June S&P 500 futures (ESM23) are down -0.21%, and June Nasdaq 100 E-Mini futures (NQM23) are down -0.18% this morning as market participants geared up for earnings results from some of the biggest tech heavyweights as well as U.S. economic data that could shed more light on the future path of interest rates.
In Friday’s trading session, Wall Street’s main indexes closed slightly higher as mixed quarterly results continued to weigh on investor sentiment. W. R. Berkley Corp (WRB) plunged over -9% after the insurer reported weaker-than-expected Q1 adjusted earnings. Also, Schlumberger NV (SLB) slid more than -4% after the oil field services company’s Q1 cash flow from operations fell short of estimates. In addition, Regions Financial Corporation (RF) dropped over -2% after the bank reported downbeat Q1 results and trimmed its outlook for 2023 net interest income growth. On the positive side, Procter & Gamble Company (PG) soared more than +3% after reporting stronger-than-expected Q3 results and lifting its FY23 sales growth outlook. Also, HCA Holdings Inc (HCA) climbed over +3% after the company reported upbeat Q1 results and raised its FY23 outlook.
Data on Friday showed the U.S. S&P Global Composite PMI rose to an 11-month high of 53.5 in April, above economists’ expectations of 52.8. Also, the U.S. Manufacturing PMI unexpectedly increased to 50.4 in April, the highest level in six months. In addition, the U.S. April Services PMI rose to 53.7, stronger than expectations of 51.5.
U.S. rate futures have priced in an 85.4% probability of a 25 basis point rate increase and a 14.6% chance of no hike at next month’s policy meeting.
In other news, Bed Bath & Beyond (BBBY) filed for Chapter 11 bankruptcy protection on Sunday after the home goods retailer failed to secure a funding lifeline.
First-quarter earnings season, meanwhile, is gaining momentum, with investors awaiting fresh reports from major global companies, including Coca-Cola (KO), Microsoft (MSFT), Alphabet (GOOGL), Altria (MO), Amazon (AMZN), and Meta Platforms (META).
On the economic front, the March reading of the U.S. core personal consumption expenditures price index, the Fed’s preferred inflation gauge, will be the main highlight. Also, market participants will be eyeing a spate of economic data this week, including the U.S. CB Consumer Confidence, Building Permits, S&P/CS HPI Composite - 20, New Home Sales, Richmond Manufacturing Index, Core Durable Goods Orders, Durable Goods Orders, Goods Trade Balance (preliminary), Crude Oil Inventories, GDP (preliminary), GDP Price Index (preliminary), Initial Jobless Claims, Pending Home Sales, Employment Cost Index, PCE Price index, Personal Income, Personal Spending, Chicago PMI, Michigan Consumer Expectations, and Michigan Consumer Sentiment.
The U.S. economic data slate is mainly empty on Monday.
In the bond markets, United States 10-Year rates are at 3.537%, down -0.97%.
The Euro Stoxx 50 futures are up +0.02% this morning as investors brace for more corporate reports from some big-name European banks and big tech companies on Wall Street as well as crucial economic data. Meanwhile, healthcare stocks are outperforming, with shares of Philips Kon (PHIA.NA) climbing over +10% after the Dutch medical technology group reported better-than-expected first-quarter results. In other news, Software Ag (SOW.D.DX) jumped about +50% after Silver Lake offered to buy the German software developer.
Germany’s Ifo Business Climate Index, Germany’s Business Expectations, and Germany’s Current Assessment data were released today.
The German April Ifo Business Climate Index has been reported at 93.6, weaker than expectations of 94.0.
The German April Business Expectations stood at 92.2, stronger than expectations of 91.5.
The German April Current Assessment came in at 95.0, weaker than expectations of 96.0.
Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.78%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.10%.
