Headline News: The S&P 500 futures trade roughly in line with fair value in a meek start to the month following the beatdown in April. Growth concerns continue to linger after China’s April Manufacturing PMI (47.4) contracted more than expected and Beijing tightened COVID restrictions, but the market might be drawing support from new inflows on the first trading day of the month. The 3% markdown in oil prices ($101.63, -3.09, -3.0%) is reflecting reduced demand expectations. There might also be some hesitation about the FOMC’s policy decision on Wednesday, the vast amount of earnings news throughout the week, and key economic data starting with the April ISM Manufacturing Index (Briefing.com consensus 57.9%) at 10:00 a.m. ET and culminating with the April employment report on Friday. The Construction Spending report for March (Briefing.com consensus 0.8%) will be released concurrently with the ISM report, which will be preceded by the final IHS Markit Manufacturing PMI for April at 9:45 a.m. ET. The Treasury market has softened up this morning, pushing yields slightly higher. The 2-yr yield is up three basis points to 2.72%, and the 10-yr yield is up three basis points to 2.92%. The U.S. Dollar Index is up… Read More
Headline News: The S&P 500 futures trade 38 points, or 0.9%, below fair value as discouraging outlooks from Apple (AAPL 159.50, -4.14, -2.5%) and Amazon.com (AMZN 2617.40, -274.53, -9.7%) set the negative tone in the futures market. Apple’s quarterly results were better than expected, but the stock’s 2.5% decline is rooted in a warning that the impact from supply chain issues will be $4-8 billion in fiscal Q3, which is “substantially larger” than what it experienced during fiscal Q2. Amazon is down about 10% after guiding Q2 revenue and operating income below expectations. Intel (INTC 44.88, -1.96, -4.2%) and Chevron (CVX 159.46, -2.33, -1.4%) are also trading lower after the former issued downside Q2 guidance and the latter missed earnings expectations. Honeywell (HON 193.30, +3.38, +1.8%), however, is a notable earnings standout. At 8:30 a.m. ET, investors will receive another inflation update with the inclusion of PCE Prices in the Personal Income (Briefing.com consensus 0.4%) and Spending (Briefing.com consensus 0.6%) report for March and the release of the Q1 Employment Cost Index (Briefing.com consensus 1.1%). Afterwards, the Chicago PMI for April (Briefing.com consensus 62.0) will be available at 9:45 a.m. ET, followed by the final University of Michigan Index of… Read More
Headline News: The S&P 500 futures trade 70 points, or 1.7%, above fair value as positive reactions to earnings reports help drive the rebound-minded bias. The Nasdaq 100 futures outperform and trade 2.1% above fair value. Meta Platforms (FB 203.68, +28.73, +16.4%) is setting the tone with a 16% pre-market gain following its earnings report, followed by healthy gains in Qualcomm (QCOM 144.80, +9.70, +7.2%), McDonald’s (MCD 252.00, +4.86, +2.0%), and Merck (MRK 86.40, +1.99, +2.4%), among others. To be fair, there are always outliers like Teladoc (TDOC 32.40, -23.59, -42.1%), which has cratered over 40% on disappointing guidance. It appears, though, that the TDOC weakness is relatively contained rather than spreading to other growth stocks. In other developments, the Bank of Japan made no headline policy changes; Democrats are attempting to revive Build Back Better discussions, according to The Wall Street Journal; and OPEC+ is likely to agree to another 432,000-bpd oil output increase for June when it meets next week, according to Reuters. Regarding today’s data, investors will receive the advance estimate for Q1 GDP (Briefing.com consensus 1.1%) and the weekly Initial Claims (Briefing.com consensus 182,000) and Continuing Claims report at 8:30 a.m. ET. U.S. Treasuries trade… Read More
