Stock futures were building on their modest gains from early this morning after data showing slightly slower economic growth with easing price pressures mitigated rate hike jitters triggered by Federal Reserve chairman Jerome Powell's testimony to Congress on Tuesday. Powell set off a freefall in equities when he indicated that the Fed could consider four rate hikes in 2018 if economic data warrants.
The US economy grew at an annualized rate of 2.5% in the fourth quarter, a slight revision from the 2.6% growth rate initially reported, and in-line with Wall Street's expectations. Additionally, the price component of gross domestic product was revised down to 2.3% from 2.4%.
Coming off Tuesday's panic selling across Wall Street, overseas bourses were a sea of red in reaction to Powell's hawkish statements in addition to soft Japanese and Chinese manufacturing data. Japan's industrial production contracted 6.6% in February, while China's manufacturing PMI fell back to the cusp of the contracting/expanding threshold. The data produced outsized losses for Japan's Nikkei and China's Shanghai before spilling into European markets.
Leading into the GDP data, US futures were climbing off their overnight lows with the help of lower Treasury yields and a softer dollar, both of which were negatively impacted by Powell's testimony. The yield on the 10-year Treasury note is pulling away from 2.90% and is currently three basis points lower than yesterday's close.
Wednesday's remaining data includes the Chicago PMI, expected to drop to 65.0 in February from 65.7 previously, and the January pending home sales index, forecasted to show a modest 0.3% increase.
-Dow Jones Industrial up 0.18%
-S&P 500 futures up 0.14%
-Nasdaq 100 futures up 0.34%
Nikkei down 1.44%
Hang Seng down 1.36%
Shanghai Composite down 0.99%
FTSE-100 down 0.13%
DAX-30 down 0.37%
PRE-MARKET SECTOR WATCH
(+) Large cap tech: Higher
(+) Chip stocks: Higher
(+) Software stocks: Higher
(+) Hardware stocks: Higher
(+) Internet stocks: Higher
(+) Oil stocks: Higher
(+/-) Biotech stocks: Mixed
(+/-) Drug stocks: Mixed
(+) Financial stocks: Higher
(+) Retail stocks: Higher
(+) Industrial stocks: Higher
(+/-) Airlines: Flat
(+/-) Autos: Flat
(+) STB (+24.96%) To be acquired by CDPQ-led group for $7.50 per share
(+) PHH (+24.88%) Agreed to be purchased by Ocwen ( OCN ) for $11 per share
(+) ETSY (+16.50%) Crushed Q4 profit estimates, issued upbeat guidance
(-) FTR (-24.46%) Reported a loss for Q4, suspended dividend
(-) ELF (-9.87%) Missed Q4 sales estimates, guided FY18 revenue below expectations
(-) TSRO (-9.83%) Reported weaker-than-expected Q4 profit and sales, issued weak FY18 sales guidance