Futures Indices
Dow Futures: +0.3%
S&P 500 Futures: +0.2%
Nasdaq 100 Futures: +0.4%
US 10-year Yield: 4.37% (+1bp)
Markets remain resilient! As we await new employment data, indices are rising in premarket trading, driven by hope for a managed economic slowdown.
Market Environment
US futures are climbing as investors digest disappointing private employment data released yesterday, pointing to an economic slowdown. ADP showed private job creation at its lowest in over two years, sparking a bond rally.
"Markets put in a strong performance yesterday, after a weak batch of US data led to a massive rally for U.S. Treasuries, which in turn supported risk assets," – Henry Allen, Deutsche Bank
Today, traders are watching weekly jobless claims (expected at 236K) and the Q1 productivity and cost report.
"Actual productivity matters enormously to long-term trend growth. Technology should boost productivity but also increases fear of the future." – Paul Donovan, UBS
Why is it important?
Today's numbers give us an early read on tomorrow's NFP report. Weaker data could support the case for more accommodative monetary policy, directly impacting bond yields and tech stock valuations.
Stocks to Watch
Biggest Gainers:
- Babcock & Wilcox (BW) +26.10%: Sale of its subsidiary Diamond Power International for $177M
- Verint Systems (VRNT) +18.79%: Results beat expectations, boosted by AI demand
- MongoDB (MDB) +16.64%: Strong results, raised forecasts and share buyback
- Tilly's (TLYS) +7.69%: Positive reaction despite results below expectations
- Five Below (FIVE) +7.23%: Better-than-expected results, despite CFO departure
- Xcel Brands (XELB) +9.52%: Mixed results but positive market reaction
Biggest Decliners:
- Winnebago (WGO) -6.56%: Disappointing preliminary Q3 results, pressure on the RV sector
Rating Changes
Upgrades
- Visa (V) → Mizuho upgrades to Outperform, target raised to $425
- Texas Instruments (TXN) → Bernstein upgrades to Market Perform, target to $180 (vs $140)
- Nvidia (NVDA) → Punto Research upgrades to Hold, target raised to $138
- Veeva Systems (VEEV) → CICC maintains Outperform, target to $325 (vs $270)
- MongoDB (MDB) → Capital One maintains Overweight, target to $261 (vs $209)
- Roblox (RBLX) → Piper Sandler maintains Overweight, target to $105 (vs $85)
- HealthEquity (HQY) → JP Morgan maintains Overweight, target to $125 (vs $100)
Neutral
- Dollar General (DG) → Daiwa remains Neutral, target at $107 (vs $81)
- Dollar Tree (DLTR) → Piper Sandler remains Neutral, target at $93 (vs $72)
- Five Below (FIVE) → Morgan Stanley maintains Market Weight, target at $135 (vs $110)
Downgrades
- Ferguson Plc (FERG) → Berenberg downgrades to Hold, target raised to $215
- Microsoft (MSFT) → Punto Research downgrades to Hold, target at $444.65
Conclusion & Key Events
To watch today:
- Weekly jobless claims (expected at 236K)
- US Q1 productivity and labor costs
Expected Volatility In:
- Technology sector (following moves in NVDA, MDB, VRNT)
- US bonds (sensitive to jobs data)
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Have a great session everyone!
Sylvain Mouilhaud: Stock Coach
