U.S. Stock Market Outlook | Three major stock index futures fall in unison, PCE data to be released tonight

1. Prior to the opening of the US stock market on Thursday, February 29, the futures of the three major US stock indexes all fell. As of the time of writing, the Dow Jones futures fell by 0.34%, the S&P 500 futures fell by 0.20%, and the Nasdaq futures fell by 0.17%. 2. As of the time of writing, the Germany DAX index rose by 0.52%, the UK FTSE 100 index rose by 0.34%, the France CAC 40 index fell by 0.01%, and the Europe Stoxx 50 index rose by 0.00%. 3. As of the time of writing, WTI crude oil fell by 0.31%, trading at $78.30 per barrel. Brent crude oil fell by 0.45%, trading at $81.78 per barrel. Market News Whispers in the wind! PCE data is set to strike tonight, causing fears of a "bloodbath" in the US stock market. At 21:30 on Thursday Beijing time, the US will release the Personal Consumption Expenditures (PCE) price index for January, providing more insights into inflation trends. The market expects the US January PCE price index to rise by 2.4% year-on-year, down from the previous 2.6%; and the core PCE price index to rise by 2.8% year-on-year, down from the previous 2.9%. This data is particularly important for the Fed and the market, as Fed officials focus more on PCE inflation rather than the more widely reported CPI. Given the nervousness among traders, unexpectedly high or low PCE data could shake financial markets. The report shows that the Fed's favored inflation indicatorthe PCE price indexrose by 1.8% annualized in the fourth quarter, instead of the initially estimated 1.7%. Even slight changes in inflation indicators seem enough to impact the market, as investors try to speculate on when the Fed might cut interest rates. US stocks may see a 10% pullback? Analysts: Rebound not strong enough, facing technical pressure. Craig Johnson, Chief Market Analyst at Piper Sandler, said the US stock market is likely to experience a 10% pullback soon; this is due to technical signals indicating that the market is not ready for further gains. Despite the strong rebound of the S&P 500 index since October last year, Johnson's forecast contradicts the views of most investors. With the hype around artificial intelligence and expectations of Fed rate cuts continuing to dominate the market, the benchmark US stock indices are projected to reach new highs in 2024. However, Johnson points out a more concerning picture within this upward trend. Currently, all three major benchmark indices are at the upper end of the price range from the past 18 months, indicating a potential upcoming market dip. Don't predict the top of the US stock market! Goldman Sachs strategy expert: Market momentum weak but no selling catalyst. Scott Rubner, Goldman Sachs strategy expert, stated that predicting the top of this round of US stock market gains is impossible. Rubner wrote in a report on Wednesday that as the economy appears in a balanced state, retail traders are attracted to the current momentum, prompting analysts to quickly raise their year-end targets. He notes that the stock market in March is "more crowded," the momentum is "weak," but there is no catalyst for potential selling. Apart from minor fluctuations this week, the US stock market has been on an upward trend since the end of last year. This record-breaking rise has been primarily driven by tech stocks, with Nvidia (NVDA.US) being the big winner in the artificial intelligence boom. Rubner previously considered Nvidia to be "the most important stock on Earth" before their outstanding earnings report, indicating a lack of significant pullbacks currently. US housing inflation easing may be temporary, inflation battle still steep and lengthy. US housing inflation is a key and long-awaited factor in controlling overall price increases and ensuring a shift towards rate cuts, according to Fed officials who believe this indicator will cool down in the next few months. However, tackling this challenge may still be a long way off, as new apartment supply channels may start to dry up, and existing single-family homes remain insufficient, leading to future price pressures in the housing category that accounts for about one-third of the Consumer Price Index (CPI). While the index used for the Fed's 2% inflation target is less sensitive to housing costs, Fed officials still view housing and rental dynamics as an important unresolved part of the inflation battle, potentially highlighting an inherent contradiction in the current tight