Stock futures were little changed Thursday after Wall Street notched its best day since November, on the back of a tame inflation report and blowout bank results.
S&P 500 futures traded near the flatline. Nasdaq 100 futures added 0.1%. Meanwhile, Dow Jones Industrial Average futures slipped 153 points, or about 0.3%.
Bank of America shares inched higher after the company reported an earnings and revenue beat in the prior quarter. Shares of Morgan Stanley climbed 1.3% after also posting a top- and bottom-line beat in the fourth quarter on strong investment banking activity and fixed income trading revenue. The results come a day after other financial peers such as JPMorgan Chase and Goldman Sachs also beat fourth-quarter estimates.
On Wednesday, the 30-stock Dow surged more than 700 points, or 1.65%, while the S&P 500 rallied 1.83%. The Nasdaq Composite outperformed, advancing 2.45%. The small-cap Russell 2000 gained about 2%. A moderate improvement in core inflation in December’s consumer price index and strong earnings from big banks spurred a risk-on rally.
The 10-year U.S. Treasury yield pulled back sharply from a 14-month high reached earlier in the week. It last hovered around 4.667%.
“The bond market was starting to price in the risk of further hikes, and so you get this slightly softer-than-expected inflation data, which allows you to have this big relief rally, mostly in the interest rate sensitive parts of the market,” Cameron Dawson, NewEdge Wealth’s chief investment officer, said Wednesday on CNBC’s “Closing Bell.”
“Doesn’t mean that we’re necessarily out of the woods for things like small caps, in the volatility that they’ve been experiencing,” she added. “But the sigh of relief is welcome.”
Wall Street will glean more insight into the state of the economy Thursday. The December retail sales report is expected to show a 0.5% increase, down from a 0.7% rise the previous month, according to a Dow Jones consensus estimate. Weekly jobless claims are also due.
Elsewhere, Scott Bessent, President-elect Donald Trump’s pick for Treasury Secretary, will sit down before the U.S. Senate Committee on Finance Thursday morning, a hearing investors will parse for clues into tariffs and other policies from the incoming administration.
Morgan Stanley initiates Philip Morris at overweight as smoke-free products gain traction
Philip Morris‘ smoke-free portfolio is beneficial for the stock, according to Morgan Stanley.
Analyst Eric Serotta initiated coverage of the tobacco giant at overweight. Serotta’s $140 price target reflects upside potential of 18.1% over Wednesday’s close.
“We see continued upside for PMI’s stock as its reduced-risk smoke-free portfolio drives stronger than expected [long-term] sales and earnings growth and becomes an even larger percentage of the mix, which should drive upward re-rating for the stock,” Serotta told clients.
Serotta also said to expect “substantial growth ahead” for the smoke-free portfolio, which has found success as offerings like Zyn have taken off. Morgan Stanley said these products accounted for about 38% of net revenue in 2024, but that share should rise to between 55% and 65% by the end of 2030.
Philip Morris shares were little changed in Thursday’s premarket, but have slid 1.5% in the new year. That marks a pullback after rallying nearly 28% in 2024.
— Alex Harring
Target raised fourth-quarter sales guidance
Target hiked its fourth-quarter sales forecast on Thursday thanks to a strong performance during the holiday period.
The retailer expects comparable store sales to have grown 1.5%, versus a previous outlook that pointed to flat sales. That said, Target didn’t hike its fourth-quarter earnings guidance.
Target shares were up more than 2% on the news.
— Melissa Repko
UnitedHealth shares slip on mixed quarterly figures
UnitedHealth reported mixed fourth-quarter results, sending shares down more than 4%.
The company earned an adjusted $6.81 per share, beating an LSEG estimate of $6.72 per share. Revenue, however, came in at $100.81 billion, just below the $101.76 billion consensus. Revenue from premiums totaled $76.48 billion, below a StreetAccount estimate of $78.18 billion.
— Fred Imbert
Baird says DexCom shares can rally almost 30% after 2024’s sell-off
Baird turned optimistic on DexCom, saying shares can rebound after getting battered last year.
Analyst Jeff Johnson upgraded the diabetes technology stock to outperform from neutral and hiked his price target by $18 to $104. Johnson now anticipates shares can jump 29.4% over Wednesday’s close.
“Since DXCM’s surprising 2Q-24 shortfall, we believe new sales reps have steadily made progress, setting the stage for a potential inflection in productivity moving throughout 2025,” Johnson wrote to clients in a Thursday note.
Johnson said visibility on potential catalysts for 2025 and 2026 have improved. The analyst said he’s comfortable expecting growth to return to the low-to-mid teens by mid 2025, which can in turn push up EBITDA valuation when looking over the next 12 months.
DexCom shares climbed 2.4% in Thursday premarket trading. The stock has added more than 3% so far in 2025, bouncing after last year’s plunge of more than 37%.
— Alex Harring
Europe stocks open higher
European stock markets were higher early Wednesday, with the benchmark Stoxx 600 index up 0.47% at 8:30 a.m. in London.
France’s CAC 40 led gains among major bourses, up 1.27% as luxury firms broadly gained following results from Switzerland’s Richemont.
Technology stocks were 1.47% higher, with chipmakers boosted by forecast-beating earnings from Taiwan Semiconductor Manufacturing Company.
— Jenni Reid
JPMorgan Chase should see multiple expansion ahead, Tom Lee says
JPMorgan Chase could be primed for even more growth ahead, according to Fundstrat’s Tom Lee.
“JPMorgan is one of the best-executing banks,” the firm’s head of research said on CNBC’s “Closing Bell” on Wednesday. “The company spends a huge amount of money on technology, so I actually think JPMorgan should see its multiple expand.”
His remarks come after the company posted better-than-expected earnings and revenue for the fourth quarter. The stock rose about 2% during Wednesday’s session following those results.
On top of that, Lee believes there’s a multi-year period in store for banks in general where they’ll perform “very well.”
“This is a risk-on environment with animal spirits coming back and capital markets picking up, so it should be good for all banks,” he added.
— Sean Conlon
December retail sales data due out Thursday
The December retail sales report due out Thursday is expected to show a 0.5% increase, down from a 0.7% rise the previous month, according to a Dow Jones consensus estimate.
Excluding autos, it’s expected to have risen 0.4% last month, up from a 0.2% gain in the prior reading.
The data is set to release 8:30 a.m. ET.
— Sarah Min
Stock futures open little changed
U.S. stock futures opened little changed Wednesday night.
Dow Jones Industrial Average futures added 21 points, or 0.05%. S&P 500 futures rose 0.01%, while Nasdaq 100 futures dipped 0.04%.
— Sarah Min
