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Barchart
Barchart
Oleksandr Pylypenko

Stocks Plunge Before the Open as Meta’s Revenue Forecast Disappoints, U.S. GDP Data and Earnings in Focus

June S&P 500 E-Mini futures (ESM24) are down -0.53%, and June Nasdaq 100 E-Mini futures (NQM24) are down -0.87% this morning as a disappointing revenue outlook for the current quarter from Meta weighed on sentiment, while market participants braced for a new round of U.S. economic data and quarterly reports from heavyweight names.

Meta Platforms (META) slumped over -12% in pre-market trading after the Facebook parent provided weaker-than-expected Q2 revenue guidance and increased its full-year capital expenditures forecast.

In yesterday’s trading session, Wall Street’s major averages ended mixed. Tesla (TSLA) surged over +12% and was the top percentage gainer on the S&P 500 and Nasdaq 100 as the automaker’s commitment to accelerate the launch of new vehicles, including more affordable models, overshadowed weaker-than-expected Q1 results. Also, Hasbro (HAS) climbed more than +11% after the toymaker reported better-than-expected Q1 results. In addition, Texas Instruments (TXN) gained over +5% after the chipmaker posted upbeat Q1 results and offered a solid Q2 revenue forecast. On the bearish side, Old Dominion Freight Line (ODFL) plunged more than -11% and was the top percentage loser on the S&P 500 and Nasdaq 100 after reporting weaker-than-expected Q1 revenue.

Economic data on Wednesday showed that U.S. durable goods orders rose +2.6% m/m in March, stronger than expectations of +2.5% m/m. At the same time, U.S. March core durable goods orders rose +0.2% m/m, weaker than expectations of +0.3% m/m.

Meanwhile, U.S. rate futures have priced in a 4.0% chance of a 25 basis point rate cut at the next FOMC meeting in May and a 16.4% chance of a 25 basis point rate cut at June’s monetary policy meeting.

First-quarter corporate earnings season rolls on, with investors awaiting fresh reports from major companies today, including Microsoft (MSFT), Alphabet (GOOGL), Merck (MRK), Gilead (GILD), Caterpillar (CAT), Comcast (CMCSA), Intel (INTC), and Altria Group (MO). 

On the economic data front, all eyes are focused on the first estimate of U.S. first-quarter gross domestic product, due later in the day. Economists, on average, forecast that U.S. GDP will stand at +2.5% q/q in the first quarter, compared to the fourth-quarter figure of +3.4% q/q.

Also, investors will likely focus on U.S. Pending Home Sales data, which came in at +1.6% m/m in February. Economists foresee the March figure to be +0.3% m/m.

U.S. Wholesale Inventories preliminary data will come in today. Economists expect March’s figure to be +0.2% m/m, compared to the previous number of +0.5% m/m.

U.S. Initial Jobless Claims data will be reported today as well. Economists estimate this figure to be 214K, compared to last week’s value of 212K.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.645%, down -0.21%.

The Euro Stoxx 50 futures are down -0.36% this morning as investors digested a raft of corporate updates on the busiest day of the earnings season. Technology and food and beverage stocks underperformed on Thursday, while mining and healthcare stocks gained ground. A survey showed on Thursday that German consumer confidence is set to increase in May due to households’ more optimistic income expectations, reaching its highest level since May 2022. Meanwhile, European Central Bank board member Isabel Schnabel remarked on Thursday that the final stage of returning Eurozone inflation to 2% would be bumpy, citing erosion in productivity and high service costs as some of the primary risks. In corporate news, Anglo American Plc (AAL.LN) surged over +13% after BHP Group made an all-share takeover proposal valuing it at 31.1 billion pounds ($38.8 billion). Also, Barclays Plc (BARC.LN) climbed more than +3% after reporting stronger-than-expected Q1 revenue. In addition, Unilever Plc (ULVR.LN) gained over +5% after the Anglo-Dutch consumer goods group reported Q1 sales that topped forecasts. At the same time, Nestle Sa (NESN.Z.IX) slid more than -3% after reporting a slowdown in Q1 organic sales growth.

Germany’s GfK Consumer Climate Index was released today.

The German May GfK Consumer Climate Index came in at -24.2, stronger than expectations of -25.9.

Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.27%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -2.16%.

China’s Shanghai Composite Index closed slightly higher today as sentiment remained upbeat. Automobile and bank stocks led the gains on Thursday, while energy and semiconductor stocks underperformed. Meanwhile, HSBC reported on Thursday that global investors have ramped up their allocation to China, notably reducing their bearish bets on the market. “GEM funds have rolled back on their underweight on mainland China and turned neutral, while Asia’s funds exposure on the market is now at a seven-month high,” Herald van der Linde, HSBC strategist, said in the note on Thursday. In other news, Secretary of State Antony Blinken emphasized the necessity for the world’s largest economies to “lay out our differences” as he initiated two days of talks in China. In corporate news, Great Wall Motor climbed over +7% after the company reported a more than ten-fold increase in Q1 net profit and pledged to return more to shareholders and improve disclosures. Also, China Overseas Land and Investment gained more than +6% after the property developer reported an unexpected 22.2% increase in Q1 operating profit.

