The S&P 500 Index ($SPX) (SPY) this morning is down -0.05%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.21%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.52%.
US stock indexes are mixed, with the Nasdaq 100 posting a 1-week high. Strength in technology stocks is supportive of the overall market. Tesla is up more than +11% despite reporting weaker-than-expected Q1 EPS after it said it will accelerate the launch of less-expensive models as soon as this year. Also, semiconductor stocks are climbing after Texas Instruments reported stronger-than-expected Q1 revenue and forecasted Q2 revenue above consensus. In addition, Hilton Worldwide Holdings is up more than +6% after reporting better-than-expected Q1 adjusted Ebitda and raising its full-year adjusted Ebitda forecast.
On the negative side, Teledyne is down more than -11% after reporting weaker-than-expected Q1 net sales. Also, Old Dominion Freight Line is down more than -9% after reporting Q1 revenue below consensus. In addition, General Dynamics is down more than -5% after reporting Q1 EPS below consensus.
Stock indexes fell back from their best levels on rising bond yields. Also, an increase in geopolitical risks is weighing on stocks after Israel today said it struck about 40 Hezbollah sites in South Lebanon, risking increased hostilities with Hezbollah on Israel’s northern border.
Q1 corporate earnings take center stage for stocks with 180 of the S&P 500 companies, or more than 40% of total capitalization, scheduled to report earnings this week, including four of the “Magnificent Seven” megacap technology companies. Meta Platforms will report after the close today, and Alphabet and Microsoft will report on Thursday.
US Mar capital goods new orders nondefense ex-aircraft and parts, a proxy for capital spending, rose +0.2% m/m, right on expectations.
US weekly MBA mortgage applications fell -2.7% in the week ended April 19. The purchase mortgage sub-index fell -1.0% w/w, and the refinancing mortgage sub-index fell -5.6% w/w. The average 30-year fixed mortgage rate rose +0.11 bp to a 5-month high of 7.24% from 7.13% in the prior week.
The markets are discounting the chances for a -25 bp rate cut at 3% for the next FOMC meeting on April 30-May 1 and 16% for the following meeting on June 11-12.
Overseas stock markets today are mixed. The Euro Stoxx 50 is down -0.37%. China's Shanghai Composite closed up +0.76%. Japan's Nikkei Stock Index closed up +2.42%.
Interest Rates
June 10-year T-notes (ZNM24) this morning are down -12 ticks. The 10-year T-note yield is up +5.6 bp at 4.656%. T-notes prices today are weighed down by negative carryover from a slide in 10-year German bund prices to a 4-3/4 month low. Also, strength in stocks today has curbed safe-haven demand for T-notes. In addition, supply pressures are negative for T-note prices as the Treasury will auction a record $70 billion of 5-year T-notes later this afternoon as part of this week’s $183 billion T-note auctions.
European government bond yields today are higher. The 10-year German bund yield rose to a 4-3/4 month high of 2.595% and is up +8.6 bp at 2.588%. The 10-year UK gilt yield rose to a 5-1/4 month high of 4.341% and is up +9.4 bp at 4.335%.
The German Apr IFO business climate rose +1.5 to an 11-month high of 89.4, stronger than expectations of 88.8.
ECB Governing Council member and Bundesbank president Nagel said a June rate cut by the ECB "won't necessarily" start a series of rate cuts.
US Stock Movers
Tesla (TSLA) is up more than +13% to lead gainers in the S&P 500 and Nasdaq 100 despite reporting weaker-than-expected Q1 EPS after it said it will accelerate the launch of less-expensive models as soon as this year.
Hasbro (HAS) is up more than +12% after reporting Q1 adjusted EPS of 61 cents, well above the consensus of 27 cents.
Westinghouse Air Brake Technologies (WAB) is up more than +10% after reporting Q1 net sales of $2.50 billion, above the consensus of $2.40 billion, and raised its full-year sales estimate to $10.25 billion-$10.55 billion from a previous estimate of $10.05 billion-$10.35 billion.
CoStar Group (CSGP) is up more than +8% after reporting Q1 revenue of $656 million, stronger than the consensus of $649.5 million.
