U.S. equity futuresare pointing to a slightly higher open as investors digest earnings reports from some of the country’s largest financial corporations. American Express (AXP), General Electric (GE) and Morgan Stanley (MS), reported fourth quarter results, along with tech giant Intel (INTC). Stocks have continued their record run and it looks like the trend may continue into the 3-day weekend. Volatility in the option market stabilized and finished the session slightly higher. The CBOE Volatility Index (VIX) will most likely remain low until a significant downside catalyst can hit equities. The risk protection complacency is baffling as many are predicting a much needed pull-back in the market.
Treasuries are little changed with the 10-year yield having traded narrowly around 2.84%. Overseas sovereign markets are mostly higher. Equities are mixed with Asia mostly lower, but European shares (DAX posted a new record high) and U.S. equity futures in the green. There wasn't much news overnight, but U.K. retail sales came in much better than forecast and posted the highest annual growth since October 2004. On the other hand, Japan consumer confidence fell, perhaps reflecting some concerns over the upcoming April tax increase. The U.S. calendar remains heavy ahead of the holiday weekend with December industrial production, preliminary January Michigan sentiment and November JOLTS. There's Fed-speak from the hawkish Lacker who is a nonvoter. On the earnings front, heavyweights GE, Morgan Stanley, Schlumberger report, along with several other financials.
Stock Stories:
IBM (IBM) – Cloudy with a chance of earnings – The tech services company plans to invest over $1.2B on data centers across the globe to expand its cloud offerings. The company’s stock has severely underperformed the overall market over the last year and reports its quarterly results next Tuesday. The stock is up slightly ahead of the opening bell.
Intel (INTC) – Chipped off – The tech bellwether posts mixed earnings report yesterday after the close. The company missed EPS and guided flat for the upcoming quarter. The shares are down 3.5% in the pre-market.
Major Economic Reports:
7:30 am CT- Housing Starts
8:15 am CT– Industrial Production
8:55 am CT – Consumer Sentiment
9:00 am CT -JOLTS