credit policy stance. S&P Global: Chip manufacturers face water scarcity risk, chip prices may rise. S&P Global stated in a report that with advances in processing technology, semiconductor companies such as Taiwan semiconductor manufacturers face the risk of water scarcity, which could push chip prices higher. Chip manufacturing is a water-intensive industry, as factories consume large amounts of water daily for cooling machinery and ensuring wafers are free of dust or debris. Analyst Hins Li from S&P Global said, "There is a direct connection between water usage and the complexity of chips, as semiconductor fabs use ultra-pure water (freshwater treated to extremely high purity) to rinse wafers between every process." S&P Global pointed out in the report that due to capacity expansion and the demand for advanced process technology, water usage in the semiconductor industry is growing at a mid-to-high single-digit rate annually. Bitcoin ETF storming Wall Street, reshaping the cryptocurrency market. Following a surge in demand for Bitcoin and attracting over $7 billion in net inflows in less than two months, Bitcoin spot ETFs are disrupting the original cryptocurrency market. The most notable change is that this year's largest digital asset has surged by over 45%, reaching around $63,000, nearing the pandemic-era record high of $69,000. With Bitcoin's supply growth about to decrease, known as the halving, it has contributed to Bitcoin's rise. ETFs are shifting the focus of Bitcoin trading to the US and encouraging leveraged bets, raising the cost of bullish bets through perpetual futures to 2021 levels. Meltem Demirors, advisor at Coinshares, said, "The supply-demand imbalance here is really severe. Since the beginning of this year, Bitcoin's gains have exceeded those of the stock market, continuing the pattern from 2023.messageBest Buy (BBY.US) reported a 0.6% year-on-year decrease in Q4 revenue, with adjusted earnings per share of $2.72. Best Buy's Q4 revenue for 2023 was $14.65 billion, a 0.6% decrease compared to expectations of $14.55 billion. Adjusted earnings per share were $2.72, higher than the expected $2.61. AI monetization disappointing! Salesforce (CRM.US) exceeded expectations in Q4 performance but revenue guidance fell short. The company also announced a $10 billion increase in share buybacks. Salesforce reported Q4 revenue of $9.29 billion, an 11% year-on-year increase, surpassing market expectations of $9.22 billion. Earnings per share excluding certain items were $2.29, also exceeding expectations of $2.27. Adjusted operating profit margin was 31.4%, in line with market expectations. However, Salesforce's revenue guidance was lower than expected, indicating that its new artificial intelligence (AI) features have not yet stimulated growth. Salesforce expects revenue to be around $38 billion by the end of the 2025 fiscal year, a growth of approximately 9%. Analysts' average estimate is $38.6 billion. PC still struggling, HP (HPQ.US) Q1 revenue below expectations. HP Inc. reported lower-than-expected quarterly revenue due to continued weak sales of personal computers. Q1 revenue was $13.2 billion, a 4.6% year-on-year decrease, falling short of analysts' expectations by $390 million. Earnings per share were $0.81, matching analysts' expectations. Poor performance came from the company's personal computer business, with both consumer and commercial PC revenues falling below expectations. Overall, personal systems revenue fell 4% to $8.8 billion, while printing revenue fell 5% to $4.4 billion, matching expectations. C3.ai (AI.US) reported better-than-expected performance in Q3 and raised its full-year revenue guidance. Q3 revenue grew 18% year-on-year to $78.4 million, surpassing analysts' average expectations of $76.1 million. Subscription revenue grew 23% to $70.4 million, exceeding expectations of $66.6 million; professional services revenue declined 17% to $8 million, below expectations of $9.25 million. Adjusted loss per share in Q3 was $0.13, better than the expected loss of $0.28 per share. Looking ahead, C3.ai expects Q4 revenue to be between $82 million and $86 million for the 2024 fiscal year, with analysts' average estimate at $83.9 million; full-year revenue is expected to be between $306 million and $310 million, previously estimated at $295 million to $320 million, with analysts' average estimate at $306 million. Snowflake (SNOW.US) reported Q1 and full-year product revenue guidance below expectations. While Q4 revenue and earnings per share were