US Stock Market Outlook: Futures of the three major stock indexes are all up. JPMorgan Chase predicts a 50% chance of a soft landing for the US economy.

• Source: Zhitong App

1. Before the U.S. stock market opened on Tuesday, February 27th, the futures of the three major U.S. stock indexes all rose. As of the time of writing, the Dow Jones futures were up by 0.05%, the S&P 500 index futures were up by 0.11%, and the Nasdaq futures were up by 0.21%.

2. At the time of writing, the German DAX index rose by 0.45%, the UK's FTSE 100 index fell by 0.03%, the French CAC 40 index fell by 0.02%, and the Euro Stoxx 50 index rose by 0.25%.

3. As of the time of writing, WTI crude oil fell by 0.26% to $77.38 per barrel. Brent crude oil fell by 0.29% to $81.43 per barrel.

Market News

Morgan Stanley CEO: Commercial real estate crisis unlikely, 50% chance of U.S. economy experiencing a soft landing. Jamie Dimon, CEO of JPMorgan Chase, recently stated in an interview that if there is an economic recession, issues in commercial real estate will only worsen, but many owners can handle the current pressures. He mentioned, "If we don't fall into an economic recession, I think most people will be able to weather the storm, refinance, and put more money in." Dimon pointed out that not all subsectors of commercial real estate are at risk, such as warehouses and data centers. "But if you only have office buildings, the value of these assets will decrease due to interest rates. When interest rates rise by 300 basis points, any cash flow you hold will shrink by 30%. This is not a crisis. This is well-known." Regarding the increasing defaults, Dimon believes, "This is just a normalization process."

Legendary investor warns: FOMO frenzy may peak, bleak U.S. stock returns in the next 12 years. Legendary investor John Hussman stated that with the FOMO (fear of missing out) sentiment driving the rise in U.S. stocks, it seems that the market is nearing its peak, and stock returns in the next decade may be bleak. The President of Hussman Investment Trust mentioned that in the past four months, U.S. stocks have surged significantly, with the S&P 500 index hitting a historical high in 2024. Hussman stated in a report on Sunday that this surge is mainly due to Wall Street's "almost crazy 'fear of missing out'," which in the long run could spell trouble for the stock market. Hussman said, "Many pressures are exacerbating this fear: the recent nominal highs in the stock market, enthusiasm for an 'economic soft landing,' expectations of the Fed 'turning' to rate cuts, and recent optimism about the prospects of artificial intelligence." After the U.S. interest rate hike, the aftermath is showing, and even the economic prosperity cannot resist the pessimism of American consumers. In recent weeks, most economic data in the United States has been relatively positive. Despite the unexpectedly strong U.S. economy, American consumer confidence appears relatively pessimistic. The University of Michigan Consumer Confidence Index released on the 16th showed a slight increase from 79 in January to 79.6 in February, below the median expectation of 80 by economists. Although consumer confidence is on the rise, the index remains below pre-pandemic levels, 6% lower than the long-term average. This contrast has puzzled many economists. Zhitong App learned that a paper published by the International Monetary Fund (IMF) and researchers from Harvard University, including former Treasury Secretary Lawrence Summers, pointed out that the rise in borrowing costs may unlock this mystery.

Yellen: The global economy still has resilience, and the U.S. is its key growth driver. U.S. Treasury Secretary Yellen will hold a press conference in Sao Paulo, Brazil, before the G20 finance ministers meeting on Tuesday, stating that strong U.S. economic growth is the "key driver" for global economic growth better than expected. In excerpts from the U.S. Treasury's speech, Yellen stated that the IMF and other forecasting agencies had predicted a comprehensive slowdown in global economy by 2023, but this has not been the case. Instead, global economic growth reached 3.1%, exceeding expectations, and inflation has also declined. It is expected that prices in about 80% of economies will continue to fall this year. She said, "Looking ahead, we still recognize the risks facing the global outlook and continue to carefully monitor economic challenges in certain countries, but the global economy still has resilience."

