1. Futures edge higher
U.S. stock futures advanced slightly on Wednesday, suggesting a small rebound on Wall Street after equities notched their worst day so far this month following a stronger-than-anticipated U.S. inflation reading.
By 04:59 ET (09:59 GMT), the S&P 500 futures contract had added 21 points or 0.4%, Nasdaq 100 futures had risen by 110 points or 0.7%, and Dow futures had ticked up by 94 points or 0.3%.
The main indices in New York all tumbled in the prior session, with the benchmark S&P 500 dropping by 1.4%, the tech-heavy Nasdaq Composite losing 1.8%, and the blue-chip Dow Jones Industrial Average dipping by 1.4%. Traders were reacting to data on Tuesday which showed that overall U.S. consumer price gains were hotter than economists had predicted in January, pointing to a lingering stickiness in inflationary pressures that further dashed hopes for an imminent interest rate cut by the Federal Reserve.
Analysts at ING said the release was “uncomfortable reading” for the Fed. The U.S. central bank has made defeating price growth one of the main targets of an aggressive tightening campaign, but inflation remains stubbornly above its stated 2% target.
Markets all but erased their previous bets for a 25 basis point reduction at the Fed’s March policy meeting and lowered the chances of one in May. U.S. government bond yields, which typically move inversely to prices, climbed in the wake of the figures, weighing in particular on rate-sensitive megacaps like Google-parent Alphabet (NASDAQ:GOOGL), Facebook-owner Meta Platforms (NASDAQ:META) and tech titan Microsoft (NASDAQ:MSFT).
2. Lyft shares curb aftermarket gains on guidance typo
Shares of ride-sharing firm Lyft severely curbed their aftermarket gains on Tuesday after its chief financial officer said that the company had erroneously overstated a key full-year margin forecast.
Lyft had initally said that it expects to post 500 basis points of margin expansion in 2024, sending shares soaring in extended hours dealmaking. But the euphoria was later doused when CFO Erin Brewer told analysts in an earnings call that Lyft had misstated this outlook in its press release. Instead, the company actually sees growth at a more modest 50 basis points.
In premarket trading, Lyft shares retained some of that earlier surge thanks in part to predictions that it will be free cash flow positive this year for the first time ever. Fourth-quarter earnings also topped Wall Street estimates.
Other corporate reports are slated for release on Wednesday, including quarterly results from cloud solutions provider Cisco Systems (NASDAQ:CSCO), hydrocarbon exploration business Occidental Petroleum (NYSE:OXY), and packaged food group Kraft Heinz (NASDAQ:KHC).
3. Sony confirms plan to list financial services unit
Sony (TYO:6758) has said it will move to list its financial services arm next year, granting some support to shares after the Japanese conglomerate slashed its forecast for sales of its all-important PS5 gaming console.
In a statement, Sony confirmed earlier plans to list the division, which includes services like insurance and digital banking, adding that it will keep a stake of just under 20% in the business.
But Sony warned that sales of the PS5 for the year ending in March will come in at 21 million units, down from its prior guidance of 25 million units, due to weak demand over the all-important holiday shopping season. Operating profit at its games unit also declined by around a quarter on hardware promotions and lower sales of first-party titles, although this was partially offset by strength at its movies, music and chips segments.
Overall operating income at the Walkman inventor grew by 10% to 463.3 billion yen ($1 = 150.66 yen), above expectations. Japan-listed shares in Sony closed marginally lower on Wednesday.
4. Bezos sells $4 billion in Amazon stock in past week
Amazon.com’s (NASDAQ:AMZN) multi-billionaire founder Jeff Bezos has sold more stock in the e-commerce behemoth, increasing the total value of his share sales over the past week to around $4 billion.
In a securities filing on Tuesday, Amazon said that Bezos, the firm’s executive chairman who boasts an estimated net worth of over $190B according to Forbes, had offloaded 12 million shares for about $2B between Friday and Monday. Bezos has now sold 24 million shares this month.
Amazon had earlier announced that Bezos is planning to sell 50 million shares — worth approximately $8.4B at current prices — by the end of next January. The move comes as Amazon’s stock price has spiked by over 50% over the past twelve months, and is currently hovering close to an all-time high.
Even after the sales, Bezos remains the largest shareholder in the company, according to S&P Capital IQ data cited by the Financial Times.
5. Oil muted
Oil prices hovered around the flatline in European trade on Wednesday as traders gauged an outsized build in U.S. crude inventories and the hot U.S. inflation reading.
Brent oil futures expiring in April had added 0.1% to $82.82 a barrel, while West Texas Intermediate crude futures were broadly unchanged at $77.57 per barrel by 05:00 ET. Both contracts were in sight of a two-week high.
Crude prices were earlier hit by signs of sticky U.S. price gains, which were viewed as a potential cause for the Fed to keep interest rates higher for longer — a trend that could stymie economic activity and, in turn, oil demand in the coming months.
But the declines were partly mitigated by data from the American Petroleum Institute (API) showing that U.S. crude inventories grew by 8.5 million barrels in the week to February 9, much more than estimates for an increase of 2.6 million barrels. Government inventory numbers are due later on Wednesday.
Meanwhile, geopolitical tensions persist in the Middle East and Russia, threatening to exacerbate concerns around supplies out of these crucial production regions.
Source: Economy - investing.com
