Futures dip with PCE on deck

Futures are aiming lower ahead of a crucial inflation read.

Good Morning! 

It's Chris from Elite Trade Club, here to give you this morning's premarket trading news.

Let’s get ready to trade!

Markets 📈

Stocks continued to face stiff resistance as they hover just below their recent record-high. Small-caps and the Nasdaq underperformed.

  • Dow [<0.1%]

  • S&P 500 [-0.1%]

  • Nasdaq [-0.5%]

  • Russell 2K [-0.7%]

Futures are down again in early trading. S&P 500 contracts are currently showing a 0.3% loss.

What to Watch Today:
New inflation data in the form of January’s PCE Index will drop this morning. PCE is widely regarded as the Federal Reserve’s preferred inflation gauge, so investors will be watching this one closely, especially after the disappointing January CPI report earlier this month.

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Premarket Highlights 🔎

📈 Fed's Inflation Watch Heats Up in January

January's chill didn't extend to inflation numbers, according to the Federal Reserve's go-to gauge. After a few months of cooling off, price pressures decided to make a comeback.

The economic forecasters hanging out at The Wall Street Journal anticipate the personal consumption expenditures (PCE) price index to have risen by 0.3% from December to January.

Even more eye-catching is the core index, which politely ignores the rollercoaster ride of food and energy prices, expected to have climbed 0.4%.

😬 Out of the Comfort Zone
These upticks might have the Fed reaching for its financial antacid. With a target inflation rate of 2% annually, translating to modest monthly increases of around 0.165%, January's numbers are a tad too spicy for their taste.

Recall the days of 2022 when the PCE index soared beyond 7% over the year? While the trend has been more of a gentle descent, with a 2.6% increase through December, the recent consumer-price index for January decided to flex, coming in stronger than anticipated.

⚖️ Fed's Balancing Act

The Fed's policymakers, armed with their economic compasses, are on a mission to navigate back to their 2% inflation safe harbor.

But with January's figures testing the waters, interest rate adjustments remain on hold. The message is clear: more progress is needed before they consider easing up on the rates.

This ongoing inflation saga continues to keep the Fed, and everyone else, on their toes.

Featured Earnings 💰️ 

  • CRH [CRH] ... AM

  • Best Buy [BBY] ... AM

  • Hormel Foods [HRL] ... AM

  • Celsius Holdings [CELH] ... AM

  • Autodesk [ADSK] ... PM

  • Veeva Systems [VEEV] ... PM

  • Zscaler [ZS] ... PM

  • Hewlett Packard Enterprise [HPE] ... PM

  • The Cooper Companies [COO] ... PM

  • NetApp [NTAP] ... PM

Economy 🏗

  • Initial jobless claims [Feb] ... 8:30a

  • Personal income & spending [Jan] ... 8:30a

  • PCE index ... 8:30a

  • Chicago Business Barometer (PMI) [Feb] ... 9:45a

  • Pending home sales [Jan] ... 10:00a

Running Hot 🔥

  • Enveric Bio [ENVB] >> +167.5%

  • Agrify [AGFY] >> +36.8%

  • Sterling Check [STER] >> +26.0%

  • Critical Material [CRML] >> (40.4%)

  • Chemours [CC] >> (36.0%)

  • Ironwood [IRWD] >> (28.0%)

Okta [OKTA] - Last Close: $87.30

Cybersecurity giant Okta is crushing the premarket after it published a blowout earnings report in Wednesday’s aftermarket.

The company reported EPS and revenues that topped Wall Street’s consensus, and its sales grew at an 18.63% clip compared to a year earlier.

Okta also posted Q1 and full-year earnings & revenue guidance that exceed analysts’ expectations by a significant margin.

OKTA is a top mover with a 22.3% gain on upwards of 300K shares traded.

My Take: OKTA has been stuck in a narrow trading range since the start of the year, but it’s on pace to set a new 52-week high thanks to the Q4 earnings boost.

J-Long Group [JL] - Last Close: $12.80

This Hong Kong based fabric firm’s announcement of a $6 million special cash dividend is rallying its shares in the premarket.

Based on J-Long’s outstanding share count of 31.4 million, the dividend should pay about $5.23 per share.

JL is up 82.8% on more than 750K shares traded.

My Take: This dividend will give JL a boost for a little bit, but it will probably see a sudden drop once its paid out.

Societal CDMO [SCTL] - Last Close: $0.46

This tiny manufacturing firm has agreed to be acquired by CoreRX via a cash tender offer worth $1.10 per share.

If the tender offer succeeds in acquiring the required shares, the merger is expected to close sometime in Q2 2024.

The deal pays a 139% premium compared to SCTL’s Wednesday close.

SCTL is up 132.6% on the news, with nearly 1.5 million shares traded.

My Take: The tender offer is almost entirely priced into the share price of SCTL at this point, so I don’t see a lot of upside here.

Volcon [VLCN] - Last Close: $1.21

Volcon’s recently-appointed CEO just published a letter to investors addressing several key issues at the company, sending shares higher.

CEO John Kim cited several promising developments at the company, including delivery of its first production vehicle to the U.S. Army Corps of Engineers, where it’ll be evaluated for military & humanitarian purposes.

He also said Volcon has begun its “dealer roadshow” for the Stag, and its Grunt EVO motorcycles are in full production.

VLCN is up 50.4% on nearly 20 million shares traded after the CEO’s update.

My Take: It sounds like Kim could be overseeing a turnaround at VLCN. There’s a ton of volume behind this trade, so it could be worth watching as a long-shot EV play.

That's it for today! Thanks for reading, and good luck out there!

Best Regards,

— Chris D.
Elite Trade Club

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