US OPEN: Wall Street opens flat after 'hawkish' NFP report

• Wall Street opens flat after strong NFP data
• US2000 tests 1,945 pts swing area
• Constellation Brands maintains full-year forecasts

Wall Street indices launched today's cash session more or less flat. US index futures dived after NFP report for December turned out to be much stronger than expected, but part of this drop was erased ahead of the session launch. S&P 500, Nasdaq and Dow Jones traded flat at session launch, while small-cap Russell 2000 opened almost 1% lower.

NFP data released today at 1:30 pm GMT was very 'hawkish' - employment gain beat expectations, unemployment rate held unchanged, and wage growth accelerated. Money market are now seeing an around 55% chance of Fed delivering the first rate cut at March meeting, down from over-80% earlier this week.

However, NFP report was not the only piece of top-tier US data scheduled for today - traders will be offered services ISM reading for December at 3:00 pm GMT.

Source: xStation5

Russell 2000 futures (US2000) are pulling back following strong NFP release. US2000 bulls failed to sustain an upside breakout above the upper limit of the trading range, and the index started to pull back at the turn of the year. Index is trading around 6.5% below a local high reached on December 27, 2023. US2000 halted post-NFP drop near the 1,945 pts swing level and recovered part of the losses later on. Nevertheless, bearish momentum is strong, with the index trading lower for the 6th day in a row. A near-term support zone to watch can be found in the 1,920 pts area.

Company News

Constellation Brands (STZ.US) reported earnings for the fiscal-Q3 2024 (calendar September - October 2023) ahead of the US cash session open. Company's comparable net sales increased 1.4% YoY, to $2.47 billion (exp. $2.54 billion). Beer net sales accounted for $1.97 billion (exp. $2.0 billion), while beer operating income came in at $757.3 million (exp. $745.1 million). Wine and spirits net sales reached $502.4 million, while the unit's operating income dropped 5.3% YoY, to $127.6 million (exp. $138.3 million). Comparable EPS came in at $3.19 and was higher than $3.03 expected and $2.87 reported a year ago. Constellation Brands maintained full-year forecasts and still expect full-year comparable EPS to reach $12.00-12.20.

Costco Wholesale (COST.US) announced that its net sales increase 9.9% YoY in December, $26.15 billion, while comparable sales were 8.5% higher. Company said that one additional shopping day in December due to the timing of the New Year boosted sales by around three percent.

Analysts' actions

• Carnival Corp (CCL.US) upgraded to 'overweight' at Wells Fargo. Price target set at $22.00
• Palantir Technologies (PLTR.US) downgraded to 'underperform' at Jefferies. Price target set at $13.00
• Freshworks (FRSH.US) upgraded to 'buy' at Jefferies. Price target set at $30.00
• Canoo (GOEV.US) rated 'outperform' at Wedbush. Price target set at $14.00
• Yum! Brands (YUM.US) upgraded to 'outperform' at Oppenheimer. Price target set at $154.00
• United Rentals (URI.US) downgraded to 'underperform' at BNPP Exane. Price target set at $485.00
• Elanco Animal Health (ELAN.US) upgraded to 'buy' at Stifel. Price target set at $20.00

Shares of Constellation Brands (STZ.US) are breaking above the mid-term resistance zone in the $242.50 area at the launch of today's trading. Stock is trading at the highest level since early-October 2023. Should bulls remain in control and stock continues to move higher, the next resistance zone to watch can be found in the $257.00 area. Source: xStation5