Stock Indexes Give Up Morning Gains And Are Now In The Red

What you need to know…

After opening up higher, U.S. stock indexes are trading moderately lower this afternoon.  The S&P 500 Index ($SPX) (SPY) today is down -0.42%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.35%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.45%.

The 10-year T-note yield is down -5.0 bp to 3.936%.

U.S. weekly initial unemployment claims rose +21,000 to a 2-1/4 month high of 211,000, showing a weaker labor market than expectations of 195,000.  Also, weekly continuing claims rose +69,000 to a 2-1/2 month high of 1.718 million, showing a weaker labor market than expectations of 1.660 million.

General Electric is up more than +6% after giving a bullish forecast for the year. Also, Dish Network is up more than +3% after the U.S. International Trade Commission said that it proved that Peloton Interactive and IFit Inc infringed on some of its streaming patents, which could push the companies into licensing deals with Dish Network. 

On the negative side, SVB Financial is down more than -40% after the company announced the sale of $21 billion of securities, resulting in a Q1 after-tax loss of about $1.8 billion. Also, JD.com is down more than -10% after reporting Q4 net revenue that was below consensus.    In addition, Etsy is down more than -6% after Jeffries double-downgraded the stock to underperform from buy.

Bitcoin (^BTCUSD) is down more than -1% to a 3-week low today after Silvergate Capital said it plans to wind down operations and liquidate its bank. Silvergate collapsed amid scrutiny from regulators and a criminal investigation by the Justice Department's fraud unit into dealings with FTX and Alameda Research.  Silvergate Capital is down more than -31%, and other crypto-related stocks slumped on the news. 

Overseas stock markets are mixed.  The Euro Stoxx 50 today is up +0.18%.  China’s Shanghai Composite stock index closed down -0.22%, and Japan’s Nikkei Stock Index closed up +0.63%. 

Today’s stock movers…

General Electric (GE) is up more than +6% to lead gainers in the S&P 500 after CEO Culp said sales at its combined power-equipment and renewable energy units are expected to grow at a mid-single-digit rate with high single-digit profit margins this year.  Also, its aviation division should see revenue growth at a high mid- to high-single-digit rate and generate free cash flow “in line with net income” over the same period. 

A decline in bond yields today is boosting chip stocks.  Intel (INTC) is up more than +3% to lead gainers in the Nasdaq 100.  Also, Advanced Micro Devices (AMD), Lam Research (LRCX), Applied Materials (AMAT), NXP Semiconductors NV (NXPI), Broadcom (AVGO), Microchip Technology (MCHP), and KLA Corp (KLAC) are up more than +1%. 

Dish Network (DISH) is up more than +4% after the U.S. International Trade Commission said that Dish Network proved that Peloton Interactive and IFit Inc infringed on some of its streaming patents, which Bloomberg Intelligence said will push the companies into “inevitable” licensing deals with Dish Network by May.  

CH Robinson Worldwide (CHRW) is up more than +2% after Reuters reported that the company is in advanced talks with former UPS COO Barber to become CH Robinson’s new CEO.

Phillips 66 (PSX) is up more than +3% after UBS initiated coverage of the stock with a buy recommendation.

American Express (AXP) approved the repurchase of up to 120 million common shares and announced an increase in its quarterly dividend by 8 cents to 60 cents per share. 

BJ’s Wholesale Club Holdings (BJ) is up more than +4% after reporting Q4 revenue of $4.93 billion, stronger than the consensus of $4.81 billion.

Exact Sciences (EXAS) is up more than +4% after Citigroup upgraded the stock to buy from neutral with a price target of $90.

SVB Financial (SIVB) is down more than -40% to lead losers in the S&P 500 after the company announced the sale of $21 billion of securities, resulting in a Q1 after-tax loss of about $1.8 billion.

Bank stocks are under pressure today and are weighing on the overall market.  First Republic Bank/Ca (FRC) is down more than -13%, and Zions Bancorp (ZION) is down more than -6%.  Also, Signature Bank of New York (SBNY) is down more than -5%, and Northern Trust (NTRS) is down more than -3%.  In addition, Wells Fargo (WFC), Bank of America (BAC), Comerica (CMA), US Bancorp (USB), and M&T Bank (MTB) are down more than -2%.  Finally, JPMorgan Chase (JPM) is down more than -1% to lead losers in the Dow Jones Industrials. 

Etsy (ETSY) is down more than -3% after Jeffries double-downgraded the stock to underperform from buy. 

JD.com (JD) is down more than -10% to lead losers in the Nasdaq 100 after reporting Q4 net revenue of 295.45 billion yuan, below the consensus of 295.51 billion yuan

Silvergate Capital (SI) is down more than -31% after it said it plans to wind down its operations and liquidate its bank following turmoil in the crypto industry. 

Across the markets…

June 10-year T-notes (ZNM23) today are up +5 ticks, and the 10-year T-note yield is down -2.0 bp at 3.972%.  June 10-year T-notes this morning are moderately higher after weekly U.S jobless claims rose more than expected, which eases concern the Fed will tighten monetary policy more aggressively.  Further strength in T-notes may be limited today by supply pressures as the Treasury will auction $18 billion of reopened 30-year T-bonds this afternoon as it concludes this week’s $90 billion auction package of T-note and T-bonds.

The dollar index (DXY00) today is down by -0.28%.  This morning’s economic news that showed U.S. weekly initial unemployment claims rose more than expected pushed T-note yields lower and is weighing on the dollar.  Also, the strength in stocks today has reduced the liquidity demand for the dollar. 

EUR/USD (^EURUSD) today is up by +0.29%.  Dollar weakness today has sparked some short covering in EUR/USD.   Also, higher European government bond yields today have strengthened the euro’s interest rate differentials and support the euro. 

USD/JPY (^USDJPY) today is down by -0.89%.  The yen today is moving higher on short-covering ahead of the results of the 2-day BOJ meeting on Friday.  The consensus is for no change in BOJ policy, but Goldman Sachs and BNP Paribas are among the minority, citing the risk that BOJ Governor Kuroda may surprise the markets at his last meeting as the head of the BOJ.  A decline in T-note yields today is also bullish for the yen. 

Japan’s economic news today was bearish for the yen.  Japan Q4 GDP was unexpectedly revised downward to +0.1% (q/q annualized) from the initially reported +0.6% q/q, weaker than expectations of an upward revision to +0.8% q/q.  Also, Feb machine tool orders fell -10.7% y/y, the biggest decline in nearly 2-1/2 years.

April gold (GCJ3) this morning is up +14.0 (+0.77%), and May silver (SIK23) is up +0.129 (+0.64%).  Precious metals prices this morning are moderately higher.  Dollar weakness today is pushing metals prices higher.  Also, lower T-note yields are supportive of metals.  In addition, metals found support from the larger-than-expected increase in today’s U.S. weekly jobless claims report, which eases expectations the Fed will keep aggressively hiking interest rates.  The continued liquidation of long gold positions in ETFs is bearish for gold prices after holdings of gold in ETFs fell to a new 2-3/4 year low Tuesday. 

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