The news shaping the markets today

The US director of national intelligence, Avril Haines, said Russia is unlikely to gain control of significantly more territory in Ukraine this year. The safe-haven US dollar index fell this morning.

Japan’s economy expanded by 0.1% on an annualised basis in the fourth quarter, following a 1.1% contraction in the prior period. The news lent support to the JPY/USD forex pair.

China’s producer prices fell 1.4% year-over-year in February, after a 0.8% decline in the prior month, which sent the CNY/USD pair lower in forex trading this morning.

Australia’s building permits fell 27.6% to 12,065 units in January. The figure came in-line with expectations and lent support to the AUD/USD forex pair.

The Philippines said its manufacturing production rose 15.4% year-over-year in January, accelerating from 9.5% growth a month ago, which sent the PHP/USD pair higher in forex trading this morning.

What’s happening: Shares of CrowdStrike Holdings gained on Wednesday, after the company released results for its fourth quarter.

What happened: CrowdStrike posted upbeat quarterly results and issued a strong forecast amid continued demand for cybersecurity services.

Several analysts lifted their price targets for the company following the earnings report.

How were the results: The Austin, Texas-based company reported solid growth in sales for the quarter ended January 31, with the top-line figure topping market expectations.

• Revenues climbed 48% year-over-year to $637.4 million, beating the consensus estimates of $624.92 million.
• Earnings surged 57% to 47 cents per share, exceeding Wall Street expectations of 43 cents per share.

Why it matters: Companies have reduced their tech budgets due to rising interest rates and soaring inflation. However, an increase in digitalisation has resulted in continued demand for cybersecurity products.

CrowdStrike’s main rival Palo Alto Networks had also posted upbeat earnings for the quarter and boosted its profit outlook.

CrowdStrike’s annual recurring revenue (ARR), one of the key metrics for its performance, surged 48% to $2.56 billion in the fourth quarter. Subscription gross margins came in at 75%, while free cash flows grew to an all-time high of $209.5 million.

“CrowdStrike delivered a record fourth quarter that exceeded our expectations across the board. Highlights of the quarter included record net new ARR of $222 million, record net new subscription customers of 1,873, record operating and free cash flow and a rule of 81 on a free cash flow basis,” CEO George Kurtz said during the earnings call.

Management guided to revenue of $674.9-$678.2 million for the first quarter, much higher than market estimates of $664.69 million. Adjusted earnings was guided to 50-51 cents per share, versus market expectations of 43 cents per share. For the full year, the company projected revenues of $2.955-$3.015 billion and adjusted earnings of $2.21-$2.39 per share.

Multiple analysts, including BMO Capital, Citigroup, Barclays, UBS, RBC Capital Markets, BTIG, Stifel, JPMorgan and Wedbush, raised their price targets for the stock following CrowdStrike’s strong quarterly results.

How shares responded: CrowdStrike’s shares gained 3.2% to close at $128.92 on Wednesday, following the release of quarterly results. The stock had added around 25% year-to-date.

What to watch: Investors will keep an eye on interest rate hikes by the US Federal Reserve and inflation in the country.

The markets today

European stocks will be in focus today after closing slightly higher on Wednesday

Context: Markets in Europe edged higher as investors digested comments from US Federal Reserve Chairman Jerome Powell.

Details: During his testimony before the Senate Banking, Housing and Urban Affairs Committee, Powell said that the central bank’s terminal rate could be higher than earlier expected, as latest data showed strength in the US economy. Powell had earlier said inflation levels are cooling off but remained very high.

Investors also assessed economic data released Wednesday, which showed the Eurozone economy stalling in the last quarter of 2022, versus the preliminary estimate of 0.1% expansion. The number of employed persons in the Eurozone rose 0.3% quarter-on-quarter, down from the earlier reported 0.4% growth.

The STOXX Europe 600 Index gained 0.08% to close at 460.99 on Wednesday, with banking stocks adding around 1.2% and healthcare stocks being among the worst performers.

London’s FTSE 100 rose 0.13% to 7,929.92, while Germany’s DAX 40 added 0.46% to settle at 15,631.87. France’s CAC 40 bucked the overall trend and declined by 0.20% to close at 7,324.76, recording losses for the second straight session.

What are expectations: With no major economic data due to be released from the Eurozone today, investors will focus on US economic reports.

Other Markets: US trading indices closed mixed on Wednesday, with the S&P 500 and Nasdaq 100 up by 0.14% and 0.52%, respectively, and the Dow Jones index down by 0.18%.

Support & resistances for today

Market snapshot

What else to watch today

Japan’s machine tool orders, Saudi Arabia’s industrial production and GDP growth rate, France’s payroll employment, South Africa’s current account, Turkey’s gross foreign exchange reserves, Mexico’s inflation rate, US Challenger job cuts, initial jobless claims, continuing jobless claims and natural gas stocks change, Russia’s foreign exchange reserves and corporate profits, as well as Brazil’s net payrolls.

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