5 Things to Know Before The Stock Market Opens

Investors will be weighing the latest measure of wholesale prices due today for signs of inflation’s trajectory, with the producer price index for January expected to reverse recent declines. Shares of cryptocurrency exchange Coinbase (COIN) and Applied Materials Inc. (AMAT), a producer of chip-making machinery, rallied after their quarterly earnings surpassed expectations. China’s BYD Auto Co. (BYDDF), a large maker of electric vehicles and competitor to Tesla (TSLA), is reportedly looking into setting up a Mexican factory and Apple (AAPL) is reportedly preparing an AI tool. Here’s what investors need to know today.

1. January Producer Prices On Watch in Week of Mixed Economic Data 

January’s Producer Price Index (PPI), which tracks the prices producers receive for their goods and services, is due out at 8:30 a.m. ET and is expected to show an increase of 0.1%, reversing three months of consecutive declines.  The PPI index decreased 0.1% in December. Investors will look at the data as a signal of where inflation is going, as the Federal Reserve has said it’s looking for more evidence that price pressures are under control before cutting interest rates. Other indicators due today that will give signs of the U.S economy’s health are housing starts and building permits. Investors will balance today’s numbers against data points released earlier this week that presented somewhat conflicting signals on the state of the economy—yesterday’s sluggish January retail sales report and a hot consumer price index report where prices beat forecasts.

2. Coinbase Soars After Posting Higher-than-Forecast Results 

Coinbase (COIN) shares soared 12% in pre-market trading after rising transaction volumes led the largest U.S. cryptocurrency exchange to report higher-than-forecast quarterly earnings and revenue.  The exchange’s results were also boosted by the excitement around spot Bitcoin ETF approvals at the end of last year. Coinbase said it expects first-quarter subscription and services revenue—a segment that includes activities outside trading—to range between $410 million and 480 million, again beating Wall Street estimates. The Securities and Exchange Commission officially approved several spot Bitcoin ETFs last month.

3. Apple Prepares AI Tool to Compete With Microsoft’s GitHub Copilot 

Apple (AAPL) is reportedly is close to completing an artificial intelligence (AI) tool that would rival Microsoft’s (MSFT) GitHub Copilot.  The company has been working on the tool for the last year as part of the next major version of Xcode, its flagship programming software. Apple has been a laggard in the AI race, as hype around the technology boosts its competitors’ stocks. Its shares are down around 1% this year, versus Microsoft’s, which is almost 10% higher.

4. China’s BYD Scouts Locations for Mexico Factory as Launchpad for U.S. Entry 

China’s BYD Auto Co. (BYDDF), one of the world’s largest electric-vehicle makers, is reportedly scouting locations in Mexico for a factory, as it sets its sights on expanding in North America. Building cars in Mexico would allow the Shenzhen-based car company, a major rival of Telsa’s (TSLA), to avoid the high import tariffs it would face if it sold its cars straight from China into the U.S.

5. Applied Materials Surges after Earnings Beat, Bullish Guidance 

Applied Materials Inc. (AMAT), the maker of chip-making machinery, jumped 13% in pre-market trading after its earnings for the quarter ended Jan. 28 beat expectations. The company, whose hardware is used in chips made by Intel (INTC) and Taiwan Semiconductor Manufacturing Company (TSM), also gave bullish guidance for sales, saying it expects net revenue to be about $6.5 billion in its second-quarter of fiscal 2024.

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