China’s Shanghai Composite today closed lower as mixed economic readings raised concerns over the sustainability of the economic recovery. China’s gross domestic product grew +4.5% y/y in the first quarter of the year, boosted by increased consumption after Beijing relaxed COVID-19 curbs, but “favorable base effects will fade” in the second half, while “the economy remains characterized by an uneven pace of recovery,” DBS wrote in a note. Meanwhile, Chinese digital currency-related stocks climbed on Monday after state media Securities Times reported on Sunday that civil servants and other state sector employees in Changshu, a county-level city under the jurisdiction of Suzhou, will start receiving a salary in digital yuan from May.
“Uncertainty on the real estate recovery is a major factor holding back the market right now,” said Qi Wang, a co-founder and CIO of MegaTrust Investment.
Japan’s Nikkei 225 Stock Index closed slightly higher as investors remained cautious ahead of more Japanese corporate earnings and a central bank meeting due later in the week. Meanwhile, ANA Holdings Inc climbed more than +3% after the largest Japanese airline raised its profit guidance, while other tourism-related stocks also gained ground amid optimism over increasing visitor numbers. Investor attention is now on the Bank of Japan’s two-day policy meeting, with some analysts expecting the central bank to scale back its yield curve control policy. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down 0.56% to 16.10.
Pre-Market U.S. Stock Movers
Tesla Inc (TSLA) fell about -1% in pre-market trading following a report that the company started producing a version of the Model Y in its Shanghai factory earlier this month to be sold in Canada.
Bed Bath & Beyond (BBBY) plunged about -38% in pre-market trading after the home goods retailer filed for Chapter 11 bankruptcy protection on Sunday.
Kingsoft Cloud Holdings Ltd (KC) slid more than -1% in pre-market trading after Goldman Sachs downgraded the stock to sell from neutral with a price target of $5.10.
First Solar Inc (FSLR) dropped over -2% in pre-market trading after Citi downgraded the stock to sell from neutral.
Arbor Realty Trust (ABR) fell more than -2% in pre-market trading after JPMorgan downgraded the stock to neutral from overweight.
C3 Ai Inc (AI) tumbled over -5% in pre-market trading after Wolfe Research downgraded the stock to underperform from peer perform.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Monday - April 24th
Coca-Cola (KO), Canadian National Railway (CNI), Cadence Design (CDNS), Ameriprise Financial (AMP), Nidec (NJDCY), Alexandria RE (ARE), Brown&Brown (BRO), Koninklijke Philips ADR (PHG), Santos (STOSF), Packaging America (PKG), Vivendi SA PK (VIVHY), Crown (CCK), Grupo Aeroportuario Sureste ADR (ASR), Cleveland-Cliffs (CLF), Whirlpool (WHR), Range Resources (RRC), Medpace Holdings (MEDP), AGNC Invest (AGNC), Hexcel (HXL), Tenable (TENB), Tenable (TENB), Simpson Manufacturing (SSD), ChampionX Corp (CHX), PotlatchDeltic (PCH), Cadence Bancorp (CADE), Credit Suisse ADR (CS), First Republic Bank (FRC), WSFS (WSFS), Bank of Hawaii (BOH), WesBanco (WSBC), Independent Bank Group (IBTX), Enterprise Financial (EFSC), Heartland Financial (HTLF), NBT Bancorp (NBTB), Bank of N.T. Butterfield Son (NTB), Helix (HLX), Hope Bancorp (HOPE), Nabors Industries (NBR), HealthStream (HSTM), KKR Real Estate (KREF), Dynex Capital (DX), Washington Trust (WASH), TrustCo Bank NY (TRST), TrueBlue (TBI), Heidrick&Struggles (HSII), Garrett Motion (GTX), Five Star Bancorp (FSBC), Bank of Marin (BMRC), HomeStreet (HMST), Aaron’s (AAN), Northeast Bancorp (NBN), RBB Bancorp (RBB), Sify (SIFY), Seven Hills Realty Trust (SEVN).
Sunday Scaries: What I'm Watching This Week In The Grain Markets
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