Stocks finished essentially flat on Monday, as Treasury bond yields jumped to the highest levels in more than four months and Wall Street braced for a challenging week that includes key inflation data and the start of the first quarter earnings season.
The Dow Jones Industrial Average edged down 0.03% or 11 points to 38,829.80, while the S&P 500 dipped 0.04% to 5,202.39, and the tech-heavy Nasdaq gained 0.03% to 16,253.96.
“First quarter earnings season kicks off this week with several big banks reporting this Friday, including sector bellwether JPMorgan Chase,” said Jeffrey Buchbinder, chief equity strategist at LPL Financial. “This quarter will seem quite similar to the fourth in terms of growth and drivers, with mega cap technology leading the way.”
Buchbinder said the economic environment and AI investment remain supportive of corporate profits, "so downside surprises this earnings season seem unlikely. "
"Expectations for economic growth have firmed recently while earnings estimates have remained steady, an indication that the bar is not too high or too low," he said.
Bottom line, Buchbinder said, "expect corporate America to produce typical upside relative to expectations in the quarter and deliver S&P 500 earnings growth of around 6%."
Estimate cuts are probably not in the cards, he added, "though currency headwinds may temper companies’ outlook a bit."
Updated at 1:44 PM EDT
Meagre gains
Stocks are holding onto the slimmest of gains heading into the final hours of trading, with the S&P 500 up 3 points, or 0.06%, and the Nasdaq up 68 points, or 0.05%.
Benchmark 10-year notes yields, meanwhile, eased to 4.416% while 2-year notes were pegged at 4.774% ahead of tomorrow's $58 billion auction of new 3-year notes.
The US 2-10 spread (aka the 10 year minus 2 year Treasury yield) has been inverted for 458 trading days.
— John Kicklighter (@JohnKicklighter) April 8, 2024
That's longer than any instance between the first point of inversion to the realized US #recession in the past 40 years. #ThisTimeIsDifferent ? pic.twitter.com/HvlMX5kOMF
Updated at 11:07 AM EDT
Fed up
The New York Fed's benchmark survey of consumer expectations for the month of March, published Monday, showed Americans expected year-ahead price increases of around 3%, unchanged from its last polling in February.
At the same time, consumers said the chances of them missing an near-term debt payment rose to the highest levels in four years, suggesting a run-down in pandemic era savings and broader concerns over the impact of faster inflation.
Updated at 9:45 AM EDT
Mixed open
Stocks are off to a muted start to the week, with the S&P 500 slipping 1 point in the opening minutes of trading and the Nasdaq down 5 points. The Dow, meanwhile, has added around 67 points.
S&P 500 Opening Bell Heatmap (Apr. 08, 2024)$SPY +0.13% 🟩$QQQ +0.15% 🟩$DJI +0.10% 🟩$IWM +0.74% 🟩 pic.twitter.com/kflYQpHkPE
— Wall St Engine (@wallstengine) April 8, 2024
Updated at 8:57 AM EDT
Robo-copped
Uber Technologies (UBER) share moved lower in early Monday trading, even after the support of a price target upgrade from Wells Fargo, as investors looked to the impact on the ride-sharing group's profits should Tesla launch its long-promised fleet of robotaxis.
Wells Fargo lifted its Uber price target by $5, to $95 per share, adding that it expects solid first quarter earnings, as well as a robust outlook, when the group reports on May 7.
Uber shares were marked 0.21% lower in at $77.00 each in pre-market trading.
If $TSLA robotaxis are imminent, no one told $UBER yet. pic.twitter.com/oyeiHhVOWZ
— Diogenes (@WallStCynic) April 8, 2024
Updated at 7:59 AM EDT
Meet the new boss?
JPMorgan (JPM) shares nudged higher after Jamie Dimon published his annual letter to investors, noting for the first time that the bank is looking towards a leadership transition that could see him step away from the role of CEO.
While no timeframe was discussed, JPMorgan noted that the board is "spending significant time on developing operating committee members who are well-known to shareholders as strong potential CEO candidates", with current COO Daniel Pinto tabbed as "a key executive who is immediately ready to fulfill the responsibilities of the CEO" should the need arise.
Dimon, who has lead the biggest U.S. bank since 2006, underwent emergency heart surgery in 2020 and has been linked to senior roles in government, as well as candidate for the Presidency, over the past five years.
JPMorgan shares were marked 0.18% higher in pre-market trading to indicate an opening bell price of $197.80 each.
MARKET RECON: Volatility, Charting the Topping Process, Macro Data Points, Job Creation, Fed $INTC $MRVL $DAL $STZ $JPM $WFC $C $GE $SPX $COMPQ $RUT $DJT #MarketRecon https://t.co/wqykMZVO9i via @sarge986
— Stephen Guilfoyle (@Sarge986) April 8, 2024
Stock Market Today
Stocks rallied hard on Friday, lifting the S&P 500 more than 57 points on the session to take the benchmark's year-to-date gain past 9.1%. The market move followed a stronger-than-expected March payrolls report that showed solid hiring with wage gains that were largely in line with Wall Street forecasts.
However, when set against the recent "higher for longer" messaging from Federal Reserve officials, the report has kept market bets for a June rate cut muted at around 46.1%, some 10 percentage points below month-ago levels, according to CME Group data.
Related: Americans doubt the economy's stunning success — they shouldn't
Treasury bond yields were also moving higher Friday but failed to halt the afternoon rally on Wall Street, as traders adjusted their near-term rate and growth forecasts.
Wednesday's inflation report will provide details as to how, and to what extent, wages and other pressures are driving price pressures. Economists are looking for a modest easing in the closely tracked core CPI reading, which was last pegged at 3.8%.
Benchmark 10-year Treasury note yields added another 4 basis points in overnight trading to change hands at 4.441% heading into the start of the New York session, while 2-year notes were pegged 3 basis points higher at 4.781%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.07% higher at 104.366.
Apart from Wednesday's CPI report, as well as a reading on factory gate inflation the following day, investors are also braced for the start of the first quarter earnings season, with around nine S&P 500 companies set to report this week.
Analysts see collective S&P 500 profits rising by 5% from a last year to a share-weighted total of $457.4 billion, a figure is expected to improve to around $494.1 billon over the three months ending in June.
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500 are indicating a 1 point opening bell bump, while those linked to the Dow Jones Industrial Average suggest a 22 point advance.
The tech-focused Nasdaq, which is up 8.24% for the year, is priced for an 11 point gain.
Tesla (TSLA) shares are leading movers in the premarket, rising 3.4% on volume of nearly half a million shares, following CEO Elon Musk's announcement that the carmaker will unveil its robotaxi prototype in August.
More Economic Analysis:
- Bond markets tell Fed rate story that stocks still ignore
- February inflation surprises with modest uptick, but core pressures ease
Vanguard unveils bold interest rate forecast ahead of Fed meeting
In overseas markets, Europe's Stoxx 600 was marked 0.22% higher in early Frankfurt trading, with investors eyeing the European Central Bank's April policy meeting later this week, while Britain's FTSE 100 added 0.12% in London.
Overnight in Asia, a weaker yen, tied in part to muted economic outlook data, helped the Nikkei 225 rise 0.91% in Tokyo while the regionwide MSCI ex-Japan index rose 0.16% into the close of trading.
Related: Veteran fund manager picks favorite stocks for 2024
