>>> What to look at today - 3rd of February 2023

US and European equity futures declined as disappointing earnings from Apple Inc., Amazon.com Inc. and Alphabet Inc. weighed on market sentiment. Asian shares were mixed, with a regional index slipping with Chinese stocks while Japanese and Australian benchmarks eked out gains.  Positive sentiment from surges in the Nasdaq 100 and S&P 500 Thursday evaporated as investors parsed late results from the tech trio that showed an economic slowdown is throttling demand for electronics, e-commerce, cloud computing and digital advertising.  Emerging-markets investor Mark Mobius said his firm didn’t participate in Adani Enterprises’ stock sale before it was pulled as concerns about its debt “scared us away.” Meanwhile, Goldman Sachs Group Inc. and JPMorgan Chase & Co. have told some clients that bonds related to Adani’s business empire can offer value. Japan’s 10-year yield slipped by 1.5 basis points to 0.48%, just below the ceiling of the central bank’s target range. A dollar index rose after earlier this week hitting the lowest since April last year. oil headed for a second weekly drop as optimism over a recovery in Chinese demand dimmed and US stockpiles kept rising. Gold rose slightly after slumping almost 2% on Thursday as traders sold off haven assets amid renewed optimism developed nations including the US are reining in inflation and may be able to avoid recessions. Investors across the globe have been cheering what they perceive as varying degrees of dovish tilts from central banks across the globe. US After Hours Earnings from mega cap names dominate headlines, mostly on downside -- GOOG -3.6%, QCOM -1.9%, SBUX -1.1%, AAPL -0.7%; others lower on earnings: BILL -21.1%, TEAM -13.1%, BZH -7.6%, F -6.1%, SYNA -5.6%.

Nikkei +0,39% Hang Seng -1,49% CSI -0,82% Shanghai -0,57% Shenzen -0,32%

Eur$ 1,0897 CNH 6,7463 CNY 6,7421 JPY 128,56 GBP 1,2222 CHF 0,9140 RUB 70,2944 TRY 18,8187 WTI$ 75,76 Gold 1,916 BTC 23,520 ETH 1,641

S&P -0,59% NAsdaq -1,50% EuroStoxx -0,23% FTSE -0,15% Dax -0,25% SMI -0,01%

Macro :
- Adani in Talks to Prepay Share-Backed Loans to Boost Confidence
- GOLDMAN, JPMORGAN SAY ADANI DEBT HAS VALUE FOR TRADING CLIENTS
- Billionaire Draper Pitches Sri Lanka on Bitcoin, Gets Rejected

Keep an eye on :
- ADYEN NA : London Payments Firm Moves $1 Billion a Month Despite Red Flags
- AAPL US : Apple 1Q Revenue Misses Estimates, *APPLE 1Q IPHONE REVENUE $65.78B, EST. $68.3B
- BX US : *BLACKSTONE AIMS TO SELL SPANISH BUILDINGS FOR €350M: EXPANSION
- BYS SW : Bystronic FY Sales Beats Estimates
- CABK SM : CaixaBank Sees 2023 NII at About €9B Versus €6.9b in 2022
- ALCLS FP : Cellectis Falls After Offering 22m ADS via Jefferies, Barclays
- CIFR US : +45%
- CINT SS : Cint 4Q Net Sales Misses Estimates
- COLOB DC : Coloplast Cuts FY Revenue Forecast
- BN FP : Danone Is Ready to Sell 75% of Russian Assets, Kommersant Says
- DIS US : The Walt Disney Company Underscores Board Strength And Focus On Value Creation, Sends Letter To Shareholders
- ELI BB : Elia Sees Risk of 15% Power Shortfall in Belgium by 2025: HLN
- FGR FP : Eiffage Consortium Wins ~€590M Toulouse Metro Contract
- F US : *FORD SHARES FALL AS MUCH AS 9% IN POSTMARKET ON 4Q PROFIT MISS
- GROW IM : Growens to Sell Email Service Provider Business for EU70m
- LIFCOB SS : Lifco 4Q Net Sales Beats Estimates
- MARA US : Crypto Miner Marathon Digital Says It Sold Some Bitcoin
- MAR PL : Martifer Wins €68m Order for Steel Structure in UK Rail Project
- MOVE SW : Medacta FY Revenue Beats Estimates
- NWG LN : NatWest CEO Rose to Attend Hearing After UK Lawmaker Pressure
- JWN US : Ryan Cohen Takes Sizable Stake in Nordstrom: WSJ
- ORA FP : Santander Is Not Interested In Buying Orange Bank, Botin Says
- RENE PL : Portuguese Electricity Demand Rose 4.1% in January, REN Says
- RNO FP : Renault, Nissan & Mitsubishi Confirm Feb. 6 Alliance Event
- RNO FP : Renault to Need Sign-Off From Nissan When Selling Stake: Asahi
- SRS IM : Angelo Moratti Says He Has Full Confidence in Saras
- SAN SM : Santander Is Not Interested In Buying Orange Bank, Botin Says
- SAN FP : Sanofi Forecasts Slower Profit Growth Amid Generic Competition
- SCATC NO : Scatec 4Q Ebitda Misses Estimates
- SKAB SS : Skanska FY Revenue Misses Estimates
- SBUX US : Starbucks 1Q Comparable Sales Misses Estimates: Snapshot
- SCMN SW : Swisscom Prelim FY Ebitda Meets Estimates
- TSLA US : China EV Registrations Rise 33.9% M/m in December
- TOM2 NA : TomTom 2023 Revenue Forecast Beats Estimates
- UBI FP : ‘Assassin’s Creed’ Creators Cling to Family Control at Ubisoft
- X US : U.S. Steel 4Q Adjusted EPS Beats Estimates: Snapshot
- VOD LN : Abu Dhabi’s Emirates Telecom Raises Stake in Vodafone to 13%
- VOW GY : Watch European Auto Stocks as Ford 4Q Profit Misses Estimates
- WDC US : Western Digital Share Sale Signals Spinoff Progress: ECM Watch
- YCA LN : Yellow Cake Offers £40.4m Shares at 412p/Share
- ROSE SW : Zur Rose Sells Swiss Business to Migros’s Medbase for CHF360m