better than expected, the guidance for Q1 and full-year product revenue for the 2025 fiscal year fell short of expectations, leading the CEO to resign. Q4 revenue was $775 million, a 32% year-on-year increase, surpassing analysts' expectations of $759 million; Non-GAAP earnings per share were $0.35, exceeding analysts' expectations of $0.18, compared to $0.14 in the same quarter last year. Snowflake expects Q1 product revenue for the 2025 fiscal year to be between $7.45 billion and $7.5 billion, a 26-27% increase year-over-year, below analysts' expectations of $7.59 billion. The company also expects full-year product revenue for the 2025 fiscal year to be $3.25 billion, falling short of analysts' expectations of $3.43 billion. NetEase (NTES.US) expanded and diversified its game product line in 2023, with a net profit of approximately RMB 29.417 billion, a 44.64% year-on-year increase. In the fourth quarter, NetEase's net income was RMB 27.1 billion, a 7.0% year-on-year increase. Gross profit was RMB 16.8 billion, a 27.0% year-on-year increase. Net profit attributable to company shareholders was RMB 6.582 billion, with basic earnings per share of $0.29. Total revenue in 2023 was approximately RMB 103.468 billion, a 7.23% year-on-year increase; gross profit was approximately RMB 63.063 billion, a 19.51% year-on-year increase; net profit attributable to company shareholders was approximately RMB 29.417 billion, a 44.64% year-on-year increase; earnings per share were RMB 9.15 yuan. As of December 31, 2023, the company's net cash balance was RMB 110.9 billion, compared to RMB 95.6 billion as of December 31, 2022. The first batch of education large models passed the national filing, and Youdao (DAO.US) presented impressive financial reports in the fourth quarter, with record profits. Youdao's net income in the fourth quarter reached RMB 1.48 billion, continuing to grow year-on-year; operating profit and operating cash net inflow both reached historic highs. Operating profit realized a profit of RMB 80 million for the quarter, up 209.2% year-on-year, and operating cash flow net inflow was RMB 160 million, up 91.0% year-on-year. In the fourth quarter, under non-US GAAP, net profit attributable to ordinary shareholders of Youdao was RMB 69.3 million, compared to RMB 31.1 million in the same period the previous year. Key financial indicators for 2023 improved year-on-year, with Youdao achieving net income of RMB 5.39 billion, a 7.5% increase; operating losses narrowed by 39.8% year-on-year. Apple (AAPL.US) CEO Cook: Company heavily investing in generative AI. Apple CEO Cook stated on Wednesday that the company is investing a significant amount of funds into the field of artificial intelligence. This is one of the strongest signals yet that the iPhone maker is embracing the wave of generative artificial intelligence sweeping through the tech industry.Cook stated at the annual Apple shareholders meeting that the company believes "generative artificial intelligence has incredible breakthrough potential, which is why we are currently investing heavily in this area." Cook said, "We believe that in productivity, problem-solving, and other aspects, it will bring revolutionary opportunities for our users." So far, Apple has not released any products competing with large models like OpenAI's ChatGPT or Google's Gemini, but Cook revealed that a major announcement will be made later this year.Important economic data and events preview 21:30 Beijing time: US January personal spending rate (%), US January PCE price index annual rate (%), US initial jobless claims for the week ending February 24 (in thousands). 22:00 Beijing time: US January Dallas Fed PCE index (%). 22:45 Beijing time: US February Chicago PMI. 23:00 Beijing time: US January seasonally adjusted pending home sales index rate (%). 23:50 Beijing time: 2024 FOMC voter, Atlanta Fed President Bostic speaks. 00:00 Beijing time the next day: 2025 FOMC voter, Chicago Fed President Evans speaks on monetary policy. 02:15 Beijing time the next day: 2024 FOMC voter, Cleveland Fed President Mester speaks on financial stability and regulation. 02:30 Beijing time the next day: US House of Representatives vote on the interim appropriations bill. 04:30 Beijing time the next day: 2024 FOMC voter, Cleveland Fed President Mester interviewed by Yahoo Finance. 04:30 Beijing time the next day: US President Biden speaks in Brownsville, Texas. Earnings preview Friday morning: Dell (DELL.US), Zscaler (ZS.US) Pre-market on Friday: Plug Power (PLUG.US)