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House prices, Target earnings, Eurozone inflation - what's moving markets

Published 02/28/2023, 06:53 AM
Updated 02/28/2023, 07:37 AM
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By Geoffrey Smith

Investing.com -- The U.S. releases January data for house prices, amid signs of an incipient revival in the housing market. Consumer confidence data is also due. Bets on European Central Bank rate hikes reach a new peak after hot inflation data in Spain and France. Target beats expectations with its quarterly profit but its guidance for the coming year is weak. Rupert Murdoch acknowledges in a deposition that Fox News hosts endorsed false claims about the 2020 presidential election being stolen, and oil is higher ahead of U.S. inventory data later. Here's what you need to know in financial markets on Tuesday, 28th February.

1. House prices, consumer confidence due

The U.S. releases data on house price developments in January that will perhaps draw more interest than usual after surprisingly strong data for new and pending home sales, which suggested the market may be bottoming out.

The S&P Composite house price index has fallen for the last five months in a row in response to higher borrowing costs and stretched affordability.

Also due is the Chicago Federal Reserve’s purchasing managers index at 09:45 ET and the Conference Board’s consumer confidence survey at 10: 00 ET.

2. ECB rate hike bets intensify after hot January CPI numbers

Eurozone bond yields continued their relentless march upward after stronger-than-expected inflation numbers from France and Spain, the region’s second and fourth largest economies, came in significantly above expectations in February.

French consumer prices rose 0.9%, pushing the annual inflation rate up to 6.2%, and separate data showed that consumer spending was also surprisingly strong. In Spain, meanwhile, prices rose a hefty 1.0% on the month, against expectations for no change.

Benchmark 2-year bond yields rose as much as six basis points, with the 10-year Bund yield hitting a new 12-year high of 2.66%, as traders shifted their expectations for peak ECB rates to nearly 4%.

3. Stocks edge higher; Target reports high, but guides low

U.S. stock markets are struggling for direction in the overnight session, with attention likely to focus on month-end positioning in the relative absence of heavy fundamental news.

By 06:30 ET, Dow Jones futures were up 43 points or 0.1%, while S&P 500 futures and Nasdaq 100 futures were both up 0.2%. The benchmark cash indices had a moderately positive day on Monday, gaining by between 0.2% and 0.6%.

The day’s big early release is Target (NYSE:TGT), which issued full-year guidance seriously below Street forecasts despite a handsome earnings beat in the fourth quarter.

Other stocks likely to be in focus later include Zoom Video Communications (NASDAQ:ZM), up 6.8% in premarket after evidence of it expanding its footprint among corporate clients. Its guidance for both current quarter and full year were well ahead of market expectations. By contrast, Occidental Petroleum (NYSE:OXY) is under pressure after missing Street forecasts. AutoZone (NYSE:AZO), Advance Auto Parts (NYSE:AAP) and Sempra Energy (NYSE:SRE) are also all due to report early, while Monster Beverage (NASDAQ:MNST), HP (NYSE:HPQ) and Rivian (NASDAQ:RIVN) report after the close.

4. Fox hosts endorsed false election claims, says Murdoch

Rupert Murdoch admitted in a deposition that Fox News hosts including Sean Hannity, Lou Dobbs, and Maria Bartiromo had endorsed false claims of fraud in the 2020 presidential election.

The deposition was taken in connection with a defamation lawsuit brought against Fox (NASDAQ:FOXA) by Dominion Voting Systems. In it, Murdoch, Fox's biggest shareholder, testified that he didn’t believe any claim of major election fraud, but acknowledged that the company had been under pressure to run with the claims rather than risk losing viewers to rivals such as One America and Newsmax.

The disclosures come only a couple of weeks after Murdoch abandoned plans to reunite his media empire after splitting off Fox from News Corp. (NASDAQ:NWSA) – the owner of The Wall Street Journal and a string of U.K. and Australian news titles - a decade ago.

5. Crude rises ahead of U.S. inventories

Crude oil prices were a little stronger overnight, shrugging off weak economic data out of Japan, where industrial output fell by the most in seven months in January. Reports suggest that Saudi Arabia may raise its official selling prices again for April supported prices.

Attention is likely to focus on U.S. inventory data from the American Petroleum Institute at 16:30 ET. These have shown commercial crude stocks rising steeply in the last eight weeks – by a combined total of more than 50 million barrels. However, they still remain at historically low levels as a result of last year’s market tightness.

By 06:45 ET, U.S. crude futures were up 1.6% at $76.87 a barrel, their highest in nearly a week, while Brent crude was up 1.4% at $83.21 a barrel.

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