Stock futures rise Wednesday to start a new month of trading: Live updates

JPMorgan downgrades Marqeta shares

It’s time for investors to step away from card issuer Marqeta, according to JPMorgan. 

The firm lowered its rating for Marqeta to neutral from overweight. It also slashed its price target to $6 from $9. The new price target implies only a 3.4% upside from Tuesday’s close price. 

“While we like the strategic value and long-term operational improvements being put in place at Marqeta, we feel it is time to move to the sideline,” analyst Tien-tsin Huang wrote on Wednesday in a client note.

CNBC Pro subscribers can read more about his downgrade here.

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Marqeta stock

Manufacturing still in contraction, prices jump in February ISM reading

Manufacturing remained in contraction during February as production and new orders slowed, the Institute for Supply Management reported Wednesday.

The closely watched ISM Manufacturing Index registered a 47.7% reading, representing the percentage of companies reporting expansion. A reading below 50% represents contraction.

Economists had been looking for a headline reading of 47.8%, according to Dow Jones.

In the details, new orders rose but remained in a pullback at 47%, while the production index edged down to 47.3%. Importantly, inflation re-emerged in the sector, with the prices index jumping 6.8 percentage points to 51.3%. Employment nudged down into contraction territory with a 49.1% reading.

—Jeff Cox

Fed’s Kashkari open to higher rate hike at March meeting

Minneapolis Federal Reserve President Neel Kashkari said Wednesday that he’s open to the possibility of a larger interest rate increase at this month’s policy meeting, but hasn’t made up his mind yet.

“I’m open-minded at this point about whether it’s 25 or 50 basis points,” the central bank official said during an event in his home district.

A voting member on the rate-setting Federal Open Market Committee, Kashkari said the “dot plot” of individual members’ future expectations will be more significant than what’s decided at the March 21-22 meeting.

He noted that his “dot” was higher than most of the other FOMC members at the last meeting, when the committee stepped back the level of previous hikes to a quarter-point move. Kashkari indicated the he again is likely to tilt to the hawkish side in view of recent data that shows inflation remains high despite all the rate increases over the past year.

“At this point I have not decided what my dot is going to look like, but I lean towards continuing to raise further. I would continue to push up my policy path,” he said.

—Jeff Cox

Stocks open lower to begin a new trading month

U.S. equities fell on Wednesday, the first day of March.

The Dow Jones Industrial Average dipped 64 points, or 0.2%. The S&P 500 fell 0.2%, and the Nasdaq Composite hovered under the flatline.

Wall Street analysts remain positive on Rivian after mixed earnings

The outlook for Rivian Automotive remains positive even after the electric vehicle startup reported mixed fourth-quarter earnings, and issued a lackluster production outlook, according to Wall Street analysts.

Rivian shares dropped more than 8% in premarket trading Wednesday after the firm posted a revenue miss in its latest quarter, according to consensus estimates from Refinitiv. It also reported a smaller-than-expected loss.

Meanwhile, Rivian’s 2023 vehicle production guidance of 50,000 vehicles was below the estimates of several Wall Street analysts.

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Rivian shares 1-day

Even so, analysts on Wall Street maintained a buy rating on the stock, according to consensus estimates on Refinitiv. Their average price target of $37.05 suggests Rivian shares can surge more than 90% from Tuesday’s close.

Still, for Goldman Sachs’ Mark Delaney, the results warranted a neutral rating for the stock, saying lower operating expenditures and strong demand offset the slower production figures. He has a 12-month price target of $18 on the stock. Rivian shares closed Tuesday at $19.30.

“While we continue to expect the company to have improved traction long-term, we would look for more visibility on an improved production ramp and timeline to profitability to be more positive on the stock and maintain our Neutral rating,” Delaney wrote to clients on Wednesday.

Meanwhile, Bank of America’s John Murphy maintained a buy rating on the stock, saying Rivian is “still in right place/time with right product/strategy.” He has a $50 price objective, implying shares could soar more than 150% from Tuesday’s close.

“[The] company is one of the most viable among the start-up EV automakers and also a relative competitive threat to incumbent OEMs (and possibly to other automotive-related verticals),” Murphy wrote Wednesday.

— Sarah Min

Futures turn negative as bond yields rise higher

U.S. equity futures fell into the red as bond yields continued to climb higher.

The benchmark 10-year Treasury yield was up by 3 basis points at 3.947%, after it climbed as high as 3.983% on Tuesday, reaching levels last seen in the first half of November.

The yield on the 2-year Treasury was last trading at 4.839% after rising by just over 4 basis points. The 1-year yield climbed more than 3 basis points to over 5%.

— Tanaya Macheel

Stocks making the biggest moves premarket

Here are the companies making headlines before the bell on Wednesday:

Click here to read more companies making moves before the open.

