S&P 500 (SPY) Report – 02/20/24

Good morning, traders!

The S&P 500 ($SPY) is trading below Friday’s close. Let’s get into it…

U.S. equity futures experienced a decline as concerns over persistent high interest rates and China’s economic struggles overshadowed the latest corporate earnings and news. The S&P 500 and Nasdaq 100 futures indicated a downward trend for Wall Street following a public holiday. Notably, Nvidia Corp saw a pre-market drop ahead of its anticipated earnings report, while Discover Financial Services’ stock surged after Capital One Financial Corp announced its acquisition. Other earnings reports saw Walmart and Medtronic performing well, whereas Home Depot reported a decline in revenue for the fifth consecutive quarter.

Market sentiment has been cautious, with traders adjusting their expectations for a Federal Reserve rate cut to June from March, influenced by Federal Reserve officials’ warnings and positive economic data surprises. The upcoming release of the Fed’s January meeting minutes and Nvidia’s earnings report are highly anticipated, as Nvidia’s performance, particularly in the context of artificial intelligence developments, could significantly impact market trends. The performance of major tech companies, including Nvidia, Amazon, Meta Platforms, and Microsoft, has been a major driver of the S&P 500’s rally this year.

In Europe, the Stoxx Europe 600 index remained stable after a period of gains, while European bonds showed improvement. The mining sector faced challenges due to a drop in iron ore prices, affecting companies like Anglo American Plc and Rio Tinto Plc. Conversely, Air Liquide SA saw a jump in its stock value following positive financial results, and Barclays Plc experienced a significant increase after announcing capital return plans.

In Asia, mixed reactions were observed in the stock markets following China’s mortgage rate cut, which did little to alleviate concerns about the country’s economic future. Japan, Australia, and South Korea’s markets all experienced declines, while Chinese stocks showed volatility. Despite these challenges, BHP Group reported healthy demand from China, highlighting the complexity of the global economic landscape. Additionally, the U.S. oil price maintained its strength amidst ongoing tensions in the Red Sea, underscoring the interconnectedness of geopolitical events and financial markets.

Tuesday Economic Events:
US Leading Index 10:00am ET

Fed Speaker Scheduled:
No Fed Speakers Scheduled

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