Zinger Key Points
- The Dow Industrials, the S&P 500 and the Nasdaq 100 all closed at fresh records on Wednesday.
- Despite this, an analyst said the stock market is not overvalued yet in the small-to-mid capitalization arena.
- Get New Picks of the Market's Top Stocks
U.S. stock futures suggest a subdued start for Wall Street on Thursday amidst anticipation of more earnings reports. The Dow may find support from Walt Disney Co.’s DIS premarket rally following a quarterly earnings beat, while bond yields hover above 4.1%. Oil is up for a fourth straight session, potentially lifting energy stocks.
Focus now shifts to the jobless claims report for labor market insights, with market overbought levels prompting a defensive stance. The S&P 500 nears the psychological 5,000 mark, awaiting momentum confirmation.
Cues From Wednesday's Trading:
U.S. stocks surged to record highs on positive earnings and comments from Federal Reserve officials. Major averages opened higher, consolidating later. Dow and S&P 500 closed at records, the Nasdaq Composite hit a 25-month high, and the Nasdaq 100 Index reached a new peak.
Nine of 11 S&P 500 sectors closed higher, led by IT, consumer discretionary, and communication services. Real estate and consumer staple sectors saw modest weakness.
US Index Performance On Wednesday
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +0.95% | 15,756.64 |
| S&P 500 Index | +0.82% | 4,995.06 |
| Dow Industrials | +0.40% | 38,677.36 |
| Russell 2000 | -0.17% | 1,953.63 |
Analyst Color:
The market breadth will likely improve, according to comments from economic David Rosenberg. He shared a chart showing the earnings growth split between the “Magnificent Seven” stocks and the remaining 493 S&P 500 companies, which showed contribution from the former offsetting the negative growth of the latter.
“This year will be a different story, with earnings growth for both segments set to change course… good news for value investors!” the economist said.
The view was echoed by fund manager Louis Navellier in a recent note. “The stock market is not overvalued yet in the small-to-mid capitalization arena, so the rally this year could be a ‘launching pad’ that propels our stocks dramatically higher for 2024 and beyond,” he said.
Futures Today
Futures Performance On Thursday
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.13% |
| Dow | -0.13% |
| S&P 500 | -0.09% |
| R2K | -0.43% |
In premarket trading on Thursday, the SPDR S&P 500 ETF Trust SPY moved down 0.12% to $497.52 and the Invesco QQQ ETF QQQ slipped 0.09% to $431.59, according to Benzinga Pro data.
Upcoming Economic Data:
The Labor Department is scheduled to release its customary weekly jobless claims report at 8:30 a.m. ET. Economists, on average, expect the number of individuals claiming unemployment benefits to come in at 220,000 in the week ended Feb. 3, down from the previous week’s 224,000.
The Commerce Department is due to release its wholesale inventories report for December at 8 a.m. ET. The consensus calls for a 0.3% month-over-month increase in wholesale inventories compared a 0.2% drop in the previous month.
Richmond Fed President Thomas Barkin speaks will speak at 12:05 p.m. ET.
The Treasury is set to auction 30-year bonds at 1 p.m. ET.
See also: How to Trade Futures
Stocks In Focus:
- Shares of data-streaming platform Confluent, Inc. CFLT and British chipmaker Arm Holdings plc. ARM jumped over 25% each in premarket trading following their quarterly results announcement.:
- Other stocks moving on earnings are Monolithic Power Systems, Inc. MPWR (up over 7.5%), GoPro, Inc. GPRO (down over 7%), News Corporation NWS (up over 3%), O’Reilly Automotive, Inc. ORLY (down about 5%), PayPal Holdings, Inc. PYPL (down over 8.6%), Disney (up about 6.50%), and Wynn Resorts Limited WYNN (up about 2.50%).
- Canadian Natural Resources Limited CNQ, ConocoPhillips COP, CyberArk Software Ltd. CYBR, Duke Energy Corporation DUK, Harley-Davidson, Inc. HOG, The Hershey Company HSY, Philip Morris International Inc. PM, Ralph Lauren Corporation RL, S&P Global Inc. SPGI, Spirit Airlines, Inc. SAVE, and Under Armour, Inc. UAare among the major companies that report ahead of the market open.
- Notable names reporting after the close include Affirm Holdings, Inc. AFRM, Boyd Gaming Corporation BYD, Cloudflare, Inc. NET, Expedia Group, Inc. EXPE, Illumina, Inc. ILMN, Lions Gate Entertainment Corp. LGF LGF, Pinterest, Inc. PINS, Take-Two Interactive Software, Inc. TTWO, Synaptics Incorporated SYNA and VeriSign, Inc. VRSN.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures rose 0.84% to $74.48 in early European session on Thursday, adding to the 0.75% gain in the previous session. The commodity has gained in all three sessions of the week so far. The benchmark 10-year Treasury note rose 0.025 percentage points to 4.123% on Thursday.
Asian stocks ended Thursday’s session mixed, with China extending its gains amid hopes of policy support for the battered domestic equity market. The hopes gained ground amid the release of a duo of inflation reports that suggested the continuation of deflationary conditions.
Japan’s Nikkei 225 average was among the outperformers in the region as it rose to fresh 34-year highs, while the Hong Kong and Indian markets fell sharply.
Major European markets traded in the green in late-morning trading amid the ongoing earnings news flow, with the Euro Stoxx 50 Index showing moderate gains.
Image made via AI on MidJourney
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