OPENING CALL

There's a slightly gloomier tone evident early Friday, with stock futures ticking lower.

Meanwhile, investors are eyeing New York Community Bancorp , whose shares have plunged premarket.

The regional lender said last night it had found "material weaknesses" in some internal controls, replaced its chief executive and took a $2.4 billion impairment charge.

In recent trading

Stock futures edged down. Contracts tied to the S&P 500 lost about 0.2%.

The 10-year Treasury yield declined, on pace for a third straight day of losses. It had settled at 4.251% on Thursday.

Bitcoin hovered just above $62,000, in line with late-Thursday levels. The record high to beat: $68,990.90, hit in November 2021.

Asian indexes rallied, despite data showing Chinese manufacturing contracted for a fifth straight month. Hong Kong's Hang Seng Index rose 0.5% and the Shanghai Composite gained 0.4%. Japan's Nikkei 225 jumped 1.9% to a new record.

European stock indexes also rose. The Stoxx Europe 600 added 0.4%.

Premarket Movers

Advanced Micro Devices valuation topped $300 billion Thursday, the latest milestone in the fervor over semiconductor stocks. AMD stock gained more than 3%.

Autodesk projected a higher-than-expected increase in sales in the next fiscal year as its sees strong demand for its products. Autodesk stock rose more than 9%.

Dell Technologies reported a double-digit percentage increase in adjusted quarterly profit, as demand for AI-optimized servers heated up. Shares rose nearly 20%.

Plug Power shares fell more than 8% ahead of quarterly earnings from the startup, which specializes in hydrogen fuel cells.

Tesla is rolling out more discounts in China as it wages a price war with competitors like BYD. Shares ticked down modestly.

Post-Close Movers

B. Riley Financial warned about a delay in its 2023 annual report following a recent review by its audit committee of the company's transactions with the hedge-fund manager Brian Kahn. Shares dropped 15%.

Gritstone Bio said it would trim about 40% of its workforce. Shares fell 24%.

Sweetgreen guided for higher-than-expected revenue growth in the first quarter. Shares rose 14%.

Watch For:

University of Michigan Final Consumer Survey for February; ISM Report on Business Manufacturing PMI for February

Today's Headlines/Must Reads:

- Elon Musk's X Leans on His AI Startup

- Disney Family Rebukes Nelson Peltz, Praises Bob Iger in Shareholder Letters

- Imports Under Closely Watched U.S. Trade 'Loophole' Surge

- China's Coming 'Two Sessions' Put Plans to Jumpstart Economy in the Spotlight

MARKET WRAPS

Forex:

The ISM business manufacturing PMI index is expected to show a small increase which could help lift the dollar and push the euro below $1.08, DZ Bank Research said.

Meantime, SEB Research said the dollar is expected to stay strong during spring as expectations for a soft landing-where inflation slows without economic recession-fuel a narrative of U.S. economic outperformance.

Should core service inflation stop subsiding, we will quickly move into a no-landing state, which should also favor the dollar."

Risks include potential equity market downturns and tariff increases, which in turn could also support the dollar, SEB said.

Energy:

Oil futures were little changed following different demand indicators as China's latest data pointed to a fifth straight month of contraction in the manufacturing sector, while the U.S. PCE index showed inflation in line with economists' expectations.

"Brent crude prices continued to trade sideways this week," BMI said.

"However, timespreads for Brent futures contracts have widened. The move to stronger backwardation will be supportive of a more bullish stance for prices as markets are pricing in tightening in the months ahead."

Meanwhile, uncertainty over a potential ceasefire in Gaza and expectations that OPEC+ will extend its production cuts into the second quarter continue to weigh on sentiment.

Metals:

Base metals and gold fell slightly in early trading after U.S. inflationary readings came in-line with expectations, providing little incentive for prices to break out of their current ranges.

Industrial metals continue to underperform, with most experiencing losses after an expected demand rebound from mainland China following the Lunar New Year holidays failed to materialize, BMI said.

"Overall, in 2024, we expect to see only a slight improvement in industrial metal prices as weak Chinese demand and a subdued outlook across major markets continue to place a cap on metal prices."


TODAY'S TOP HEADLINES


Meta Says It Won't Renew Deals With News Publishers in Australia, U.S.

