What to Watch Today
Stocks were rising on Wednesday after more key earnings reports.
The S&P 500 set a new intraday high and was near 5000.
Snap stock was tumbling after the social networking company provided disappointing profit guidance for its March quarter.
Poland is sending up a $1.2B “trial balloon” to enhance its defenses, according to the State Department.
It wants to buy an aerostat-based radar system from the Raytheon arm of RTX, the latest in a military-spending spree that encompasses tanks, missiles and F-35 combat jets.
Aerostat-based systems have had a mixed record in the U.S. military, notably Raytheon’s troubled JLENS program, but Israel has adopted them for missile defense.
Natural gas futures settle below the $2 mark as the market remains bearish about mild near-term weather forecasts and prospects of increased surplus storage entering the last leg of the winter heating season.
Natural gas for March delivery falls 2.1%, to $1.967/mmBtu, the lowest settlement for the front month since 2020 and first below $2 since March of last year.
“While natural gas futures remain in a bearish trend, the $2.00 psychological low will be a major support area as prices below that area usually don’t hold for the long term,” Dennis Kissler of BOK Financial says in a note.
Thursday’s EIA storage report is likely to show a 77-Bcf draw on inventories last week, according to a survey of analysts by The Wall Street Journal, the first of several expected below-average withdrawals.
Alibaba Group isn’t rushing its IPOs of Cainiao or Freshippo units.
The Chinese e-commerce giant in 2023 said it planned to split itself into six independently run companies that could seek separate IPOs. Executives on F3Q earnings call say that the caveat behind its announcement was that all these transactions were subject to market conditions, adding that market conditions currently aren’t in a state where it believes it can reflect the businesses true intrinsic value.
“We continue to explore value creation through separate financings of our business units, but given the challenging market conditions… we’re not in a hurry on the timing of these transactions,” say the executives.
The front-month contract for cocoa on the ICE has beaten the all-time record for prices, surging 3.8% to $5,420 per metric ton this afternoon.
The previous record close, set in July 1977, was $5,368 a ton.
Tight supplies due to crop disease continues to be the factor pushing cocoa higher, says Jaco Scoville of Price Futures Group in a note.
“Ideas of tight supplies remain based on more reports of reduced arrivals in Ivory Coast and Ghana continue,” says Scoville.
Disease appears to be running rampant in West African cocoa crops, with the area having received abundant rainfall this past summer before reverting to a very dry climate in the fall.
Triumph CEO Dan Crowley says he’s confident suppliers can ride the cascade of issues around the Boeing 737 MAX program, which accounts for 14% of its own sales.
“And I think this is a really important inflection time for Boeing and for the entire supply chain,” he says on an investor call.
He’s also confident monthly production on the 787–where Triumph contributes around $1M of content per plane–can rise to 10 or more.
Still, Triumph shares lose almost a fifth of their value after supply chain constraints weighed on quarterly results.
The 10-year Treasury auction saw strong demand from investors on Wednesday despite its large size.
The $42 billion auction—the largest ever according to Treasury data—was awarded a 4.093% in yield, lower than the average yield of 4.290% seen over the past six auctions where new a 10-year debt was issued.
It was also 0.9 basis points lower than the yield awarded in pre-bidding deadline.
It indicates government didn’t have to entice investors with a premium over the market to buy its debt.
Indirect bidders, such as foreign monetary authorities buying U.S. debt, bought 71% of the debt that they were offered versus the average of 66.4%, according to BMO Capital Markets rate strategist.
The 10-year yield was flat at 4.104% after the auction.
Warner Music Group’s fiscal 1Q underlying growth appears to have decelerated sequentially, driven by a slowdown in current activity and releases within the last 18 months, particularly at Atlantic Records and ADA, Wells Fargo analysts say in a research note.
The analysts are seeing a notable decline in the company’s current market share for on-demand audio streaming.
When Warner posts quarterly results on Thursday, the analysts expect management to discuss tech investments aimed at accelerating growth, as well as a turnaround plan for Atlantic Records.