OPENING CALL
Stock futures pointed mostly lower on Monday ahead of a week filled with congressional testimony from Jerome Powell and the monthly jobs report.
"Bears appear to remain in capitulation mode, nervous investors seem to be finding confidence to stay in stocks, and the leveraged crowd appears to be learning to accept the likelihood that the Fed has no intention of cutting rates soon with last week's PCE deflator data for January showing inflation still sticky and the central bank's inflation target rate still at some distance away," Oppenheimer Asset Management said.
Overseas Markets
Japanese chip stocks got a boost from the AI frenzy, helping the Nikkei 225 close above 40,000 for the first time. Korean semiconductor-related companies also got in on the action, with Hanmi closing up over 12%.
Premarket Movers
Coinbase rose around 7% premarket, lifted by bitcoin's climb. The cryptocurrency traded above $65,000 Monday.
ADRs of Li Auto declined 7.2%. The electric-vehicle maker on Friday unveiled the Mega, the company's first high-voltage battery-electric vehicle. The car was priced at 559,800 yuan [$77,785], slightly higher than analysts expected.
Macy's was rising 12% after Arkhouse Management and Brigade Capital said they raised their offer to buy the retailer by almost $1 billion.
New York Community Bancorp rose modestly premarket, after closing down 26% Friday. NYCB said last week that it had found "material weaknesses" during an internal review, and its chief executive stepped down.
Nvidia rose 1.3% in premarket trading after it closed Friday with a market cap above $2 trillion for the first time.
Spirit AeroSystems was up 2.2% after Boeing confirmed Friday it was in discussions to acquire the jet-fuselage supplier.
Super Micro Computer and Deckers Outdoor will join the S&P 500 before the opening of trading on March 18. Shares of Super Micro were up 14%, while Deckers rose 6.6%. The two companies will replace Whirlpool and Zions Bancorp in the index.
Taiwan Semiconductor Manufacturing rose to a record high in Taipei, according to Bloomberg, jumping 5.2% to NT$725. U.S.-listed shares were rising 4.3%.
Friday's Post-Close Movers
Aadi Bioscience said it has received data that further supports Fyarro for the treatment of malignant PEComa. Shares of the biotechnology company rose 24%.
BioVie on Friday said it's planning a public offering of common stock and warrants. Shares of the biotechnology company fell 21%.
Watch For:
Earnings from GitLab, AeroVironment, Stitch Fix, Coherus Biosciences
Today's Top Headlines/Must Reads:
- Traders Are Betting More Aggressively Ahead of Economic Data
- Is Your 401(k) Destroying Capitalism?
- U.S. Defeat in Micron Trade-Secrets Case Reveals Struggle Countering Beijing
MARKET WRAPS
Forex:
The dollar is more likely to rise ahead of Friday's non-farm payrolls data, which are still forecast to show solid jobs growth and to keep markets expecting that interest rates won't be cut before the summer, ING said.
"The balance of risks for the dollar before U.S. payrolls looks slightly tilted to the upside and DXY could find some good support above 104.00."
The data will help indicate whether January's bumper figures were an outlier, ING said.
EUR/USD started the week at the upper end of a 1.0800-1.0850 range, but euro strength could be an opportunity to take profit as the U.S. economy continues to outperform the eurozone, Danske Bank Research said.
Morgan Stanley Research said betting on EUR/USD falling remains an attractive, positive carry hedge for various economic scenarios, including the possibility of money markets pricing in earlier interest-rate cuts from the European Central Bank.
MS maintained a long one-year EUR/USD put--a bet on it falling--at 1.07.
Although eurozone economic data could beat expectations, especially with such a low bar, EUR/USD has barely reacted to any signs of this, it said.
"Its correlation to local economic data surprises has fallen to effectively zero."
Energy:
Oil futures were firmer in early European trade after OPEC+ agreed to extend voluntary production cuts of 2.2 million barrels a day through the second quarter of the year.
The group's move was widely expected by the market and reaffirms efforts to avoid a surplus of supply and prop up prices.
"Signs of tightness in the physical market continue to push crude oil higher," ANZ said.
"Output cuts by the OPEC+ alliance continue to reduce supply as the market worries about the renewed tensions in the Middle East."
Metals:
Base metals struggled higher, as data from China showed that weekly inventories for metals continued to rise last week as demand remained sluggish.
Data from the Shanghai Futures Exchange pointed to increased Chinese holdings of metals, at a time of weak consumption following the Lunar New Year holiday in mid-February, ING said.
