5 Things to Know Before The Stock Market Opens

Fed Chairman Jerome Powell reiterated his view that a March rate cut is unlikely, sending Treasury yields higher. Another busy week of earnings kicked off this morning with reports from Caterpillar (CAT) and McDonald’s (MCD), while Palantir Technologies (PLTR) will release its results after the market close. Boeing stock was down this morning after a fresh setback with its Max 737. Here’s what investors need to know today.

1. Fed Chair’s Comments Send Treasury Yields Higher

U.S. Treasury yields—already up after January’s blowout jobs numbers news—moved higher early Monday after Federal Reserve Chairman Jerome Powell reiterated his view that the Fed’s policy setting committee won’t be ready to cut rates at its next meeting in March. In an interview with CBC’s 60 Minutes that aired Sunday evening, Powell said the Fed would need to see inflation “moving sustainably down to 2%” before cutting rates, adding it is unlikely to “reach that level of confidence” by the March meeting. The “danger of moving too soon is that the job’s not quite done,” he said. Last week, the Fed held its key fed funds rate steady at a 22-year high of a 5.25%-5.50% range.

2. McDonald’s Q4 Revenue Misses Expectations 

McDonald’s (MCD) posted lower-than-forecast fourth-quarter revenue of $6.41 billion, though its bottom line beat expectations. The company said its international developmental licensed markets segment was negatively affected by the impact of war in the Middle East. McDonald’s CEO Chris Kempczinski said the company “remain(s) confident in the resilience of our business amid macro challenges that will persist in 2024.” McDonald’s shares were little changed in pre-market trading.

3. Caterpillar Shares Surge After Earnings Beat

Caterpillar (CAT) shares were more than 4% higher in early trading, at record levels, after the construction-equipment maker posted fourth-quarter net income that beat forecasts. The company reported adjusted net income of $5.23 a share from $3.86 the previous year and operating profit margin of 18.4% for the fourth quarter compared with 10.1% a year earlier.  Caterpillar also gave guidance, saying its 2024 full-year sales and revenue should be broadly similar to 2023’s.

4. Boeing Down After Finding More 737 Max Problems

Boeing (BA) shares were off 2.1% in pre-market trading after the company reportedly found mis-drilled holes on some fuselages on its 737 Max jets, the latest production setback for the aircraft maker after last month’s mid-air accident in which a door blew off the aircraft. Spirit AeroSystems (SPR), which has been at the center of quality issues affecting 737s, supplied the fuselages. Boeing’s commercial chief Stan Deal said in a memo to staff on Sunday that the issue could delay some deliveries in the near term and that existing 737s can keep flying.

5. Palantir Rises Before Q4 Results With AI in Focus

Shares of Palantir Technologies (PLTR) were moving higher in pre-market trading ahead of reporting results after the closing bell Monday. Palantir is among the slew of tech firms whose AI ambitions are in constant focus. The company, which counts the U.S. army as one of its main customers, has guided toward fourth-quarter revenue of between $599 million and $603 million, with adjusted income from operations of between $184 million and $188 million.

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