Kansas Fed President: The Fed does not need to preemptively cut interest rates. Kansas Fed President Jeffrey Schmid hinted in his first policy speech on Monday that he is still concerned about the threat of high inflation and is not eager to cut interest rates. In his first public speech since taking office in August last year, Jeffrey Schmid stated, "Given that inflation is above target, the labor market is tight, and demand shows quite strong momentum, my personal view is that there is no need to preemptively adjust the policy stance. Instead, I believe the best approach is to remain patient, continue to observe the economy's response to the policy tightening that has already occurred, and wait for convincing evidence that the fight against inflation has been successful." Jeffrey Schmid's remarks indicate that his hawkish views are consistent with those of recent Kansas Fed presidents. His comments are also in line with signals from other Fed policymakers in recent weeks.

Crazy Money Inflow! New spot ETF sets a new record for daily trading volume, and Bitcoin rises above $57,000. On Monday, the price of Bitcoin almost reached $55,000. On Tuesday, Bitcoin broke through the $55,000 mark and continued to rise, surpassing $57,000 per coin at the time of writing. Nine new spot Bitcoin ETFs set a new record for total daily trading volume on Monday, with trading activities reaching $2.4 billion. Additionally, according to CoinShares data, asset management companies such as Ark Invest, Bitwise, BlackRock, Fidelity, Grayscale, ProShares, and 21Shares have seen continuous inflows of funds into their cryptocurrency investment products for the fourth consecutive week. Last week, the global market saw an increase of $598 million. According to Eric Balchunas, a senior ETF analyst at Bloomberg, 9 new physical Bitcoin ETFs set a new record for daily total trading volume on Monday, reaching $2.4 billion in buying and selling activities.

Stock News

Yuchai International (CYD.US) reported an 18.9% year-on-year increase in H2 revenue, with engine sales up by 5.2%. Yuchai International's H2 revenue was 8.9 billion yuan, compared to 7.5 billion yuan in the same period last year, representing an 18.9% year-on-year growth. Net profit attributable to the company's shareholders was 107.1 million yuan, down from 124.9 million yuan in the same period last year. Basic and diluted earnings per share were 2.62 yuan, down from 3.06 yuan in the same period last year. H2 total engine sales reached 147,700 units, a 5.2% increase from the 140,345 units sold in the same period last year.

Macy's (M.US) reported an adjusted earnings per share of $2.45 for Q4 2023, exceeding expectations of $1.99. Net profit was $685 million, surpassing the expected $553 million. Revenue was $8.12 billion, slightly higher than the expected $8.11 billion. Looking ahead, Macy's forecasts revenue for the 2024 fiscal year to be between $22 billion and $22.9 billion.

Lowe's (LOW.US) exceeded market expectations with adjusted earnings per share. The company reported a net profit of $1 billion for the fourth quarter, equivalent to $1.77 per share, up from $957 million and $1.58 per share in the same period last year. Lowe's adjusted earnings per share were $2.28, higher than the market analyst's model of $1.68. Revenue decreased from $22.4 billion to $18.6 billion. The company expects revenue for 2024 to be between $84 billion and $85 billion, lower than the estimated $85.61 billion, with earnings per share between $12.00 and $12.30, compared to the expected $12.95.

Zoom (ZM.US) exceeded expectations in Q4 performance, with a low customer churn rate. Zoom Video Communications reported fourth-quarter revenue of $1.15 billion, a 2.6% year-on-year increase, surpassing the market's expected $1.13 billion. Earnings per share, excluding certain items, were $1.42, higher than the market's expected $1.15. The company also announced a $1.5 billion share repurchase, following the expiration of the $1 billion authorization initiated in 2022 earlier this month. Zoom stated in its financial report that the number of contact center licenses doubled compared to the previous year, with 95 phone customers having over 10,000 active users. Approximately 500,000 accounts have activated Zoom's AI-powered free companion. Enterprise revenue grew by 4.9% to $667.3 million. As of the end of the quarter, the company had 220,400 enterprise customers, with 3,810 customers contributing over $100,000 in revenue in the past 12 months.

