Nasdaq, S&P 500 Futures Unfazed By Tesla Disappointment As Focus Shifts To Q4 GDP, Earnings: Analyst Sees Hope In This Bullish Indicator

U.S. stock futures held steady on Thursday despite a disappointing earnings print from Tesla, Inc. TSLA, which accounts for a 2.2% weighting in the S&P 500 Index. Earnings news remains mixed, potentially resulting in offsetting impacts. The focus shifts to preliminary fourth-quarter GDP data before the market opens and the European Central Bank’s rate decision, with traders anticipating the central bank to maintain its current stance.

Cues From Wednesday's Trading:

U.S. stocks closed with a mixed performance on Wednesday, as the Dow Industrials moved further away from its all-time highs, while the S&P 500 marked its fourth consecutive all-time closing high. The varied sentiment unfolded as traders absorbed a positive quarterly report from Netflix, Inc. NFLX and better-than-expected private sector activity data. The subdued sentiment might be attributed to concerns ahead of key economic data scheduled for release on Thursday and Friday.

Strength in the communication services sector, led by Netflix, along with gains in energy stocks, helped offset weakness in utility, real estate, material, consumer staples, and financial stocks.

US Index Performance On Wednesday

Analyst Color:

A Morgan Stanley analyst cautioned about going overboard over the recent market rally. “The S&P 500 Index well over the popular threshold for a bull run of a 20% gain from a trough… however, the index only recently finished recouping its bear-market losses and today sits just slightly above its January 2022 peak,” said analyst Lisa Shalett.

“With potential economic threats remaining and market uncertainties looming in 2024, investors may still need to have patience before a truly durable bull market can get underway.”

On the other hand, Ryan Detrick of Carson Group remains bullish. Sharing a chart that showed defensive sectors trending lower, the analyst said, “To see the defensive areas lagging is perfectly normal bull market behavior.”

“People ask me all the time what will change my bullish view. I say it is when these two lines start to go higher, that’ll get my attention.”

Futures Performance On Thursday

In premarket trading on Thursday, the SPDR S&P 500 ETF Trust SPY rose 0.15% to $486.13  and the Invesco QQQ ETF QQQ gained 0.25% to $426.89, according to Benzinga Pro data.

Upcoming Economic Data:

The Bureau of Economic Analysis is due to release its preliminary fourth-quarter GDP report at 8:30 a.m. ET. Economists, on average, expect annualized quarter-over-quarter growth of 2%, slower than the third quarter’s 4.9% growth. The spotlight will also likely be on the two inflation readings, namely the GDP price deflator and the price consumption expenditure index.

The Labor Department is all set to release its weekly jobless claims report at 8:30 a.m. ET. The number of individuals claiming unemployment benefits may have increased from 187,000 in the week ended Jan. 13 to 200,000 in the week ended Jan. 20.

The Commerce Department will release its durable goods orders and trade balance reports at 8:30 a.m. ET. The consensus estimate calls for a slowdown in the monthly growth of durable goods orders from 5.4% in November to 1.1% in December.

The trade balance report for December showed a narrower deficit of $88.70 billion compared to November’s $90.27 billion.

The Commerce Department is due to release its new home sales report for December at 10 a.m. ET. Economists expect the number to come in at a seasonally adjusted annual rate of 645,000 units in December, up from 590,000 units in November.

The Treasury will auction four- and eight-week bills at 11:30 a.m. ET and seven-year note auction at 1 p.m. ET.

See also: Best Futures Trading Software

Stocks In Focus:

• Tesla fell nearly 8% in premarket trading in reaction to its quarterly results, taking down along with its electric vehicle peers RIVN and Lucid Group, Inc. LCID.
Among other stocks moving on earnings are International Business Machines Corp. IBM (up over 7%), Las Vegas Sand Corp. LVS (up over 2%),  Comcast Corporation CMCSA (up over 3%),  Humana, Inc. HUM (down over 11%) and  Ameriprise Financial, Inc. AMP (down over 4%).
• Alaska Air Group, Inc. ALK, American Airlines Group Inc. AAL, Southwest Airlines Co. LUV, Nokia Oyj NOK, Union Pacific Corporation UNP, Xerox Holdings Corp. XRX, Dow, Inc. DOW,  Northrop Grumman Corp. NOC and Mobileye Global Inc. MBLY are among the other companies due to release their quarterly results ahead of the market open.
• Those reporting after the close include Capital One Financial Corp. COF, Intel Corp. INTC, KLA Corp. KLAC, T-Mobile US, Inc. TMUS,  Visa, Inc. V, and Western Digital Corp. WDC.

Commodities, Bonds, Other Global Equity Markets:

Crude oil futures climbed 1.21% to $76 in early European session on Thursday following Wednesday's nearly 1% rally.

The benchmark 10-year Treasury note fell 0.017 percentage points to 4.161% on Thursday.

Asian stocks mostly rallied, with Hong Kong and China once again leading the charge, and the European markets traded lower in late-morning trading ahead of the ECB rate decision.

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