter results. Stocks fell.

Highlights of this week:

• BOE Governor Andrew Bailey testified to the House of Lords Economic Affairs Committee on Wednesday.

• Chicago Fed President Austin Goolsbee speaks on Wednesday

• Fed Vice Chairman for Supervision Michael Barr speaks on Wednesday

• Japan GDP, industrial production, Thursday

• US Empire Manufacturing, Initial Jobless Claims, Industrial Production, Retail Sales, Business Inventories, Thursday

• ECB President Christine Lagarde speaks on Thursday

• Atlanta Fed President Raphael Bostick speaks Thursday

• Fed Governor Christopher Waller speaks on Thursday

• ECB Chief Economist Philip Lane speaks on Thursday

• US Housing Starts, PPI, University of Michigan Consumer Sentiment, Friday

• San Francisco Fed President Mary Daly speaks on Friday

• Fed Vice Chairman for Supervision Michael Barr speaks on Friday

• ECB Governing Council member Isabel Schnabel speaks on Friday

Some key movements in the markets:

Shares

• S&P 500 futures were up 0.5% at 8:25 a.m. New York time

• Nasdaq 100 futures rose 0.6%

• Futures for the Dow Jones industrial average rose 0.3%

• The Stoxx Europe 600 rose 0.5%

• The MSCI World Index was little changed

Coins

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.0710

• The British pound fell 0.2% to $1.2561

• The Japanese yen rose 0.2% to 150.57 per dollar

Cryptocurrencies

• Bitcoin rose 4.3% to $51,671.49

• Ether rose 4.5% to $2,752.84

Bonds

• The yield on 10-year Treasuries was little changed at 4.31%.

• Germany's 10-year yield fell two basis points to 2.38%.

• Britain's 10-year yield fell seven basis points to 4.08%

materials

• West Texas Intermediate crude was up 0.4% at $78.15 a barrel.

• Spot gold was down 0.1% at $1,991.13 an ounce

This story was produced with the help of Bloomberg Automation.

–With assistance from Winnie Hsu and Garfield Reynolds.

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