Japan’s Nikkei 225 Stock Index closed sharply lower today. Electronics, machinery, and automobile stocks underperformed on Thursday. Data from the Cabinet Office on Thursday showed that Japan’s final leading economic index for gauging the economic outlook was unchanged from the preliminary reading for February. Meanwhile, the yen weakened beyond 155 per dollar for the first time in over three decades, prompting renewed concerns about Tokyo’s potential intervention. In corporate news, Canon plunged over -8% after the camera maker reported weaker-than-expected full-year operating profit. Also, Fanuc fell more than -3% after the robot maker provided a weaker-than-expected full-year profit forecast. Investor attention is now focused squarely on the outcome of the Bank of Japan’s two-day monetary policy meeting scheduled for Friday. While the BOJ is widely expected to maintain interest rates unchanged following a historic hike in March, an improved outlook for Japanese wages coupled with a significant drop in the yen could trigger hawkish signals from the central bank. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +7.25% to 21.46.

The Japanese February Leading Index came in at 111.8, in line with expectations.

Pre-Market U.S. Stock Movers

Meta Platforms (META) slumped over -12% in pre-market trading after the Facebook parent provided weaker-than-expected Q2 revenue guidance and increased its full-year capital expenditures forecast.

International Business Machines (IBM) plunged more than -8% in pre-market trading after the tech giant reported weaker-than-expected Q1 sales and confirmed its deal to acquire HashiCorp for $35 a share in cash.

ServiceNow (NOW) slid over -4% in pre-market trading after the cloud computing firm issued below-consensus Q2 subscription revenue guidance. 

Ford Motor (F) gained more than +2% in pre-market trading after the automaker reported better-than-expected Q1 results and raised its full-year free cash flow forecast.

Cidara Therapeutics (CDTX) surged about +32% in pre-market trading after reacquiring the rights to its antiviral drug CD388 and agreeing to a $240 million private placement of its stock.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - April 25th

Microsoft (MSFT), Alphabet (GOOGL), Merck&Co (MRK), T-Mobile US (TMUS), Caterpillar (CAT), Comcast (CMCSA), Intel (INTC), Union Pacific (UNP), S&P Global (SPGI), Honeywell (HON), Bristol-Myers Squibb (BMY), KLA Corp (KLAC), Gilead (GILD), Altria (MO), Northrop Grumman (NOC), Capital One Financial (COF), Valero Energy (VLO), DexCom (DXCM), Edwards Lifesciences (EW), Arthur J Gallagher (AJG), Carrier Global (CARR), Hess (HES), Keurig Dr Pepper (KDP), Newmont Goldcorp (NEM), Dow (DOW), L3Harris Technologies (LHX), Nasdaq Inc (NDAQ), Royal Caribbean Cruises (RCL), Agnico Eagle Mines (AEM), Xcel Energy (XEL), Hartford (HIG), Fair Isaac (FICO), West Pharmaceutical Services (WST), Tractor Supply (TSCO), AvalonBay (AVB), ResMed (RMD), Willis Towers Watson (WTW), Mobileye Global (MBLY), Tradeweb Markets (TW), Dover (DOV), DTE Energy (DTE), Weyerhaeuser (WY), Western Digital (WDC), FirstEnergy (FE), Erie Indemnity (ERIE), Principal Financial (PFG), Cincinnati Financial (CINF), VeriSign (VRSN), Snap (SNAP), Check Point Software (CHKP), Textron (TXT), CMS Energy (CMS), Carlisle (CSL), Reliance Steel&Aluminum (RS), Laboratory America (LH), Southwest Airlines (LUV), SS&Cs (SSNC), Pool (POOL), Lincoln Electrics (LECO), TransUnion (TRU), Healthpeak Properties (DOC), AO Smith (AOS), Gaming & Leisure Properties (GLPI), TFI Intl (TFII), International Paper (IP), Juniper (JNPR), Eastman Chemical (EMN), TechnipFMC (FTI), Comfort Systems (FIX), Kinsale Capital (KNSL), Wex (WEX), CubeSmart (CUBE), AptarGroup (ATR), Skechers (SKX), American Airlines (AAL), Roku (ROKU), Old Republic (ORI), Oshkosh (OSK), TAL Education (TAL), Appfolio Inc (APPF), FTI Consulting (FCN), Cullen/Frost Bankers (CFR), Robert Half (RHI), Nov (NOV), Applied Industrial Technologies (AIT), Mohawk Industries (MHK), Allison Transmission (ALSN), SPS Commerce (SPSC), Olin (OLN), South State (SSB), Boyd Gaming (BYD), Kirby (KEX), Brunswick (BC), ADT (ADT), Casella (CWST), Harley-Davidson (HOG), Columbia Sportswear (COLM).

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On the date of publication, Oleksandr Pylypenko 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.
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