Flash PMI Surveys and Earnings Spark a Stock Rally

Investors have responded positively to Flash PMI numbers from Japan, Europe and the UK overnight and into this morning. The first peek at February economic conditions has been mixed as Service surveys came in better than expected, but Manufacturing surveys came in softer than expected.

Markets are also digesting a positive response to Nvidia’s* earnings report and guidance. Both sales ($22.1B vs street $20.4B) and Earnings per share ($5.16 vs street $4.59), came in well above analyst expectations. Sales guidance for next quarter of around $24B was also better than expected and suggested continuing incremental growth.  The shares are currently trading up 12.4% premarket near $758.00, down from an overnight high near $774.00, but above the pre-earnings all-time high which was near $741.00. Booking Holdings* headlines stocks reporting after the close today.

Positive momentum for equity markets from overnight has continued into this morning. NASDAQ futures are up 2.1%, while S&P futures are up 1.3% and Dow Futures are up 0.5%. In Europe this morning, the Dax is up 1.4% but the FTSE is flat. Asia Pacific trading saw Tokyo soar 2.2%, Hong Kong climb 1.4% but Sydney finish flat.

With yesterday’s “higher for longer” Fed minutes and overnight economic news indicating central banks outside of China are under no pressure to start cutting interest rates, treasury yields are holding on to yesterday’s gains. The US 10-year treasury note yield is currently near 4.35%, while the German 10-year Bund yield is up above 2.45%.

Canada retail sales (0.9% vs street 0.8% and US jobless claims (201K vs street 218K) both came in better than expected. US Flash Manufacturing (street 50.5) and Flash Service (street 52.0) PMI numbers are due at 9:45 am EST, followed by US existing home sales at 10:00 am.

US Crude Oil is down 0.25%, giving back some of yesterday’s gains between inventory reports. Natural Gas is also backsliding after popping yesterday, down 4.1%. Metals are getting more support with Copper up 0.3% and Gold up 0.2%. Weekly US natural gas storage is due at 10:30 am EST today, followed by weekly DOE Crude Oil and Gasoline inventories at 11:00 am EST.    

*Shares of Nvidia and Booking Holdings are held in some portfolios managed by SIA Wealth Management.

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