FT : Ukraine’s allies push IMF to approve $14bn-$16bn loan

Ukraine’s allies push IMF to approve $14bn-$16bn loan
Fund to meet Kyiv officials in mid-February to negotiate package that would stretch rules about lending in war zones

Ukraine’s allies are pushing the IMF to finalise plans for a multibillion-dollar lending programme as they seek to strengthen the war-torn country’s finances.

The fund’s representatives are planning to meet Ukrainian officials in Warsaw in mid-February to advance discussions over a loan that could range from $14bn-$16bn, said officials familiar with the talks. The goal is to finalise it by the spring.

Ukraine has said it is facing a $38bn deficit this year, while the World Bank has estimated that more than half of its energy infrastructure has been destroyed by Russian attacks, compounding the pressure on its economy.

To cover the financing gap, the EU has put forward €18bn in a package agreed between its member states in December. But the bloc and other major partners of Kyiv want international lenders to accelerate their efforts to provide further support.

“The expectation is that other international donors including other G7 and international financial institutions would cover the rest of the financing need,” said Valdis Dombrovskis, European Commission executive vice-president, during meetings in Kyiv.

He told the FT that an IMF programme for Ukraine would carry “a certain signalling effect” that “can trigger also further donor support”. The sooner the loan arrived the better, he added. “These are not circumstances in which the IMF would normally lend, so it is a positive step that they are actually working on a proper disbursing programme.”

The US has also been pushing the IMF to deliver new financial aid quickly to Ukraine. “Treasury is encouraging the IMF and Ukraine to work together expeditiously toward agreeing on a programme,” the US Treasury said on Thursday. 

Securing approval for a multiyear aid package has been a prolonged process, given vast uncertainty about the financial situation in a war-torn country like Ukraine as well as its capacity to pay back what the IMF would lend out.

Kyiv has been pushing for funding from the IMF since September but talks have been held up by the conditions the fund would require to lend, as its rules do not allow financing to war zones. The fund is considering a three to four-year package of aid worth $14bn-$16bn, said people familiar with the discussions.

The fund previously granted $2.7bn of emergency funding and in December approved a four-month programme for Ukraine aimed at both shoring up the economy and preparing it for a significant IMF loan.

“We have been supporting Ukraine since the onset of the war and are committed to keep it going,” an IMF spokesperson told the FT. “We’re engaging closely with the Ukrainian authorities and hopefully move towards a fully-fledged programme as soon as feasible.”

Ukraine’s finance ministry declined to comment.

Advancing official loans to Ukraine is a complex process given the difficulties the country will have paying them back. The European Investment Bank on Thursday said it can only continue financing “risky” projects there if EU countries provide further guarantees.

