Stocks Mixed On Inflation Worries, Tesla, Salesforce, Best Buy, Costco In Focus - Five Things To Know

Stock futures mixed, Treasury yields jump on renewed inflation worries; Tesla slumps as Elon Musk underwhelms at investor day event; Salesforce surges as Q4 earnings, outlook keep activists at bay; Best Buy earnings on deck as consumer spending trends soften and Costco sales strength in focus ahead of Q2 earnings update.

Five things you need to know before the market opens on Thursday March 2:

1. -- Stock Futures Mixed, Treasury Yields Jump On Renewed Inflation Worries

U.S. equity futures traded mixed Thursday, while Treasury bond yields printed fresh multi-year highs and the dollar extended gains against its global peers, as investors continue to track inflation developments in markets around the world while noting weakening growth trends in the domestic economy. 

Benchmark 10-year note yields, which topped 4% for the first time since November during yesterday's session, added a further 4 basis points in overnight trading as traders looked to faster-than-expected inflation data from Europe, where harmonized consumer prices rose by 8.5% last month, and further indications of elevated price pressures in the U.S. economy, where the so-called 'prices paid' index of the closely-watched ISM manufacturing activity survey jumped six points last month, even as the overall reading indicated a fifth consecutive month of contraction.

With 2-year yields testing fresh October 2008 highs of 4.908% in overnight trading, bonds are likely to act as a significant headwind for stocks over the coming weeks as investors look to the Federal Reserve's March policy meeting, where bets on a 50 basis point rate hike has jumped to around 31%, according to the CME Group's FedWatch.

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.31% higher at 104.811, with gains capped by a stronger Euro and bets on bigger near-term rate hikes from the European Central Bank over the coming months.

Atlanta Fed President Raphael Bostic also said Wednesday that finding a benchmark interest rate that straddles the "delicate balance" of taming inflation while preventing the economy from tipping into recession likely means a terminal rate that rises past 5% and remains there "well into 2024".

"History teaches that if we ease up on inflation before it is thoroughly subdued, it can flare anew ... We must determine when inflation is irrevocably moving lower. We're not there yet."

Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500 were indicating a 14 point opening bell decline ahead of weekly jobless claims data at fourth quarter unit labor cost data at 8:30 am Eastern time.

Futures linked to the Dow Jones Industrial Average were indicating a 62 point advance, thanks in part to the surge in Salesforce shares, while the rate-sensitive Nasdaq is looking at a 60 point pullback.

In overseas markets, Europe's Stoxx 600 fell 0.36% lower in Frankfurt to the lowest levels since early February, while Britain's FTSE 100 was marked 0.35% lower in London.

Overnight in Asia, the region-wide MSCI ex-Japan index retreated 0.33% into the close of trading following the impressive China PMI data while the Nikkei 225 ended 0.064% lower in Tokyo.

2. -- Tesla Slumps As Elon Musk Underwhelms At Investor Day Event

Tesla  (TSLA) - Get Free Report shares slumped lower in pre-market trading following an investor day presentation from CEO Elon Musk that failed to provide details on a new, lower-priced EV or the timing of production from a newly-agreed facility in Mexico.

In a four-hour presentation at the group's gigafactory in Austin, Musk and a host of senior Tesla executives held court on a wide-range of topics from global energy sustainability to the future of AI regulation, but delved only briefly on topics related to EV production, cost cuts and delivery ambitions.

CFO Zach Kirkhorn, however, vowed that Tesla would halve EV production costs over the coming years as it aims to significantly ramp-up capital spending in order to meets its stated goal of production 20 million cars per year by 2030.

Musk once again hit on the topic of Tesla's purchase price, declaring that "the desire for people to own a Tesla is extremely high ... the limiting factor is their ability to pay for a Tesla", but did not, as expected unveil plans for a lower-cost model. 

Tesla shares were marked 5.3% lower in pre-market trading to indicate an opening bell price of $191.56 each. 

3. -- Salesforce Surges As Q4 Earnings, Outlook Keep Activists At Bay

Salesforce CRM shares surged higher in pre-market trading after the enterprise software group, a target of no fewer than five activist investors, posted better-than-expected fourth quarter earnings and a solid near-term outlook.

Salesforce said profits for the three months ending in December were pegged at $1.68 per share, well ahead of Street forecasts, as revenue rose 14.3.% to $8.38 billion. The group also doubled its share buyback program to $20 billion.

CEO Marc Benioff, who has faced pressure on cash flow, profits and cost-cuts from a host of activists including Dan Loeb's Third Point Hedge fund, Elliott Management, ValueAct Capital, Starboard Value, said full-year earnings should rise to between $7.12 per share and $7.14 per share, significantly higher than the Refinitv forecast of $5.84, while noting that AI technology will be into its biggest software and cloud offerings over the coming months.

Salesforce shares, a Dow component, were marked 15.15% higher in pre-market trading to indicate an opening bell price of $192.70 each.

4. -- Best Buy Earnings On Deck As Consumer Spending Trends Soften

Best Buy Co.  (BBY) - Get Free Report shares edged higher in pre-market trading ahead of the electronics retailer's holiday quarter earnings prior to the opening bell. 

Analysts expect Best Buy to post non-GAAP earnings of around $2.11 per share, down around 22.7% from last year, on revenues of $14.72 billion for the three months ending in January.

Late last year, Best Buy stronger-than-expected Black Friday and Cyber Monday sales allowed it to lift its same-store sales forecast, which is sees falling 10% from last year's levels, while hinting at the impact of supply-chain disruptions that delayed the delivery of higher-end Apple  (AAPL) - Get Free Report iPhones over the holiday period.  

Heavier Christmas discounts, however, are likely to trim the group's profit margins as it works through excess inventory and a pullback in consumer demand.

Best Buy shares were marked 0.8% higher in pre-market trading to indicate an opening bell price of $83.20 each.

5. -- Costco Sales Strength In Focus Ahead of Q2 Earnings Update

Costco Wholesale  (COST) - Get Free Report shares nudged higher in pre-market trading ahead of the discount retailers closely-tracked second quarter earnings expected after the closing bell.

Costco, which unveiled a new $4 billion share buyback last month after updated on holiday-period sales that were far stronger than forecast, is expected to post a bottom line of $3.21 per share on revenues of $55.55 billion for the three months ending in January. 

Last month, Costco said sales for the five weeks ending on January 5 were up 7% from last year to $23.8 billion, well ahead of the 5.3% pace recorded over the retail month of November and firmly ahead of Street forecasts of a 3.5% gain.

Comparable U.S. sales were up 3.6%, the biggest gain since June, while a pullback in gas prices kept average ticket size gains in check, rising only 1% from last year compared to the 7% to 8% growth rates recorded over the summer and early autumn months.

Costco shares were marked 0.05% higher in pre-market trading to indicate an opening bell price of $478.90 each.