Headline News: The S&P 500 futures trade nine points, or 0.2%, below fair value following yesterday’s unprovoked rebound. Investors have been busy reviewing a huge batch of earnings reports. First-quarter results remained mostly better than expected, including from 3M (MMM 149.75, +1.15, +0.8%), UPS (UPS 193.79, +4.15, +2.2%), General Electric (GE 86.79, -3.09, -3.4%), and PepsiCo (PEP 174.27, +0.53, +0.3%). Note, GE is trading lower after saying it expects full-year earnings to be at the low end of its previous guidance range. Growth concerns remain in the mix after Beijing initiated a massive COVID-19 testing campaign, stirring lockdown fears; and Russian Foreign Minister Lavrov, according to Bloomberg, warned western countries that there is a “considerable” chance of nuclear war if weapon deliveries to Ukraine continue. Treasury yields are down for the second straight day. The 2- yr yield is down four basis points to 2.59%, and the 10-yr yield is down four basis points to 2.79%. The U.S. Dollar Index is up 0.1% to 101.90. WTI crude futures are up 0.8% to $99.32/bbl. (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 moved below support at 4222.62 but rallied later to close higher at 4296.12. The volume… Read More
Headline News: The S&P 500 futures are limping into week’s end, trading two points, or 0.1%, below fair value. The market continues to digest hawkish Fed expectations, higher interest rates, stubborn technical factors, and the latest earnings news. Dow components American Express (AXP 183.85, -1.89, -1.0%) and Verizon (VZ 54.15, -0.86, -1.6%) are both trading lower following their underwhelming earnings reports, while Snap (SNAP 29.53, +0.11, +0.4%) shares have been extremely volatile after the company missed EPS estimates and guided Q2 revenue below consensus. In the Treasury market, the 10-yr yield hit 2.97% last evening following Fed Chair Powell’s hawkish-sounding commentary earlier on Thursday. The benchmark yield has backed off those highs and currently sits unchanged at 2.92%. The 2-yr yield is up four basis points to 2.73%. The U.S. Dollar Index, meanwhile, remains above the 100.00 level (100.85, +0.27, +0.3%) while WTI crude futures remain above $100.00/bbl ($102.66, -1.13, -1.1%). (Michael Gibbs, Director of Equity Portfolio & Technical Strategy) Markets: The S&P 500 moved above the critical 200-day moving average early, but the index sold off and closed at 4393.66 below support at the 50-day moving average. RSI moved lower, closing at 45.03 in support of the selling, and the… Read More
Headline News: The S&P 500 futures are back on the rise and trade 42 points, or 0.9%, above fair value with earnings news taking the headlines. The Nasdaq 100 futures trade 1.3% above fair value after dropping 1.5% yesterday. The growth stocks seemed to have gotten over the Netflix (NFLX 219.70, -6.49, -2.9%) disappointment yesterday after Tesla (TSLA 1049.00, +71.80, +7.4%) exceeded earnings expectations and reiterated its growth expectations. TSLA shares are up 7% in pre-market action. The airline stocks, meanwhile, continue to fly higher after American (AAL 21.56, +2.08, +10.7%), United (UAL 50.45, +3.93, +8.5%), and Alaska Air (ALK 61.61, +2.92, +5.0%) reported encouraging results and/or provided upbeat revenue expectations. A contrarian mindset might also be driving the futures market higher with investor sentiment having gotten too bearish in recent weeks. That could explain why AT&T (T 19.70, +0.27, +1.4%) is trading higher despite missing EPS estimates or why the uptick in Treasury yields hasn’t bothered the market. The 2-yr yield is up four basis points to 2.61%, and the 10-yr yield is up three basis points to 2.87%. The U.S. Dollar Index is down 0.2% to 100.24. WTI crude futures are up 0.9% to $103.10/bbl. On the data… Read More
Headline News: The S&P 500 futures trade four points, or 0.1%, above fair value as investors continue to show a lack of conviction. Buying interest has been restrained by a lackluster response to earnings news, hawkish-sounding Fed commentary, and upwards pressure in long-term interest rates. Starting with earnings, Dow components Johnson & Johnson (JNJ 176.95, -0.71, -0.4%) and Travelers (TRV 181.75, -3.47, -1.9%) are both trading lower in pre-market action despite beating EPS estimates, but to be fair, JNJ also lowered its FY22 EPS guidance below consensus. In Fedspeak, St. Louis Fed President Bullard (FOMC voter) said in a speech yesterday that he wants rates to go to 3.5% by the end of the year and that the Fed shouldn’t rule out the use of 75-basis-point rate increases, according to Bloomberg. As a reminder, the Fed’s next policy meeting is in two weeks. The 10-yr Treasury note yield continues to head toward 3.00%, topping 2.90% overnight. Right now, the benchmark yield is up three basis points to 2.89%, while the 2-yr yield trades unchanged at 2.47%. The U.S. Dollar Index is up 0.1% to 100.92. WTI crude futures are down 1.2%, or $1.34, to $106.87/bbl. (Michael Gibbs, Director of Equity… Read More
