What you need to know…
The S&P 500 Index ($SPX) (SPY) today is down -0.24%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.13%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.84%.
U.S. stock indexes this morning are mixed, with the Nasdaq 100 falling to a 1-week low. Higher T-note yields today are undercutting technology stocks. However, bank stocks are steady to slightly higher as hopes of more support from U.S. authorities lifted sentiment toward the banking sector. Also, a rally in WTI crude oil to a 2-week high today boosts energy stocks.
Today’s U.S. economic news was mixed for stocks. On the negative side, Feb wholesale inventories unexpectedly rose +0.2% m/m versus expectations of a -0.2% m/m decline. Also, Feb retail inventories rose +0.8% m/m, more than expectations of +0.2% m/m and the largest increase in 6 months. The inventory build is bearish for stocks since companies may need to cut back on production due to the higher unsold stocks.
On the positive side for stocks, the Conference Board’s March U.S. consumer confidence index unexpectedly rose +0.8 to 104.2, stronger than expectations of a decline to 101.0. Also, the March Richmond Fed manufacturing survey index rose +11 to -5, stronger than expectations of -10.
Global bond yields are higher today on reduced fears about the banking sector. The 10-year T-note yield is up 2.8 bp at 3.558%. Also, the 10-year German bund yield is up +6.9 bp at 2.296%, and the 10-year UK gilt yield is up +9.9 bp at 3.465%.
Overseas stock markets are mixed. The Euro Stoxx 50 today is down -0.09%. China’s Shanghai Composite stock index closed down -0.19% and Japan’s Nikkei Stock Index closed up +0.15%.
Today’s stock movers…
Chip stocks are under pressure today on some consolidation after their recent sharp gains. The Philadelphia Semiconductor Index is up +22% so far this year. Seagate Technology Holdings (STX) is down more than -2% to lead losers in the S&P 500. Also, Marvell Technology (MRVL) is down more than -2% to lead losers in the Nasdaq 100. In addition, Advance Micro Devices (AMD) and Micron Technology (MU) are down more than -2%. Intel (INTC) is down more than -1% to lead losers in the Dow Jones Industrials
Invesco Mortgage (IVR) is down more than -4% after cutting its cash dividend to 40 cents per share from 65 cents per share to “retain capital.”
Williams Cos (WMB) is down nearly -1% after Truist Securities downgraded the stock to hold from buy.
McCormick (MKC) is up more than +10% to lead gainers in the S&P 500 after reporting Q4 adjusted EPS of 59 cents, better than the consensus of 49 cents, and forecast full-year adjusted EPS of $2.56-$2.61, the midpoint above the consensus of $2.57.
Carnival (CCL) is up more than +6% after Wells Fargo Securities upgraded the stock to equal weight from underweight, citing low near-term refinancing risk. Other cruise line operators also rallied on the upgrade, with Royal Caribbean Cruises (RCL) and Norwegian Cruise Line Holdings (NCLH) up more than +2%.
Paramount Global (PARA) is up more than +5% after Bank of America upgraded the stock to buy from neutral.
Energy stocks and energy service providers are climbing, with WTI crude oil extending Monday’s advance to a 2-week high. Phillips 66 (PSX), Haliburton (HAL), and Valero Energy (VLO) are up more than +2%. Schlumberger (SLB), Marathon Oil (MRO), Diamondback Energy (FANG), and Marathon Petroleum (MPC) are up more than +1%.
Walgreens Boots Alliance (WBA) is up more than +2% to lead gainers in the Dow Jones Industrials and Nasdaq 100 after reporting Q2 sales of $24.86 billion, better than the consensus of $33.57 billion.
Occidental Petroleum (OXY) is up more than +2% after a regulatory filing showed top holder Berkshire Hathaway bought 3.7 million common shares of the stock from March 23 to March 27.
PVH (PVH) is up more than +19% after reporting Q4 revenue of $2.49 billion, stronger than the consensus of $2.36 billion, and forecasting 2024 revenue to increase 3%-4% compared to 2%-3% in 2022.
Ciena Corp (CIEN) is up more than +5% after Raymond James upgraded the stock to strong buy from outperform.
Across the markets…
June 10-year T-notes (ZNM23) today are down -8 ticks, and the 10-year T-note yield is up +2.8 bp at 3.558%. June T-notes are under pressure today as banking-sector contagion concerns eased and curbed safe-haven demand for government debt. Also, supply pressures are weighing on T-note prices as the Treasury will auction $43 billion of 5-year T-note today as part of this week’s $142 billion auction package of T-notes and floating-rate notes.
The dollar index (DXY00) today is down by -0.26%. The dollar is falling back today as an easing of banking-sector contagion concerns has reduced the liquidity demand for the dollar. However, losses in the dollar were limited after March U.S. consumer confidence unexpectedly rose.
EUR/USD (^EURUSD) today is up by +0.24%. The euro today is climbing on hawkish ECB comments and better-than-expected Eurozone economic news.
ECB Governing Council member Muller said, "with inflation risks still skewed to the upside, there's probably room to raise interest rates."
Italy’s March consumer confidence index unexpectedly rose +1.1 to a 13-month high of 105.1, stronger than expectations of no change at 104.0.
USD/JPY (^USDJPY) today is down by -0.44%. The yen is climbing today after Japan's cabinet approved the use of 2.2 trillion yen of reserve funds from the fiscal 2022 budget for measures to cushion the impact of inflation. The yen is also climbing as Japanese companies repatriate yen ahead of their fiscal- year end at the end of March.
April gold (GCJ3) this morning is up +10.7 (+0.55%), and May silver (SIK23) is up +0.140 (+0.60%). Precious metals prices this morning are moderately higher due to a weaker dollar. Also, the weakness in stocks today is boosting some safe-haven demand for precious metals. In addition, the recent banking turmoil has sparked fund buying of gold as gold holdings in exchange-traded funds (ETFs) rose to a 6-week high last Friday. However, higher global bond yields today are limiting gains in metals prices.
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.
