Sentiments turn negative on Wednesday after the mixed performance in the previous session, as the focus shifts to some key Main Street data. Traders may prefer to move to the sidelines to see off some key economic catalysts due for the week. Earnings news for the day has been mixed, although some weak retail earnings could dent market mood.
That said, risk appetite is still alive and kicking, as evidenced by the continued surge in cryptocurrencies. A few Fed speeches and the inflation component of the preliminary fourth-quarter GDP report could help set the tone for Wednesday’s session.
Tuesday’s Market Recap:
U.S. stocks closed Tuesday’s session on a mixed note, as traders digested some soft data, including a bigger-than-expected decline in durables goods orders for January and an unexpected drop in the February consumer confidence.
The major indices opened Tuesday’s session uniformly higher before taking divergent routes. While the Nasdaq Composite hovered mostly above the unchanged line, the S&P 500 Index was confined mostly below the flat line in the morning session. The broader gauge recovered in the afternoon to close higher for the day but shy off its all-time high of 5,087.03.
The Dow Industrials ignored a firm start and spent a better part of the session in the red, and in the process, the 30-stock blue-chip average declined for a second straight session.
A majority of S&P sectors advanced on Tuesday, led by communication services and utility stocks. On the other hand, energy and healthcare stocks came under selling pressure.
Small-caps continued to shine, with the Russell 2,000 Index trading in the green throughout the session.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +0.37% | 16,035.30 |
| S&P 500 Index | +0.17% | 5,078.18 |
| Dow Industrials | -0.25% | 38,972.41 |
| Russell 2000 | +1.34% | 2,056.11 |
Analyst Color:
An analyst sees the recent small-cap outperformance as a reason to cheer. “Historically, small caps lead coming out of an economic downturn as markets prepare for lower rates from the Fed or the economic backdrop begins to bottom without help from the Fed,” said Quincy Crosby, LPL Financial’s Chief Global Strategist.
“Valuations in the small cap space are attractive but it’s primarily the underlying sectors, particularly industrials, biotechnology, technology and even financials that are attracting investor interest.”
The small-cap outperformance bodes well for the economy, he said. “As small-mid caps represent the most basic level of economic activity, the message they are telegraphing is that economic conditions remain solid and that future conditions similarly are positive.
Futures Today
Futures Performance On Wednesday ( as of 5:30 a.m. ET)
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.41% |
| S&P 500 | -0.30% |
| Dow | -0.32% |
| R2K | -0.66% |
In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust SPY slipped 0.31% to $505.36 and the Invesco QQQ ETF QQQ fell 0.41% to $435.80, according to Benzinga Pro data.
Upcoming Economic Data:
The Mortgage Bankers Association will release the results of its mortgage applications volume survey for the recent reporting week at 7 a.m. ET. Data for the week ended Feb. 16, released last week, showed mortgage loan application volume decreasing 10.6% on a seasonally adjusted basis on a week-over-week basis. The decline came as mortgage rates climbed back above 7%.
The Bureau of Economic Analysis is due to release the preliminary fourth-quarter GDP data at 8:30 a.m. ET. Economists, on average, expect the annualized quarter-over-quarter growth of 3.3%, in line with the advance estimate released in late January. Traders may also focus on the inflation components of the report, namely the GDP price index and the core personal consumption expenditure index.
The Commerce Department is scheduled to release its trade balance report for January at 8:30 a.m. ET. The consensus estimate calls for the trade deficit to widen from $87.89 billion in December to $88.4 in January.
The Energy Information Administration will release its customary weekly petroleum status report at 10:30 a.m. ET.
Fed speeches scheduled for the day include:
- Atlanta Fed President Raphael Bostic: 12 p.m. ET
- Boston Fed President Susan Collins speaks: 12:15 a.m. ET
- New York Fed President John Williams: 12:45 a.m. ET
See also: Best Futures Trading Software
Stocks In Focus:
- Coupang, Inc. CPNG rose over 8% in premarket trading following its results announcement.
- Other stocks moving on earnings are Agilent Technologies, Inc. A (up over 3%), Ambarella, Inc. AMBA (up over 12%), Beyond Meat, Inc. BYND (up over 55%), eBay, Inc. EBAY (up over 3%), First Solar, Inc. FSLR (up over 4.75%), Virgin Galactic Holdings, Inc. SPCE (down over 6%) and Urban Outfitters, Inc. URBN (down over 11%).
- DoubleVerify Holdings, Inc. DV slumped over 18% ahead of its earnings.
- Advance Auto Parts, Inc. AAP, Baidu, Inc. BIDU, Patterson Companies, Inc. PDCO, Taboola.com Ltd. TBLA and The TJX Companies, Inc. TJX are among the notable companies due to report ahead of the market open.
- Those reporting after the close include AMC Entertainment Holdings, Inc. AMC, c3.ai, Inc. AI, HP, Inc. HPQ, Monster Beverages Corp. MNST, Marathon Digital Holdings, Inc. MARA, Salesforce, Inc. CRM, Nutanix, Inc. NTNX and Snowflake, Inc. SNOW.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures slipped 1.10% to $78 in early European session on Wednesday after rallying 1.66% on Tuesday. The benchmark 10-year Treasury note edged down 0.02 percentage points at 4.295%.
Most Asian markets retreated on Wednesday, led lower by the Chinese and the Hong Kong markets. However, the New Zealand, Indonesian, and South Korean markets bucked the downtrend. The NZ50 Average of New Zealand rose after the country’s central bank maintained an unchanged interest rate at 5.50%.
European stocks showed tentativeness in early trading on Wednesday.
Cryptocurrencies rallied hard, with the apex crypto, Bitcoin BTC/USD, topping the $59,000 mark.
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