Copper stocks in China jumped by 18% on-week to 214,487 tons as of Friday, the highest since March, 2023. At the same time, aluminum and zinc inventories both rose by more than 10% each.
TODAY'S TOP HEADLINES
How China Is Churning Out EVs Faster Than Everyone Else
China is speeding ahead in the electric-vehicle race. Riding the nation's EV boom, upstart automakers have eclipsed foreign rivals to develop cars faster, push the boundaries of smart tech and swamp consumers with choice.
Chinese automakers are around 30% quicker in development than legacy manufacturers, industry executives say, largely because they have upended global practices built around decades of making complex combustion-engine cars. They work on many stages of development at once. They are willing to substitute traditional suppliers for smaller, faster ones. They run more virtual tests instead of time-consuming mechanical ones. And they are redefining when a car is ready to sell on the market.
Apple Is Playing an Expensive Game of AI Catch-Up
Apple has finally parked its expensive car dreams. The timing is good, as its other ambitions require a lot of gas in the tank.
Apple took the formal step recently of telling employees on its car project-dubbed Project Titan-that it is shutting down the program and redirecting its efforts toward generative artificial intelligence, The Wall Street Journal reports. Neither are terribly surprising moves. The car effort has been under way for at least a decade with various starts and stops but ultimately made little sense for a company with no experience in producing any form of vehicle-and powerful reasons to avoid such a low-margin business.
Lawyers Who Got Musk Pay Struck Down Seek $5.6 Billion in Tesla Stock
Lawyers for a Tesla shareholder who helped scuttle Elon Musk's $55.8 billion compensation package asked a Delaware court on Friday to approve legal fees worth about $5.6 billion.
It would be a record-breaking payday for the attorneys if approved. The attorneys asked to be paid almost entirely in Tesla stock, a rare request from lawyers on the winning side of a verdict.
Japan's Nikkei Tops 40000 for First Time, Driven by AI Optimism
Japan's benchmark stock index closed above 40000 for the first time, driven by stronger corporate earnings and a surge in chip-related stocks seen as likely to benefit from investments in artificial intelligence.
Chip maker Renesas Electronics rose 4.9% and semiconductor-testing equipment maker Advantest climbed 3.7%.
China Cancels Premier's Post-NPC Press Conference in Break With Tradition
China has canceled the press conference its premier holds at the conclusion of the annual "Two Sessions" meeting, ending a decadeslong tradition.
"There will be no premier's press conference after the second session of the 14th National People's Congress ends this year," NPC spokesperson Lou Qinjian said at a briefing Monday. The arrangement will last for the remainder of the current NPC's term, barring special circumstances, Lou said. The current NPC's term is expected to last until 2028.
Stock Funds Rise 5.2% Thanks to 'Magnificent Seven'
Stock-fund investors continue to move past last fall's sour market. But the question is how long it will last, with much of the gains coming from the Magnificent Seven stocks.
The average U.S.-stock fund in February notched a total return of 5.2%, according to Refinitiv Lipper data, after being flat in January. The overall market is on a four-month winning streak that has sent the Dow, the S&P 500 and Nasdaq to records.
Saudi-Led Oil Producing Nations Extend Output Cuts
The Organization of the Petroleum Exporting Countries and its allies have collectively agreed to extend voluntary production cuts through the end of June, constricting global oil supplies for another quarter.
Saudi Arabia, United Arab Emirates, Kuwait, and Algeria agreed to the moves, which are in addition to previous rounds of production cuts that are slated to remain through the end of 2024, and come as U.S. oil production has continued to surge.
Russia's Backdoor for Battlefield Goods From China: Central Asia
SINGAPORE-Two years after the invasion of Ukraine, drones and U.S.-made computer chips are increasingly flowing to Russia from China through Central Asian trade routes, showing the difficulty of strangling supplies to Moscow's war effort.
Trade routes snaking through former Soviet republics Kazakhstan and Kyrgyzstan are among the many paths into Russia for so-called dual-use goods-singled out by the U.S. and its allies because they can be used on the battlefield.
U.S. Defeat in Micron Trade-Secrets Case Reveals Struggle Countering Beijing
U.S. officials across the political spectrum have described Chinese corporate theft as a defining threat of our times. A Justice Department loss last week underscores the challenges in addressing it.
(MORE TO FOLLOW) Dow Jones Newswires
03-04-24 0620ET