Agora (API.US) parent company reported revenue of $36.04 million in Q4 2023, achieving profitability for the first time in 3 years. Agora, Inc., the parent company of Agora, Inc., released its financial report for the fourth quarter and full year of 2023. The report showed that Agora, Inc. achieved revenue of $36.04 million in the fourth quarter, a 3% increase from the previous quarter, with total annual revenue reaching $142 million. In the fourth quarter, the adjusted net profit was $1.4 million, achieving quarterly profitability for the first time in three years.

GOTU.US's Q4 financial report exceeded expectations, with quarterly operating net cash flow reaching $492 million. In the fourth quarter of 2023, GOTU achieved revenue of $761 million, a year-on-year increase of 20.9%; cash revenue reached $1.278 billion, a year-on-year increase of 28.1%; operating net cash flow reached $492 million. In the 2023 fiscal year, GOTU's cash revenue reached $3.339 billion, a significant year-on-year increase of 31.7%; the annual operating net cash flow increased significantly year-on-year, about 5.5 times higher than the previous year, providing strong evidence of the continuous improvement in operational efficiency. While achieving growth and positive cash flow, the company achieved annual profitability, with a non-GAAP net profit of $51.06 million. As for cash reserves, as of December 31, 2023, the company's cash reserves exceeded $4 billion, providing sufficient support for continuous business development. Additionally, the company continued to repurchase stocks, with approximately 4.87 million American depositary shares repurchased as of December 31, 2023.

Amazing! MicroStrategy's (MSTR.US) co-founder further increased holdings by over 3,000 bitcoins, with the latest holdings nearing $10 billion. The enterprise software company MicroStrategy's investment in Bitcoin as part of its corporate strategy continued this month, with the company purchasing over 3,000 bitcoins for $155.4 million. Based on current market prices, this increased the value of the company's Bitcoin holdings to approximately $9.88 billion. According to a filing submitted to the U.S. Securities and Exchange Commission (SEC) on Monday, the company's most recent purchase was made in cash between February 15 and February 25. This brought the company's total Bitcoin holdings to around 193,000 coins. The filing indicated that Saylor's most recent purchase had an average price of $51,813, while the average price for the total holdings was $31,544. On Monday, the price of Bitcoin remained relatively stable at around $51,379.

Facing obstacles in listing in the U.S., Shein is reportedly considering a listing in London. Amid challenges in listing in the U.S., Shein is reportedly considering a listing in London, with Singapore or Hong Kong also being considered. Despite the company's belief that the U.S. Securities and Exchange Commission is unlikely to approve its IPO application, Shein is still striving for U.S. listing approval, although the company is more inclined to list in the U.S. market.

Important Economic Data and Events Preview

21:30 Beijing time: U.S. January Durable Goods Orders MoM (%).

22:00 Beijing time: U.S. December FHFA House Price Index MoM (%), U.S. December S&P/CS 20-City Composite Home Price Index YoY (%).

23:00 Beijing time: U.S. February Conference Board Consumer Confidence Index, U.S. February Richmond Fed Manufacturing Index.

Next day at 05:30 Beijing time: U.S. API Crude Oil Stock Change for the week ending February 23 (thousand barrels). At 22:05 Beijing time, Federal Reserve Board member Bart spoke on counterparty credit risk.

To be confirmed, U.S. Trade Representative Dai Qi will visit Abu Dhabi, United Arab Emirates from Monday to Friday (February 26th to March 1st).

Performance Forecast

Wednesday morning: eBay (EBAY.US), Beyond Meat (BYND.US)

Wednesday pre-market: Baidu (BIDU.US), iQIYI (IQ.US), Vipshop (VIPS.US), Hutchmed (HCM.US), Daqo New Energy (DQ.US)