Werner Hoyer, president of the EU’s lending arm, said: “If you want us to do more we need support because what we are doing in Ukraine is bloody risky.”

Since March last year, the EIB has distributed €1.7bn in funding to projects to help rebuild roads, trams and schools in Ukraine, with another €535mn due to be disbursed in 2023.

Talks on guarantees to underpin loans have resumed in recent weeks and Hoyer said he was “very confident” that member states would provide support. The discussions come as the EU prepares to start tense negotiations over its long-term budget later this year.

The European Bank for Reconstruction and Development has committed to €3bn worth of investment in Ukraine this year through loans and guarantees, while the World Bank said it has disbursed $16bn in aid to date.

FT : Billionaire Disney insider becomes pivotal figure in Nelson Peltz’s proxy f

Billionaire Disney insider becomes pivotal figure in Nelson Peltz’s proxy fight
Marvel chair Isaac Perlmutter owns large stake and is supporting activist push for board seat

A key question hanging over Disney as it battles a challenge from activist investor Nelson Peltz concerns how many of its shares are held by one of the company’s own employees: Marvel chair Isaac Perlmutter.

Perlmutter, the main backer of Peltz’s push to gain a seat on the Disney board, became the company’s second-largest individual shareholder in 2009 when he sold Marvel to Disney in a cash and stock deal worth $4.2bn. At the time only Steve Jobs held more shares, which he acquired after selling Pixar to Disney.

It is unclear how much stock the reclusive Perlmutter, who technically reports to chief executive Bob Iger, still holds. Assuming Perlmutter has not added or sold Disney shares since the Marvel deal closed, his stake would be worth $2.4bn, around 1 per cent of the company, according to FT calculations. Only investors with 5 per cent stakes or more have to disclose their holdings.

The size of Perlmutter’s stake matters because a large holding could tip the scale in favour of Peltz’s Trian Partners if the proxy battle is as close as some of the firm’s past fights.

Peltz, who acquired a $900mn stake in Disney last year, is known for his activist campaigns against big consumer products groups, including Procter & Gamble in 2017. In that proxy fight, both sides spent more than $100mn to woo shareholders, with Peltz winning by a paper-thin margin of 0.002 per cent.

Other significant individual shareholders at Disney include Jobs’s widow, Laurene Powell Jobs, and Lucasfilm’s George Lucas. Disney hopes they will vote against Peltz’s move to gain a board seat.

Having an employee support an activist challenge to a large corporation is “definitely a unique situation”, said Drew Chapman, chair of the shareholder activism department at Cole Schotz, a law firm. “It appears that Peltz started looking at Disney because of his relationship with Perlmutter.”

He added that big individual shareholders help each side in a proxy contest to build support. “Disney, more so than other companies, has a large retail investor base which has its own challenges to building support. Having prominent large shareholders starts to help build the numbers.”

Peltz’s activist campaign has become a distraction for Iger, who returned to Disney as chief executive in November with a mandate to revive the company and its sagging share price. Iger is expected to discuss restructuring and cost-cutting plans when the company reports results on February 8, Wall Street analysts say.

Iger had a tense relationship with Perlmutter during his first stint as chief executive, so much so that Iger often delegated communications with Perlmutter to Bob Chapek, according to former employees. Chapek served as chief executive for 33 months before Iger returned.

Perlmutter is said to have been outraged when Iger reorganised Marvel in 2015 to allow film producer Kevin Feige to report to the head of the Disney studio, not Perlmutter — a move analysts say has proved to be wise. Since then, Feige has been named Marvel president and overseen the release of some of the highest-grossing movies of all time, including Avengers: Endgame and Black Panther.

Peltz and Perlmutter began seeking changes at Disney months before Iger’s return as chief executive. According to documents that Disney filed with the US Securities and Exchange Commission, Perlmutter called Disney board member Safra Catz and general counsel Horacio Gutierrez last July to advocate for Peltz’s board seat. He met Chapek in Palm Beach, Florida, not long before his dismissal as chief executive to lobby on behalf of Peltz.

Perlmutter and Peltz, both octogenarian billionaires, are friends and live in Palm Beach. Their foundations have jointly donated to the local Salvation Army, and both were Trump donors, though Peltz said he regretted his donation after the January 6 2021 riot in Washington.

