The news shaping the markets today

US Secretary of State Antony Blinken and Russia’s Sergei Lavrov met for the first time since the Russia-Ukraine conflict to discuss an end to the war. The safe-haven US dollar index fell this morning.

China’s Caixin general services PMI rose to 55.0 in February, from 52.9 a month ago. This being the second straight month of expansion lent support to the CNY/USD forex pair.

Japan’s au Jibun Bank services PMI was revised higher to 54.0 in February, versus a preliminary reading of 53.6, which sent the JPY/USD pair higher in forex trading this morning.

Australia’s Judo Bank composite PMI climbed to 50.6 in February, from 48.5 in the previous month, lending support to the AUD/USD forex pair.

Ireland’s AIB services PMI rose to 58.2 in February, from 54.1 a month ago, sending the EUR/USD pair higher in forex trading this morning.

What’s happening: Shares of Macy’s surged on Thursday, after the company released results for its fourth quarter.

What happened: The department store operator topped expectations for the holiday quarter, sending the company’s stock sharply higher on Thursday.

However, Macy’s reported a decline in one of its key metrics for the quarter.

How were the results: The New York-based company reported a single-digit decline in sales for the fourth quarter, but the figure still topped market estimates.

• Revenues fell 4.6% to $8.26 billion but came in higher than the consensus estimates of $8.23 billion.
• Earnings contracted by 23% to $1.88 per share but exceeded Wall Street expectations of $1.58 per share.

Why it matters: Several retailers offered massive discounts during the key holiday season to clear their excess inventories and attract price-sensitive consumers who were concerned about inflation.

Although Macy’s inventory fell 4% year-over-year, the discounts impacted operating margins, which shrank to 8.2%, from 11.7% in the previous year. Operating income contracted 33.4% to $676 million.

Comparable sales at Macy’s-owned stores declined by 3.3% year-over-year, while comparable sales at owned-plus-licensed stores fell 2.7%. However, both parameters were higher by more than 3% versus the pre-pandemic levels.

“We were competitive but measured in our promotions, took strategic markdowns and intentionally did not chase unprofitable sales,” CEO Jeff Gennette said during the earnings call.

Management guided to adjusted earnings of $3.67-$4.11 per share on sales of $23.7-$24.2 billion for fiscal 2023, broadly in-line with analyst estimates of earnings of $3.78 per share on sales of $24.2 billion.

How shares responded: Macy’s shares jumped 11.1% to close at $22.70 on Thursday, following the release of quarterly results. The stock has lost around 7% over the past month.

What to watch: Investors will continue monitoring higher borrowing costs and inflation levels around the world, which could impact the company’s overall results this year. Markets will also keep an eye on Macy’s plans to refresh its private brands and open off-mall outlets.

The markets today

UK stocks will be in focus today ahead of a basket of economic reports

Context: FTSE 100 closed higher on Thursday, with weakness in the British pound providing support to the export-heavy index.

Details: The FTSE 100 index recorded its strongest February performance since 2019, following upbeat earnings results and a rebound in commodity prices driven by prospects of a surge in demand from China.

The GBP/USD forex pair declined on Thursday amid expectations of the US Federal Reserve continuing its hawkish monetary policy stance, given the country’s hotter-than-expected labour market report.

On the other hand, Bank of England Governor Andrew Bailey signalled a possible end to interest rate hikes. The GBP/USD forex pair fell around 0.6% to 1.1947 on Thursday.

The blue-chip FTSE 100 rose 0.37% to close at 7,944.04 on Thursday, recording gains for the second straight session. Energy and materials shares rose the most during the session. However, the domestically focused FTSE 250 slipped around 0.1% to settle at 19,851.65.

What are expectations: Traders await economic data on services PMI and composite PMI from the UK today. The S&P Global/CIPS services PMI is expected to increase to 53.3 in February, from 48.7 in the previous month, while the composite PMI is projected to rise to 53.0 in February, from 48.5 in January.

Other Markets: US trading indices closed higher on Thursday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 1.05%, 0.76% and 0.89%, respectively.

Support & resistances for today

Market snapshot

What else to watch today

Russia’s total vehicle sales, services PMI and composite PMI, Germany’s balance of trade, new passenger car registrations, services PMI and composite PMI, Turkey’s inflation rate and producer prices, South Africa’s S&P Global PMI, France’s industrial production, new passenger car registrations, services PMI and composite PMI, Spain’s tourist arrivals, services PMI and composite PMI, Italy’s gross domestic product, services PMI and composite PMI, Eurozone’s producer prices, services PMI and composite PMI, India’s foreign exchange reserves, Brazil’s producer price inflation, net payrolls, services PMI and composite PMI, Canada’s value of building permits and labour productivity, US services PMI, composite PMI, ISM services PMI and Baker Hughes crude oil rigs, as well as Mexico’s government budget value.

ADS Securities London Limited “ADSS” is an execution-only service provider. This material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or investment objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by ADSS that any particular investment, security, transaction or investment strategy is suitable for any specific person. To the extent that any content in this material is construed as investment research, you must note and accept that the content was not prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.  This material may contain links to third party websites, and any content, or use of your personal data by any third party websites is not the responsibility of ADSS or any member of the ADSS Group.