3 Hot Things In the Market Right Now

  • Roku (ROKU) shares plunged 17% in pre-market trading on tepid first quarter guidance. Here's what the company's CFO just told TheStreet.
  • Bullish sentiment on the markets has plummeted 17.5 points the past three weeks (lowest since mid-September), according to data tracked by Yardeni Research. 
  • New Dine Brands Global (DIN) CEO Steve Joyce told TheStreet's sister publication The Deal he is on the hunt for deals. Read more here.

Market Snapshot

Wall Street futures suggest a modest move to the downside Thursday as global investors continue to re-price equities in reaction to hawkish minutes from the Federal Reserve that appear to cement the case for as many as four interest rate hikes this year as the economy continues to improve and inflation slowly accelerates.

U.S. stocks, however, could buck the global trend today ahead of jobless claims data and leading economic indicators data that may further bolster the Fed's bullish case for GDP growth and, by extension, an upward trend in consumer price inflation. Contracts tied to the Dow Jones Industrial Average were marked 18 points to the downside, indicating and implied opening decline of around 30 points from its Wednesday close.

S&P 500 futures, however, have edged modestly into the green rising 3.25 points, or 0.12%, by mid-morning in London.The stock market reactions reflect a global re-pricing of risk in the face of persistent rate hike signals from central banks in Britain, Europe, Japan and the United States, all of which are contributing to the upward moves in government bond yields, and U.S. Treasury notes in particular.

Benchmark U.S. 10-year paper touched a fresh four-year high of 2.957% yesterday before easing back to 2.92% in overnight Asia trade, but with more auctions on the slate for today, 10-year notes could test the 3% level that many analysts suggest could trigger major portfolio allocation changes as early as this week.

"Members agreed that the strengthening in the near-term economic outlook increased the likelihood that a gradual upward trajectory of the federal funds rate would be appropriate," the Fed said in the first release of minutes under the tenure of new chairman Jerome Powell. The language helped lift the market's assumption of a March rate hike to 84.5%, according to the CME Group's FedWatch tool, compared to 71.8% only a month ago.

"The U.S. economy appears to be performing very well and, certainly, is in the best shape that it has been in since the crisis and, by many metrics, since well before the crisis," said Fed Governor Randal Quarles during a speech in Tokyo Thursday. ""With a strong labor market and likely only temporary softness in inflation, I view it as appropriate that monetary policy should continue to be gradually normalized."

In Europe, the Stoxx Europe 600 index, the region's broadest measure of share prices, fell 0.57%, even as the euro slipped below 1.23 against the resurgent U.S. dollar as investors rushed to re-price stocks in the wake of rising government bond yields and a weaker-than-expected reading of German business confidence published by the Ifo Institute in Munich. 

Britain's FTSE 100 slumped more than 1.1% at the opening bell as the pound held onto gains against the dollar despite a downwardly-revised reading of Q4 GDP, to 0.4% from 0.5%, that challenges the narrative of improving expectations for the U.K. economy and more rate hike suggestions from the Bank of England.

Rising bond yields have also continued to lift the U.S. dollar from its recent three-year lows against a basket of its global peers, with the dollar index rising a two-week high of 90.23 during Asia trading hours, a move which helped keep regional stocks -- especially in markets that are heavily-reliant on dollar-priced commodities -- in the red.

The region-wide MSCI Asia ex-Japan index was marked 0.89% lower heading towards the close of the Thursday session, although markets in China gained around 2% on the first day of trading after the country's week-long lunar New Year celebrations. Japan's Nikkei 225 benchmark, however, fell 1.1% to end the trading day at 21,736.44 points.

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