In his book, Iger described Perlmutter as “a legendarily tough, reclusive character” and as having a reputation for being “penurious to the extreme”. But while he acknowledged having “disagreements” with Perlmutter, he “respected where he’d come from in his life”.

Perlmutter served in the Israeli army in the six-day war of 1967 before moving to the US, where his first job involved standing outside Jewish cemeteries in Brooklyn and being paid by grieving families to lead funeral services. He began selling surplus goods and in the 1980s discovered he had a knack for investing in distressed companies — including Marvel.

Following Disney’s acquisition of Marvel, Perlmutter’s brusque style and strong opinions often put him at odds with colleagues, the FT reported in 2012. A female employee alleged that Perlmutter said he had a “bullet with [her] name on it” after a disagreement about an email. A racial remark allegedly made by Perlmutter was also relayed to senior Disney managers, the FT reported.

In a sign of the closeness of their relationship, Perlmutter attended the wedding of Peltz’s daughter last April, resulting in a rare photograph of the Marvel chief. (Perlmutter is so publicity-shy that he attended the 2009 premier of Iron Man in full disguise.) Also in the wedding photo are Peltz and CNBC host Jim Cramer, who was frequently critical of Disney management last year and in November led an on-air crusade for Chapek to be fired.

On Thursday, Trian issued a statement recommending that Disney shareholders replace board member Michael Froman, the former US trade representative, with Peltz. Trian said Froman had “overseen weak corporate governance at the company” and that Peltz would bring “a shareowner mentality to the boardroom”.

In response, Disney said it did not endorse Peltz or his son Matthew, who is running as an alternate. Such a move, the company said, would “threaten the strategic management of Disney during a period of important change in the media landscape”.

Some Wall Street analysts say they do not expect Peltz’s push for a board seat to succeed. Iger remains popular among investors, said Jason Bazinet, an analyst at Citi.

“I’d be shocked if a lot of people voted with Peltz,” Bazinet said. “There’s so much goodwill that Iger has with institutional investors that I would be stunned if they back an activist and slap Iger across the face.”

FT : China’s recovery might be a bit less than meets the eye

China’s recovery might be a bit less than meets the eye
Investors should not assume this upturn in economic growth will be just like previous ones

Are all Chinese economic recoveries, like Tolstoy’s happy families, alike? Many observers these days seem to think so. The recent boom in metals prices, for example, reflects a confidence in the market that this year’s acceleration in China’s growth rate will cast the same benign shadow over the global economy as earlier big recoveries have done. But that may not be the case.

The big Chinese economic recoveries of the past decade or so have been characterised by two features above all: they have been stimulus-driven and investment-led. Large amounts of support via credit markets and local government off-balance sheet financing vehicles were all typically focused on supporting activity in infrastructure and real estate. Fiscal and monetary stimulus delivered a surge in investment spending.

This kind of pattern was most obviously apparent in the recovery that followed the financial crisis and the one that followed China’s slump of 2015. During those years, other big economies were not doing much in the way of investment themselves because of the post-crisis austerity policies after 2008 and the effects of the eurozone crisis thereafter. And so China’s investment spending played a huge role in shaping global trade and commodities demand.

China’s economic performance in 2023 will be different in the sense that this year’s acceleration in growth will overwhelmingly be just the result of the country ending its lockdown approach to managing the spread of Covid. So, the economy will enjoy what is probably best described as a spontaneous recovery (not stimulus-driven) which will see the biggest effects on services and consumption (and not investment).

Why will monetary and fiscal policy be playing a more or less neutral role? As far as fiscal policy goes, a big increase in China’s budget deficits is unlikely because one of the reasons for the reopening in the first place is that Beijing has become a bit more anxious about the stock of debt on the public sector balance sheet. It is almost as if the government wants the recovery to fix its balance sheet problem, rather than use its balance sheet to fix the economy’s problem.

Equally, further significant monetary stimulus is unlikely, since Chinese interest rates are already considerably lower than those in the US, raising the risk of further capital outflows if monetary policy is loosened much more.

Although there will not be as much of a pivot towards looser macroeconomic policy as in the past, there is a different kind of pivot taking place these days: one from ideology towards pragmatism. Beijing is clearly less focused — for the time being — on “common prosperity” or the “disorderly expansion of capital”. Chinese policymakers’ body language towards the private sector is warm these days, although the authorities’ attitude towards the property sector is still characterised by the slogan “houses are for living in, not for speculating on”.