SYDNEY-Facebook owner Meta said it won't enter into new deals with traditional news publishers in Australia and the U.S., noting the number of people in those countries using a dedicated tab for news on Facebook dropped more than 80% last year.

In a blog post, the social media giant, which in 2021 blocked news in Australia amid a dispute with the government there over paying for news, said people will still be able to view links to news articles on Facebook, and that publishers will continue to have access to their accounts where they can post links just as anyone else.


WeWork Junior Creditors Committee Wants to Sue SoftBank

WeWork's official junior creditors committee is seeking court approval to sue SoftBank, the co-working space provider's biggest equity holder, alleging the Japanese conglomerate used WeWork's prebankruptcy debt restructuring deal to improve its position in the company's capital structure.

The committee said in a bankruptcy court filing Wednesday that SoftBank and another group of creditors representing 62% of WeWork's unsecured notes orchestrated the May 2023 debt restructuring to "mitigate their losses and elevate their position in" WeWork's capital structure, knowing that the company's bankruptcy filing was imminent.


Vanguard CEO Tim Buckley to Step Down

Vanguard Group Chief Executive Mortimer J. "Tim" Buckley will retire by year-end, the company said Thursday, capping a six-year tenure during which the investment manager's assets increased more than 80%.

Buckley was tasked with expanding a firm that was already a behemoth when he took over in 2018. Now with $9 trillion in assets under management, Vanguard is the second-largest money manager in the world after BlackRock. It has largely built itself by offering some of the lowest-cost funds in the industry.


EV Startup Fisker Raises Going Concern Warning After Troubled Debut

Electric-vehicle startup Fisker issued a going concern warning Thursday and said it would lay off 15% of its staff, following a series of stumbles in its first year of production.

Fisker's warning about its ability to stay in business was triggered by its abrupt transition from a direct-to-consumer sales model to using a traditional dealership network, which the company said weighed on sales. It also came as Fisker reported a worse-than-expected loss for the year, and said it missed its full-year production target of at least 13,000 units.


Inflation in Services Is Picking Up Again. That Could Delay Rate Cuts.

Progress in cooling inflation reversed last month, with two key inflation measures showing a pop in price growth rather than further deceleration toward the Federal Reserve's 2% annual target.

Sticky inflation in the services sector, particularly in housing, drove much of the gain. Services prices increased 0.6% monthly in January, according to Thursday's release of the latest personal-consumption expenditures index data, twice the 0.3% increase reported for December. January marked the fourth consecutive month that service inflation ticked higher monthly. On an annual basis, prices for services increased 3.9% last month.


China's Factory Activity Slows Again, Highlighting Limits of Government Measures

BEIJING-China's vast manufacturing sector remained in contraction for a fifth consecutive month in February, underscoring the difficulties facing the country's leadership as it seeks to support a faltering economy, and raising hopes for bolder policy moves when top officials gather for annual legislative meetings next week.

An official gauge of China's factory activities edged down to 49.1 from January's 49.2, the country's National Bureau of Statistics said Friday. A reading below 50 indicates a contraction in activity while a reading above that mark suggests an expansion.


China's Wobbly Start to the New Year

Spring is officially here in most of East Asia after last weekend's Lantern Festival, the last day of the traditional Lunar New Year festivities. So is China's first big data release of the season: February's purchasing managers indexes were released Friday, ending the data drought that always accompanies the country's festival period.

There were some hints of good news, particularly in services: The official services sector PMI hit its highest level since July, and the employment subindex notched its best reading since September. That is consistent with decent tourism spending numbers over the Lunar New Year holiday.


Biden and Trump Make Dueling Border Visits Amid Migrant Crisis

President Biden and former President Donald Trump made dueling visits to the U.S.-Mexico border Thursday, as the two likely 2024 opponents used Texas towns 300 miles apart to push for tougher border policies while blaming the other's party for failing to fix the migrant crisis.

The nationally televised events-each featuring meetings with law-enforcement officials, tours of border barriers and curious onlookers-highlighted the extraordinary importance of immigration as an issue in the presidential election that has become a top concern for voters both near and far from the border amid record illegal crossings.


Georgia Case Against Trump Takes Big Hit as Fani Willis Fights Disqualification

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03-01-24 0611ET