— Pia Singh

Kohl’s sinks after reporting fourth-quarter lossStock Chart IconStock chart icon

Kohl’s fell after reporting fourth-quarter results

Kohl’s reported a loss of $2.49 per share on $5.78 billion of revenue. Analysts surveyed by Refinitiv had expected positive earnings of 98 cents per share on $5.99 billion of revenue. CEO Tom Kingsbury said in a press release that sales were pressured by the “ongoing inflationary environment.”

The company also said it expected sales to decline between 2% and 4% in 2023.

— Jesse Pound

Mortgage demand from homebuyers drops to a 28-year low

Mortgage rates moved higher again last week, pushing buyers back to the sidelines just as the spring housing market is supposed to be heating up.

Mortgage applications to purchase a home dropped 6% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was 44% lower than the same week one year ago, and is now sitting at a 28-year low.

Mortgage rates have moved 50 basis points higher in just the past month. Last February, rates were in the 4% range.

For more, read the full story here.

— Diana Olick, Tanaya Macheel

Morgan Stanley upgrades Sarepta

Morgan Stanley said Sarepta Therapeutics could rally more than 50% on the approval of a key drug.

“On SRPT’s 4Q earnings call, [management] highlighted recent commentary following the mid-cycle review of SRP-9001 suggesting that the FDA is comfortable with the surrogate endpoint and acknowledged no safety-related issues … The risk/benefit skews positive given the manageable safety profile,” Morgan Stanley said.

— Hakyung Kim

March market history

March is typically a strong month for the market, according to The Stock Trader’s Almanac. The Dow Jones Industrial average and S&P 500 gained, on average, 0.9% and 1.1% respectively for the month, making it the fifth-best month for the U.S. stock market.

It’s been quite a volatile month in recent years with the Dow dropping 13.7% in 2020 as Covid emerged and gaining 6.6% in 2021. Last year, the Dow gained 2.3% on the month.

There tends to be late-month weakness that eats away at some of the month’s early gains, according to The Stock Trader’s Almanac, as investors take profits into the end of the first quarter.

— John Melloy

UBS upgrades Procter & Gamble

Procter & Gamble could see big gains ahead, according to UBS.

“P&G has been the worst performing stock across our [home and personal care] coverage universe YTD, which is partially due to the unwind in the group but also concerns around the ability for P&G to deliver outsized EPS  growth/positive  revisions  looking ahead,” UBS said in a note. “We view  concerns  on  the  latter  as misplaced and believe an earnings inflection is on the horizon looking out to FY24.”

— Hakyung Kim

China economic data helping to boost markets

Strong data out of China boosted hopes the country’s economy was returning to growth after loosening up Covid lockdown rules. China’s official manufacturing purchasing managers’ index rose to 52.6 in February, a second-straight month of expansion and the fastest pace since April 2012.

Hong Kong’s Hang Seng index soared more than 4% in response to the data and U.S. futures were boosted overnight.

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Dow Jones futures – 1-day

Rebecca Patterson is looking to defensives, T-bills for near-term market insurance

Rebecca Patterson, known for her earlier leadership at Bridgewater, is preparing for a near-term market downturn.

In order for the Federal Reserve to ease its interest rate-hiking campaign, Patterson said there needs to be a lot more economic weakness and inflation will likely need to be brought down to the Fed’s target level or below—both of those scenarios having “low probabilities.” 

“I do think we’re looking at equity market downside later this year and I would be watching that interplay between the consumer, companies and the labor market, and, of course, the Fed and those borrowing costs,” Patterson, the former Chief Investment Strategist at Bridgewater Associates, said Tuesday on CNBC’s “Fast Money.”

The strategist added that the consumer is growing cautious, which she said could bode poorly for companies–increasing the risk of layoffs and hit on earnings–if they start spending less. 

For near-term insurance, Patterson said she is investing in the six-month U.S. Treasury bill and is starting to invest modestly in defensive stocks. She noted that six-month Treasury yields rose to 5.14% on Tuesday, reaching its highest return rate since 2007.

Patterson published an op-ed on CNBC.com Tuesday about the three drivers she sees as potentially shaping the future of the U.S. economy.

— Pia Singh

How the major indexes performed in February

Tuesday’s closed marked the end of February’s trading month. Here’s how the three major indexes performed in the month:

That marks a turn from January’s rally as investors tried to shake off 2022’s downturn. February’s slide pushed the Dow below where it started the year, while the S&P 500 and Nasdaq Composite are still holding on to some of what each gained in January.

— Alex Harring

Stocks making the biggest moves after hours

These are the stocks making the biggest moves after the bell:

See the full list here.

— Alex Harring

Stock futures open down

The three major futures indexes opened in the red.

Nasdaq 100 futures led the way down, dropping 0.3%. Futures tied to the S&P 500 and Dow slid 0.2% and 0.1%, respectively.

— Alex Harring