Stock futures traded higher Wednesday as Wall Street tries to recover its footing after a tough first session of the year.
Futures tied to the Dow Jones Industrial Average rose 55 points, or 0.17%. S&P 500 and Nasdaq-100 futures climbed 0.23% and 0.44%, respectively.
Sentiment was boosted in part by encouraging inflation data from Europe, including a greater-than-expected decline in the French consumer price index and a drop in German import prices.
U.S. stocks started 2023 on a downbeat note Tuesday as rising rate concerns, high inflation and recessionary fears crushed hopes that Wall Street could kick off the new year on a positive note. The S&P 500 and Nasdaq Composite lost 0.4% and 0.8%, respectively, while the Dow closed just below breakeven. The major indexes were also pressured by steep declines in Apple and Tesla shares.
“U.S. stocks were unable to hold onto earlier gains as restrictive policy and recession fears remained front and center for investors,” wrote Oanda’s senior market analyst Ed Moya in a note to clients Tuesday. “Discount buying triggered another bear market rebound that didn’t last long at all.”
Investors will gain more insight into what Fed members are thinking on Wednesday afternoon as minutes from the central bank’s latest policy meeting are released. Earlier in the day, the Job Openings and Labor Turnover Survey, or JOLTS, and ISM manufacturing data are due out.
Friday’s December jobs report also will be closely watched as it is the last read on the labor market before the Fed meeting in February.
“It is too early to start betting on a Fed pivot this year and that should make this difficult environment for stocks,” Moya said.
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General Electric — GE HealthCare Technologies begins trading as a separate company on the S&P 500 Wednesday. GE, in 2021, revealed plans to break up into three companies so it can focus on its aviation business. It plans to spin off its energy segment in 2024. Shares of GE were up about 2% in premarket trading.
STOCK SYMBOL: GE
Salesforce — Shares of the cloud giant rose about 2% in early trading after the company announced a restructuring plan that includes cutting its staff by about 10% and the closure of some offices.
STOCK SYMBOL: CRM
Chinese ADRs – Shares of Chinese companies listed in the U.S. jumped after Ant Group received approval to expand its consumer finance business in a sign of progress in resolving regulators’ concerns. Alibaba, which owns 33% of Ant, and JD.com rose more than 6% in the premarket. Pinduoduo added 4.5%.
STOCK SYMBOL: BABA
Microsoft — Microsoft shares dropped about 2% after UBS downgraded the tech giant to neutral from buy. UBS cited concern over the company’s Azure and Office businesses following a series of field checks.
STOCK SYMBOL: MSFT
Corning — Corning got a 2.5% lift after Credit Suisse upgraded the shares to outperform from neutral and raised revenue estimates, noting headwinds could change to tailwinds in 2023.
STOCK SYMBOL: GLW
Target — The retail giant lost 1.3% after Wells Fargo downgraded the stock to equal weight from overweight. The firm said Target’s “outlook has deteriorated” and the stock is not an attractive investment amid broader economic uncertainty.
STOCK SYMBOL: TGT
Merck — Merck’s stock rose about 1.7% after being upgraded to buy from neutral by Bank of America. Analysts cited the company’s consistent revenue upside, as well as the substantial progress it has made strengthening its cancer drug Keytruda’s position and softening the impact of when it goes off patent
STOCK SYMBOL: MRK
Pfizer — Shares of the pharma giant were down about 1.4% after being downgraded by Bank of America to neutral from buy. Among the reasons for the call was the uncertainty over the magnitude of the revenue decline for its Covid drugs, Comirnaty and Paxlovid.
STOCK SYMBOL: PFE
J.B. Hunt Transport Services — Shares of the transportation and logistics company fell nearly 2% in early trading after UBS downgraded the stock to sell, predicting that earnings will be flat to modest in 2023 and will show a “real cyclical decline.”
STOCK SYMBOL: JBHT
AstraZeneca — The pharmaceutical giant saw a 1.8% lift in its shares after the European Medicines Agency validated its Type II Variation application for the treatment of a “non-small cell lung cancer.”
STOCK SYMBOL: AZN
Honeywell — Shares of Honeywell slipped 1.8% in the premarket after being double downgraded by UBS to sell from buy. The firm said shares are at a premium and it’s anticipating an order slowdown.
STOCK SYMBOL: HON
Tesla — Shares gained 1% in the premarket. The stock dropped 12% Tuesday, a day after the electric-vehicle maker reported missing expectations on fourth-quarter delivery and production numbers.
STOCK SYMBOL: TSLA
FULL DISCLOSURE:
/u/bigbear0083 has no positions in any stocks mentioned. Reddit, moderators, and the author do not advise making investment decisions based on discussion in these posts. Analysis is not subject to validation and users take action at their own risk.
DISCUSS!
What’s on everyone’s radar for today’s trading day ahead here at r/stocks?
I hope you all have an excellent trading day ahead today on this Wednesday, January 4th, 2023! 🙂
