Daily morning chai

Morning Briefing - Taking some profits following sharp advance higher The S&P 500 futures are retracing from record territory and trade 28 points, or 0.7%, below fair value at the end of a strong week. The benchmark index is up 2.3% over the prior three days. Intel (INTC 59.89, -2.57, -4.1%) and IBM (IBM 121.20, -10.45, -7.9%) are notable laggards in pre-market action following their earnings reports with shares down 4% and 8%, respectively. Intel exceeded top and bottom-line estimates and issued upbeat Q1 guidance, but recall that shares rose 6.5% yesterday after the results were leaked right before the close. IBM missed revenue estimates. More broadly, the market is taking a breather amid a lack of new catalysts and after having seen most earnings reports this week exceed expectations. Many market observers have cautioned about a potential pullback, though, so the negative bias today has contributed to a sharp uptick in the CBOE Volatility Index (23.30, +1.98, +9.3%) as investors assume hedging positioning. On the data front, investors will receive the flash IHS Markit Manufacturing and Services PMIs for January at 9:45 a.m. ET, followed by Existing Home Sales for December (Briefing.com consensus 6.50 million) at 10:00 a.m. ET. U.S. Treasuries trade mixed with longer-dated maturities seeing an uptick in demand. The 2-yr yield is up one basis point to 0.13%, while the 10-yr yield is down two basis points to 1.09%. The U.S. Dollar Index is up 0.1% to 90.24. WTI crude futures are down 2.7%, or $1.43, to $51.69/bbl. In U.S. Corporate news: IBM (IBM 121.20, -10.45): -7.9% after missing revenue estimates. The company beat EPS estimates and said it expects to grow revenue in 2021 after a 4.6% decline in 2020. Intel (INTC 59.89, -2.57): -4.1% following yesterday's 6.5% post-earnings gain. Recall, Intel's results were leaked right before the close. The company beat top and bottom-line estimates and issued upside Q1 guidance. Walt Disney (DIS 172.80, +1.52): +0.9% after the stock was upgraded to Buy from Neutral at UBS with a $200 price target. Adobe (ADBE 471.00, -1.02): -0.2% amid the negative bias in the futures market. On a related note, Goldman Sachs initiated coverage on the stock with a Buy rating.

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