June S&P 500 E-Mini futures (ESM24) are up +0.30%, and June Nasdaq 100 E-Mini futures (NQM24) are up +0.43% this morning as investor attention turned to crucial U.S. jobs data due Friday after Fed Chair Jerome Powell reiterated that the central bank will likely reduce rates this year.
In yesterday’s trading session, Wall Street’s major averages ended mixed. Paramount Global (PARA) surged about +15% and was the top percentage gainer on the S&P 500 after Bloomberg reported that Shari Redstone, controlling shareholder of Paramount, had reached a tentative deal to sell her stake in the company to Skydance Media. Also, chip stocks advanced, with Western Digital (WDC) and Micron Technology (MU) climbing more than +4%. In addition, Ford Motor (F) rose over +2% following the automaker’s announcement that its U.S. auto sales increased by 7% in Q1, buoyed by strong demand for gas-electric hybrids. On the bearish side, Ulta Beauty (ULTA) plunged more than -15% and was the top percentage loser on the S&P 500 after warning of a slowdown in demand in the current quarter at an industry conference. Also, Intel (INTC) slumped over -8% and was the top percentage loser on the Dow and Nasdaq 100 after the company said its foundry business recorded an operating loss of $7 billion in 2023, steeper than the $5.2 billion in 2022.
The ADP National Employment report on Wednesday showed private payrolls rose by 184K jobs in March, stronger than expectations of 148K. At the same time, the U.S. March ISM services index unexpectedly fell to 51.4, weaker than expectations of 52.8. In addition, the U.S. ISM services price paid sub-index fell to a 4-year low of 53.4 in March, trailing the 58.4 consensus.
Federal Reserve Chair Jerome Powell signaled on Wednesday that policymakers would await clearer indications of lower inflation before considering interest rate cuts. Powell mentioned that recent higher-than-expected inflation figures did not “materially change” the overall picture. He reiterated his anticipation that it will likely be appropriate to start reducing rates “at some point this year.” At the same time, Atlanta Fed President Raphael Bostic stated that it would probably be appropriate to lower interest rates in the fourth quarter, reaffirming his expectation of only one rate cut this year given the economy’s strength and a slower inflation decline.
Meanwhile, U.S. rate futures have priced in a 4.8% chance of a 25 basis point rate cut at May’s policy meeting and a 55.8% probability of a 25 basis point rate cut at the June meeting.
Today, all eyes are focused on U.S. Initial Jobless Claims data in a couple of hours. Economists, on average, forecast that Initial Jobless Claims will come in at 213K, compared to last week’s value of 210K.
Also, investors will likely focus on U.S. Trade Balance data, which stood at -$67.40B in January. Economists foresee the February figure to be -$66.90B.
In addition, market participants will be looking toward a batch of speeches from Fed officials Barkin, Goolsbee, Harker, Mester, and Kugler.
In the bond markets, United States 10-year rates are at 4.361%, up +0.16%.
The Euro Stoxx 50 futures are up +0.14% this morning as investors digested a raft of regional economic data and looked ahead to the release of the minutes of the European Central Bank’s latest meeting. Mining and automobile stocks outperformed on Thursday, while media stocks lost ground. A survey showed on Thursday that Eurozone business activity returned to growth in March for the first time since May 2023. Meanwhile, investors await the release of the minutes from the ECB’s March meeting later in the session for insights into the timing of the highly anticipated first interest rate cut. In corporate news, Basilea Pharmaceutica Ag (BSLN.Z.IX) surged over +9% after the U.S. FDA approved the Swiss firm’s antibiotic Zevtera. Also, Compugroup Medical (COP.D.DX) climbed more than +6% after Morgan Stanley upgraded the stock to Overweight from Equal Weight.
Spain’s Services PMI, Italy’s Services PMI, France’s Services PMI, Germany’s Services PMI, Eurozone’s Composite PMI, Eurozone’s Services PMI, and Eurozone’s PPI data were released today.
The Spanish March Services PMI arrived at 56.1, stronger than expectations of 55.5.
The Italian March Services PMI came in at 54.6, stronger than expectations of 53.0.
The French March Services PMI stood at 48.3, stronger than expectations of 47.8.
The German March Services PMI was at 50.1, stronger than expectations of 49.8.
Eurozone March Composite PMI arrived at 50.3, stronger than expectations of 49.9.
Eurozone March Services PMI came in at 51.5, stronger than expectations of 51.1.
Eurozone February PPI has been reported at -1.0% m/m and -8.3% y/y, compared to expectations of -0.6% m/m and -8.6% y/y.
Japan’s Nikkei 225 Stock Index (NIK) closed up +0.81%, while Chinese markets were closed for a holiday.
Today, China’s Shanghai Composite Index was closed for the Ching Ming Festival (Tomb Sweeping Day). Mainland Chinese markets will reopen on Monday, April 8th.
Japan’s Nikkei 225 Stock Index closed higher today. Utilities, financial, and electronics stocks outperformed on Thursday. Meanwhile, the yen was flat against the dollar. Former top currency diplomat Hiroshi Watanabe said Thursday that Japanese authorities are unlikely to intervene in the currency market unless the yen falls below 155 to the dollar. In other news, the Bank of Japan cut its economic assessment for seven out of nine regions in the country while maintaining its view for the remaining two areas. In its quarterly regional economic report released Thursday, the central bank noted that the economy was picking up in most regions, although there was some weakness. In corporate news, Kao Corp. surged over +5% after Hong Kong-based activist investor Oasis Management announced plans to launch a campaign against the company to redefine its brand portfolio and improve marketing. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -2.88% to 19.54.
Pre-Market U.S. Stock Movers
Levi Strauss (LEVI) climbed over +8% in pre-market trading after the company reported upbeat Q1 results and raised its full-year EPS guidance.
BlackBerry (BB) gained more than +4% in pre-market trading after the company reported better-than-expected Q4 results.
Intuitive Machines (LUNR) advanced over +6% in pre-market trading following the announcement that NASA awarded the company $30 million to conduct a feasibility assessment for a Lunar Terrain Vehicle.
Resources Connection (RGP) fell more than -2% in pre-market trading after reporting weaker-than-expected Q3 revenue and providing below-consensus Q4 revenue guidance.
Bumble (BMBL) dropped over -1% in pre-market trading after Raymond James downgraded the stock to Market Perform from Outperform.
Block (SQ) slid more than -3% in pre-market trading after Morgan Stanley downgraded the stock to Underweight from Equal Weight with a price target of $60.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - April 4th
RPM (RPM), Lamb Weston Holdings (LW), Simply Good Foods (SMPL), Lindsay (LNN), Kura Sushi (KRUS), Radius Recycling (RDUS), AngioDynamics (ANGO).
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