So, hopes for a stimulus-driven, investment-led recovery are likely to be disappointed. More Chinese households going to restaurants and theme parks will have a lot less impact on other countries than more Chinese high-speed trains or apartment buildings would.

To put it more technically, the “marginal propensity to import” — the amount of each renminbi of spending that boosts other countries’ exports — is likely to be lower for Chinese services and consumer spending than it is for investment spending. That is especially true from other emerging economies.

One other feature of China’s reopening this year bears thinking about, namely its consequences for the balance of payments. While the opening of China’s borders obviously benefits the traditional recipients of the country’s tourism largesse, its current account surplus might disappear fast: tourists spent a net $220bn abroad in 2019, and the pent-up demand for foreign travel is likely to be high.

Equally high, though, will be the pent-up demand to park capital abroad. The opportunities that Chinese have had to diversify their wealth internationally have been pretty limited during the past three years. In that time, not only has the country’s property market lost its appeal as a reliable store of wealth, but the China-US interest rate differential has also turned sharply negative. All in all, the incentive to get money out will probably be strong, which is likely to inject some volatility into the performance of the renminbi.

For sure the world is a lot better off with a Chinese recovery than without one. But it is best not to assume that this one will be just like those that have gone before.

>>> US After Hours Summary: Earnings from mega cap names dominate headlines, mostly on downside -- GOOG -3.6%, QCOM -1.9%, SBUX -1.1%, AAPL -0.7%; others lower on earnings: BILL -21.1%, TEAM -13.1%, BZH -7.6%, F -6.1%, SYNA -5.6%

After Hours Summary: Earnings from mega cap names dominate headlines, mostly on downside -- GOOG -3.6%, QCOM -1.9%, SBUX -1.1%, AAPL -0.7%; others lower on earnings: BILL -21.1%, TEAM -13.1%, BZH -7.6%, F -6.1%, SYNA -5.6%

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: SNCY +16.3%, BYD +6.4%, PCTY +4.8%, CLX +4.2%, GILD +3.8% (also increases dividend), MEOH +3.7%, POST +3.1%, OTEX +1.9%, VIAV +1.8% (also restructuring and workforce reduction plan), NFG +1.4%, X +1.3%, MWA +0.1%

Companies trading higher in after hours in reaction to news: LQDA +2.4% (PTAB has reaffirmed its original decision in the ‘793 IPR), NOC +1.6% ($500 mln accelerated share repurchase agreement), STRL +1.2% (reports new awards totaling $260 mln in Q4), ITI +1% (names new CFO), WW +0.6% (announces restructuring, workforce reduction, real estate restructuring), WEC +0.3% (will lead pilot project to test new form of long-duration energy storage), KSS +0.1% (names new CEO; enters into cooperation agreement with Macellum Advisors)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: BILL -21.1% (also authorizes new $300 mln share repurchase program), PFSI -13.1%, TEAM -13.1%, CLFD -8.1%, TWOU -7.9%, BZH -7.6%, F -6.1% (also declares supplemental dividend of $0.65/sh), CNMD -5.6%, SYNA -5.6%, LESL -5.1%, RGA -4%, GOOG -3.6%, GPRO -3.3%, MSTR -3.1%, CRUS -3%, SKX -2.4%, HUBG -2.1%, WWE -2.1%, CPT -2%, MTX -2% (also announces reorganization and new segmentation for 2023), QCOM -1.9%, SKYW -1.8%, AMZN -1.7%, OHI -1.7%, MCHP -1.5% (also increases dividend), DECK -1.3%, COLM -1.2%, SBUX -1.1%, AAPL -0.7%, CIM -0.7%, HIG -0.5%, CTSH -0.3%

Companies trading lower in after hours in reaction to news: SI -19.2% (currently facing US investigation over FTX and Alameda dealings, according to Bloomberg), CLLS -8.3% (launches $22 mln offering of ADSs), RIDE -3.5% (WKHS receives letter from RIDE purporting to terminate IP license), TWO -3.4% (commences 10 mln share offering), AIV -2.5% (names new chairman), WKHS -2.4% (WKHS receives letter from RIDE purporting to terminate IP license), RIGL -2.3% (announces publication of REZLIDHIA Phase 2 results), IAC -1.9% (names new COO), SWKS -0.7% (in sympathy with weak AAPL earnings), TSM -0.5% (in sympathy with weak AAPL earnings), QRVO -0.3% (in sympathy with weak AAPL earnings), PSN -0.2% (awarded contract for Megaproject in Saudi Arabia), AVGO -0.2% (in sympathy with weak AAPL earnings)

>>> US Close Dow -0.11% S&P +1,47% Nasdaq +3,25%

Closing Stock Market Summary

It was another strong session for the broader market as investors digested the latest slate of earnings news, although a sizable loss in Merck (MRK 103.46, -3.52, -3.3%) following its quarterly results kept the price-weighted Dow Jones Industrial Average in negative territory for most of the session. The Nasdaq Composite (+3.2%) led the upside charge thanks to a huge earnings-driven gain in Meta Platforms (META 188.77, +35.65, +23.3%).

