Markets Today: Stock Indexes Move Higher as Market Sentiment Improves

Morning Markets

March S&P 500 futures (ESM23) this morning are up +0.57% at a 3-week high, and March Nasdaq 100 E-Mini futures (NQM23) are up +0.63% at a 1-week high.

U.S. stock index futures this morning are moderately higher as a further easing of the banking turmoil boosts market sentiment.  U.S. stock index futures have carry-over support from a rally in European bank stocks after ECB Executive Board member Schnabel said that Eurozone banks had not seen a loss of deposits despite the recent financial stability concerns.

Stock index futures fell back from their best levels after this morning’s U.S. economic news showed weekly jobless claims rose more than expected, and Q4 GDP was revised downward.

Global bond yields are moving higher today on an upward revision to the U.S. Q4 core PCE deflator and the stronger-than-expected German Mar CPI report.  The 10-year T-note yield is up +2.3 bp at 3.587%.  Also, the 10-year German bund yield climbed to a 1-week high of 2.384%, and the 10-year UK gilt yield rose to a 1-week high of 3.518%. 

U.S. Q4 GDP was revised slightly lower to 2.6% (q/q annualized) from +2.7% as Q4 personal consumption was revised down to +1.0% from +1.4%.  Also, the Q4 core PCE deflator was revised upward by +0.1 point to 4.4% from 4.3%

U.S. weekly initial unemployment claims rose +7,000 to 198,000, showing a slightly weaker labor market than expectations of 196,000.

Overseas stock markets are mixed.  The Euro Stoxx 50 today is up +1.23%.  China’s Shanghai Composite stock index closed up +0.65%, and Japan’s Nikkei Stock Index closed down -0.36%. 

The Euro Stoxx 50 index today rallied to a 3-week high and is modestly higher.  Banking fears subsided and gave European bank stocks a boost today following positive comments from an ECB official, while a decline in German and Spanish inflation boosted market sentiment.  ECB Executive Board member Schnabel said that Eurozone banks had not seen a loss of deposits despite the recent financial stability concerns.  Germany Mar CPI (EU harmonized) eased to +7.8% y/y from +9.3% y/y in Feb, the weakest report in 11 months, and Spain Mar CPI (EU harmonized) eased to a 20-month low of +3.1% y/y from +6.0% y/y in Feb.  European retailers also rallied today, led by a +14% jump in Hennes & Mauritz AB, after the company reported a surprise profit in Q1. 

Eurozone Mar economic confidence unexpectedly fell -0.3 to 99.3, weaker than expectations of an increase to 100.0.

ECB Executive Board member Schnabel said that Eurozone banks have not seen a loss of deposits despite the recent financial stability concerns, and "for now, the banking sector looks rather resilient."

Germany’s Mar CPI (EU harmonized) eased to +7.8% y/y from +9.3% y/y in Feb, but was still above expectations of +7.5% y/y.

Spain’s Mar CPI (EU harmonized) eased to +3.1% y/y from +6.0% y/y in Feb, the slowest pace of increase in 20 months.

China’s Shanghai Composite today recovered from a 2-week low and closed moderately higher.  Chinese stocks moved higher today as market sentiment improved after Chinese Premier Li Qiang said China would be able to meet its development targets for this year as the country makes efforts to stimulate consumption and investment.  Technology stocks gained amid optimism in the sector following Alibaba Group Holding’s plans to separate into six units.

Chinese bank stocks also rallied on better-than-expected earnings results.  Bank of Communications, one of China’s biggest state-owned banks, reported 2022 net income rose +5.2% y/y to 92.1 billion yuan ($13.4 billion), above the consensus of 91.1 billion yuan.  Also, China Construction Bank reported 2022 net income rose +7.1% to 323.9 billion yuan ($47 billion), better than the consensus of 318.6 billion yuan. 

Japan’s Nikkei Stock Index today closed moderately lower. Japanese stocks moved lower today mainly due to ex-dividend trading.  Today was the ex-dividend date for some 1,500 Japanese stocks.  Losses in the overall market were limited as an improved outlook sparked a rally in Japanese semiconductor stocks today after Intel said Wednesday that it would launch new server chips sooner than expected. 

Pre-Market U.S. Stock Movers

Walmart (WMT) gained more than +1% in pre-market trading after Evercore ISI upgraded the stock to outperform from inline.

Sprinklr (CXM) surged more than +13% in pre-market trading after reporting Q4 subscription revenue of $148.3 million, better than the consensus of $145.7 million and forecast 2024 subscription revenue of $644 million-$648 million, above the consensus of $635.5 million.

Kohl’s (KSS) jumped more than +4% in pre-market trading on signs of insider buying after an SEC filing showed CEO Kingsbury bought $2.02 million of his company’s shares on March 29.

Juniper Networks (JNPR) climbed more than +2% in pre-market trading after Evercore ISI upgraded the stock to outperform from neutral.

Phillip Morris International (PM) rose more than +1% in pre-market trading after JPMorgan Chase upgraded the stock to overweight from neutral.

Neurocrine Biosciences (NBIX) climbed more than +2% in pre-market trading after Canaccord Genuity upgraded the stock to buy from hold with a price target of $132.

RH (RH) tumbled more than -8% in pre-market trading after reporting Q4 net revenue of $772.5 million, weaker than the consensus of $785.3 million, and forecasting 2024 net revenue of $2.9 billion-$3.1 billion, below the consensus of $3.48 billion.

Semtech (SMTC) sank more than -12% in pre-market trading after forecasting an adjusted Q1 net loss of -4 cents to -11 cents, well below the consensus for a gain of 43 cents EPS.

Charles Schwab (SCHW) is down more than -1% in pre-market trading after Morgan Stanley downgraded the stock to equal weight from overweight.

Viking Therapeutics (VKTX) dropped more than -3% in pre-market trading after launching a $250 million share offering at $14.50 per share via William Blair and Raymond James.

Hormel Foods (HRL) slid more than -1% in pre-market trading after Argus Research downgraded the stock to hold from buy.

Today’s U.S. Earnings Reports (3/30/2023)

Aerovate Therapeutics Inc (AVTE), Altus Power Inc (AMPS), AN2 Therapeutics Inc (ANTX), AngioDynamics Inc (ANGO), Astra Space Inc (ASTR), Canoo Inc (GOEV), Cerberus Cyber Sentinel Corp (CISO), Cryptyde Inc (TYDE), EVgo Inc (EVGO), Icosavax Inc (ICVX), IGM Biosciences Inc (IGMS), IonQ Inc (IONQ), Li-Cycle Holdings Corp (LICY), MarketWise Inc (MKTW), Neogen Corp (NEOG), OmniAb Inc (OABI), P3 Health Partners Inc (PIII), Skillz Inc (SKLZ), Tattooed Chef Inc (TTCF), Terawulf Inc (WULF), Thorne HealthTech Inc (THRN), VAALCO Energy Inc (EGY), Vintage Wine Estates Inc (VWE), Y-mAbs Therapeutics Inc (YMAB).

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