Boston Scientific (BSX) is up more than +6% after reporting Q1 adjusted EPS of 56 cents, better than the consensus of 51 cents, and raising its full-year adjusted EPS forecast to $2.29-$2.34 from a previous forecast of $2.23-$2.27, above the consensus of $2.26.
Semiconductor stocks are climbing after Texas Instruments reported Q1 revenue of $3.66 billion, stronger than the consensus of $3.60 billion, and forecast Q2 revenue of $3.65 billion-$3.95 billion, the midpoint above the consensus of $3.78 billion. As a result, Texas Instruments (TXN) and ON Semiconductor (ON) are up more than +6%. Also, Microchip Technology (MCHP) and Analog Devices (ADI) are up more than +5%. In addition, NXP Semiconductors NV (NXPI) is up more than +4%, and Marvel Technology (MRVL), KLA Corp (KLAC), and Lam Research (LRCX) are up more than +2%. Finally, Intel (INTC) is up more than +2% to lead gainers in the Dow Jones Industrials.
Hilton Worldwide Holdings (HLT) is up more than +6% after reporting Q1 adjusted Ebitda of $750 million, stronger than the consensus of $705.4 million, and raising its full-year adjusted Ebitda forecast to $3.38 billion-$3.43 billion from a previous forecast of $3.33 billion-$3.38 billion, above the consensus of $3.37 billion.
Boeing (BA) is up more than +2% to lead gainers in the Dow Jones Industrials after reporting Q1 revenue of $16.57 billion, stronger than the consensus of $16.25 billion.
Teledyne Technologies (TDY) is down more than -11% to lead losers in the S&P 500 after reporting Q1 net sales of $1.35 billion, weaker than the consensus of $1.40 billion.
Old Dominion Freight Line (ODFL) is down more than -9% to lead losers in the Nasdaq 100 after reporting Q1 revenue of $1.46 billion, below the consensus of $1.47 billion.
Fortive Corp (FTV) is down more than -5% after reporting Q1 revenue of $1.52 billion, weaker than the consensus of $1.53 billion.
Masco (MAS) is down more than -5% after reporting Q1 net sales of $1.93 billion, weaker than the consensus of $1.94 billion and forecasting full-year adjusted EPS of $4.00-$4.25, the midpoint below the consensus of $4.14.
General Dynamics (GD) is down more than -5% after reporting Q1 EPS of $2.88, weaker than the consensus of $2.91.
Bunge Global SA (BG) is down more than -4% after reporting Q1 net sales of $13.42 billion, weaker than the consensus of $13.78 billion, and said Q2 will be “a little bit softer.”
Humana (HUM) is down more than -4% after pulling guidance for 2025, saying it needs “more clarity” before providing guidance.
Norfolk Southern (NSC) is down more than -2% after reporting Q1 adjusted EPS of $2.49, below the consensus of $2.55.
Earnings Reports (4/24/2024)
Align Technology Inc (ALGN), Amphenol Corp (APH), AT&T Inc (T), Avery Dennison Corp (AVY), Biogen Inc (BIIB), Boeing Co/The (BA), Boston Scientific Corp (BSX), Bunge Global SA (BG), Chipotle Mexican Grill Inc (CMG), CME Group Inc (CME), Entergy Corp (ETR), Ford Motor Co (F), Fortive Corp (FTV), General Dynamics Corp (GD), Hasbro Inc (HAS), Hilton Worldwide Holdings Inc (HLT), Humana Inc (HUM), International Business Machine (IBM), Interpublic Group of Cos Inc/T (IPG), Lam Research Corp (LRCX), Masco Corp (MAS), Meta Platforms Inc (META), Molina Healthcare Inc (MOH), Norfolk Southern Corp (NSC), Old Dominion Freight Line Inc (ODFL), O'Reilly Automotive Inc (ORLY), Otis Worldwide Corp (OTIS), Raymond James Financial Inc (RJF), Rollins Inc (ROL), ServiceNow Inc (NOW), Synchrony Financial (SYF), TE Connectivity Ltd (TEL), Teledyne Technologies Inc (TDY), Teradyne Inc (TER), Thermo Fisher Scientific Inc (TMO), Tyler Technologies Inc (TYL), United Rentals Inc (URI), Universal Health Services Inc (UHS), Waste Management Inc (WM), Westinghouse Air Brake Technol (WAB).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