Meta's pleasing results on the heels of Fed Chair Powell's press conference, where he took a less aggressive tone, fueled a sense that earnings growth and monetary policy may be better than feared this year.

Other mega cap stocks registered outsized gains in solidarity with Meta, bolstering the broader market. The Vanguard Mega Cap Growth ETF (MGK) rose 3.2% versus a 1.1% gain in the Invesco S&P 500 Equal Weight ETF (RSP) and a 1.5% gain in the S&P 500. 

Positive reactions to some data releases this morning also helped along the upside bias. A pleasing Q4 Productivity report, which featured a moderation in unit labor costs, left the market feeling good about inflation trends. Separately, weekly initial jobless claims hit their lowest level (183,000) since April 2022, but that did not deter the rally effort, as it was construed as another good portent for a possible soft landing.

The rally did hit an air pocket, though, when the S&P 500 failed to clear the 4,200 level. The pullback was likely driven by a feeling that the market had gotten overbought/overextended and was due for some consolidation. The downturn did not last long, however, and the main indices were able to climb back towards session highs ahead of the closing bell. 

Most of the S&P 500 sectors logged a gain today. The communication services sector (+6.7%) held the top spot a wide margin, followed by consumer discretionary (+3.1%) and information technology (+2.8%). The energy sector (-2.5%), meanwhile, was the worst performer as oil prices continued to lose ground ($75.68/bbl, -1.14, -1.5%).

Treasury yields pulled back noticeably yesterday in response to Fed Chair Powell's comments, but ultimately settled today's session little changed. The 2-yr note yield fell three basis points to 4.08% and the 10-yr note yield was unchanged at 3.40%.

  • Nasdaq Composite: +16.6% YTD
  • Russell 2000: +13.6% YTD
  • S&P Midcap 400: +12.2% YTD
  • S&P 500: +8.9% YTD
  • Dow Jones Industrial Average: +2.7% YTD

Reviewing today's economic data:

  • Weekly Initial Claims 183K (consensus 201K); Prior 186K; Weekly Continuing Claims 1.655 mln; Prior was revised to 1.666 mln from 1.675 mln
    • The key takeaway from the report is that the low level of initial claims is an encouraging signal for the labor market, which, in light of Fed Chair Powell's comments yesterday, is not the scare factor for the market that it has been in the past. On the contrary, the default view for the market now is to perceive it as good portent for a soft landing.
  • Q4 Productivity-Prel 3.0% ( consensus 2.5%); Prior was revised to 1.4% from 0.8%; Q4 Unit Labor Costs-Prel 1.1% (consensus 1.5%); Prior was revised to 2.0% from 2.4%
    • The key takeaway from the report is that the pickup in productivity helped tame unit labor costs, which is something the Fed will be pleased to see.
  • December Factory Orders 1.8% (consensus 2.2%); Prior was revised to -1.9% from -1.8%
    • The key takeaway from the report is that it shows manufacturing activity was otherwise weak in December when nondefense aircraft and parts orders are removed from the equation.

ArcBest (ARCB), Church & Dwight (CHD), Cigna (CI), Regeneron Pharma (REGN), and Zimmer Biomet (ZBH) headline the earnings reports ahead of tomorrow's open. 

Looking ahead to Friday, market participants will receive the following economic data:

  • 8:30 ET: January Nonfarm Payrolls (consensus 190,000; prior 223,000), Nonfarm Private Payrolls (consensus 175,000; prior 220,000), Unemployment Rate (Briefing.com consensus 3.6%; prior 3.5%), Average Hourly Earnings ( consensus 0.3%; prior 0.3%), and Average Workweek consensus 34.4; prior 34.3)
  • 9:45 ET: Final January IHS Markit Services PMI (prior 46.6)
  • 10:00 ET: January ISM Non-Manufacturing Index (consensus 50.3%; prior 49.6%)