Headline News: The S&P 500 futures trade roughly in-line with fair value in a busy news morning before the market closes for Good Friday tomorrow. Starting with earnings news, UnitedHealth (UNH 539.80, +2.80, +0.5%) and Goldman Sachs (GS 328.68, +6.71, +2.1%) each beat top and bottom-line estimates, while Wells Fargo (WFC 46.88, -1.66, -3.4%) trades lower by 3% after missing revenue estimates. Twitter (TWTR 49.09, +3.22, +7.0%), meanwhile, is up 7% after Elon Musk offered to acquire the company for $54.20 per share in cash. Twitter said it will carefully review the proposal, which is Mr. Musk’s “best and final offer.” Elsewhere, the European Central Bank made no changes to interest rates, as expected, and said incoming data since its last meeting reinforced expectations for net asset purchases under the APP should be concluded in the third quarter. In economic data, Retail Sales for March (Briefing.com consensus 0.6%), weekly Initial Claims (Briefing.com consensus 175,000), and Import and Export Prices for March will be released at 8:30 a.m. ET, followed by the preliminary University of Michigan Index of Consumer Sentiment for April (Briefing.com consensus 58.8) and Business Inventories for February (Briefing.com consensus 1.3%) at 10:00 a.m. ET. U.S. Treasuries are… Read More
Headline News: The S&P 500 futures trade 21 points, or 0.5%, above fair value as the Q1 earnings reporting season begins in earnest following a rough patch in the market. JPMorgan Chase (JPM 130.00, -1.54, -1.2%) is continuing that rough patch after missing EPS estimates, while BlackRock (BLK 719.00, +2.17, +0.3%) and First Republic Bank (FRC 155.73, +0.68, +0.4%) are up modestly in pre-market action after beating EPS estimates. On the economy, JPMorgan CEO Jamie Dimon remained optimistic from a short-term perspective, but he cautioned that he sees significant geopolitical and economic challenges ahead due to high inflation, supply chain issues, and the war in Ukraine. Delta Air Lines (DAL 40.97, +2.35, +6.1%) CEO corroborated Mr. Dimon’s short-term optimism with an observation that March 2022’s historic bookings quarter is continuing into April. DAL shares are up 6% after the company beat top and bottom-line estimates. In economic data, investors will receive the Producer Price Index for March (Briefing.com consensus 1.2%) at 8:30 a.m. ET. Earlier, the weekly MBA Mortgage Applications Index decreased 1.3% following a 6.3% decline in the prior week. U.S. Treasuries trade little changed. The 2-yr yield is unchanged at 2.39%, and the 10-yr yield is unchanged at… Read More
Headline News: The S&P 500 futures trade 11 points, or 0.3%, above fair value while Treasury yields hold steady in front of the Consumer Price Index for March at 8:30 a.m. ET. The Briefing.com consensus is projecting another hot inflation report with a 1.2% m/m increase in total CPI that pushes the yr/yr rate to 8.4%. That should keep expectations elevated for the Fed to issue a 50-basis-point rate hike next month, as Fed officials have been suggesting could be the case. Earlier, the NFIB Small Business Optimism Index for March decreased to 93.2 from 95.7 in February, and later, the Treasury Budget for March will be released at 2:00 p.m. ET. The 2-yr yield is up one basis point to 2.51%, and the 10-yr yield is unchanged at 2.78%. The U.S. Dollar Index is up for the ninth straight session, topping the 100.00 level (100.14, +0.23, +0.2%), while WTI crude futures are rebounding 4.1%, or $3.89, to $98.17/bbl. Separately, shares of Cisco (CSCO 51.63, -1.25, -2.4%) are down 2% in pre-market action after Citigroup downgraded the Dow component to Sell from Neutral. CarMax (KMX 99.50, -3.67, -3.6%) and Albertsons (ACI 33.50, -1.28, -3.7%) are down sharply following their earnings… Read More
