Daily Markets: "Positive Shifts" in Russia-Ukraine Talks Lift Stocks

Today’s Big Picture

Asian markets closed today’s trading down across the board, with the exception of India’s Sensex gaining 0.15% and China’s Shanghai Composite rising 0.41%. South Korea’s KOSPI fell 0.71%, Taiwan’s TAIEX declined 0.97%, Hong Kong’s Hang Seng lost 1.61% and Japan’s Nikkei closed down 2.05% By mid-day trading, European equity indices are up across the board and U.S. futures point to a strong market open later this morning.

Providing some significant lift to futures, reports indicate Russian President Vladimir Putin cited “certain positive shifts” have occurred in the talks between Russia and Ukraine. With another light day of economic data and scant earnings being reported today, odds are the market’s behavior today will hinge on potential follow-through for Putin’s comments, including Ukraine’s confirmation that talks have indeed thawed. What we learn today and over the weekend will likely set the direction for equities next week, which is already poised to be a busy one given several key pieces of economic data and the Federal Reserve’s highly anticipated monetary policy meeting. 

Data Download

International Economy

China announced New Yuan Loans for February at 1.23 billion, a significant decline from the previously reported 3.98 billion. This drop has more to do with the seasonality of the loans cycle in China as it is reported that Chinese bankers tend to issue loans early in the year in an attempt to attract “higher quality customer and win market share.” This is reflected somewhat in February YoY loan growth which came in at 11.4% as compared to the previously reported 11.5% growth figure.

The UK reported January YoY Industrial production at 2.3% growth, outpacing estimates of 2.0% and showing a big pickup from the previously reported 0.40%. This figure has seen some extremes during covid seeing a 25.3% decline in April 2020 and a 29.82% peak in April 2021. 2% growth is a sign that production is settling back into a more normal range as the economic effects of Covid begin to wane.

Domestic Economy

The only significant domestic release is at 10:00 AM ET when the University of Michigan releases the March update on its consumer sentiment index which is expected to come in at 62.0, only slightly lower than the previously reported 62.8. 

The U.S. Senate passed the $1.5 trillion omnibus bill with $13.6 billion in supplemental appropriations to address the crisis in Ukraine.

Markets

The reported breakdown in Russia-Ukraine talks and the continued march higher in the Consumer Price Index per its February data weighed on equities yesterday even though oil prices finished the day lower. The S&P 500 declined 0.4% yesterday, the Dow Jones Industrial Average shed 0.3% and Russell 2000 dipped 0.2%, while the Nasdaq Composite fell 1.0%. Including those moves, here’s how the major market indicators stack up on a year-to-date basis:

• Dow Jones Industrial Average: -8.7%
• S&P 500: -10.6%
• Nasdaq Composite: -16.1%
• Russell 2000: -10.4%
• Bitcoin (BTC-USD): -17.7%
• Ether (ETH-USD): - 30.4%

Stocks to Watch

Before trading kicks off, Genius Sports (GENI) and PLx Pharma (PLXP) are expected to report their quarterly results. 

Despite reporting in-line revenue for its February quarter, Oracle’s (ORCL) bottom-line results missed the consensus forecast of $1.18 by $0.05. For the quarter, Cloud services and license support revenues rose 8% in constant currency to $7.6 billion while Cloud license and on-premise license revenues were up 4% in constant currency to $1.3 billion. The company issued upside guidance for the current quarter with EPS of $1.40-1.44 vs. the $1.39 consensus with revenue up 6-8% YoY in constant currency.

Ulta Beauty’s (ULTA) January quarter results came in ahead of expectations for both revenue and EPS as comp sales for the quarter soared 24.1% higher year over year. All major categories delivered double-digit year-over-year comp growth during the quarter. Compared to the same quarter in 2019, comparable sales increased +15.4%. For its coming year, the company sees EPS of $18.20-18.70 with revenue in the range of $9.05-9.15 billion vs. the $9.14 billion consensus. In addition, Ulta shares it has a new $2 billion share repurchase authorization and targets repurchasing ~$900 million in the coming year. 

PG&E (PGE) and Ford Motor (F) announced a collaboration exploring how Ford's new F-150 Lightning electric vehicle (EV) can interact with the electric grid and provide electric reliability benefits to PG&E customers. As part of that effort, the two companies will test the F-150 Lightning and its Intelligent Backup Power bidirectional charging capabilities in providing backup power for customers' homes in PG&E's service area.

JP Morgan (JPM) is following Goldman Sachs (GS) in exiting Russia. Similarly, Burger King operator Restaurant Brands International has announced it has “suspended all of its corporate support for the Russian market, including operations, marketing, and supply chain.” Yum Brands (YUM) owner of KFC, Pizza Hut, Taco Bell, and Habit Grill is also in the process of closing locations in Russia.

Citing a steep decline in cases, United Airlines (UAL) will allow unvaccinated workers to return to their jobs starting March 28.

IPOs

There are no IPO offerings expected to price this week. Readers looking to dig more into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.

After Today’s Market Close

There are no companies expected to report their quarterly results. Those looking for more on which companies are reporting when, head on over to Nasdaq’s Earnings Calendar. 

On the Horizon

Monday, March 14

•  China: Import/Exports – February

Tuesday, March 15

• Eurozone: Industrial Production – January
• Germany: ZEW Current Situation & Economic Sentiment - March
• US: Empire State Index – March
• US: Producer Price Index – February

Wednesday, March 16

• US: Weekly MBA Mortgage Applications
• US: Import/Export Prices – February
• US: Retail Sales – February
• US: Business Inventories – January
• US: NAHB Housing Market Index – March
• US: Weekly EIA Crude Oil Inventories
• US: Fed FOMC Meeting

Thursday, March 17

• Eurozone: Consumer Price Index – February
• UK: Bank of England Interest Rate Announcement
• Japan: Consumer Price Index - February
• US: Weekly Initial & Continuing Jobless Claims
• US: Housing Starts – February
• US: Philadelphia Fed Index – March
• US: Industrial Production & Capacity Utilization – February
• US: Weekly EIA Natural Gas Inventories 

Friday, March 18

• US: Existing Home Sales – February
• US: Leading Indicators – February

Thought for the Day

“Wonder is the beginning of wisdom.” ~ Socrates

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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