Markets Today: Stock Indexes Fall on Weakness in Tech Stocks

Morning Markets

June S&P 500 futures (ESM23) this morning are down -0.79%, and June Nasdaq 100 E-Mini futures (NQM23) are down -0.95%.

U.S. stock index futures this morning are moderately lower, led by losses in technology stocks. Apple is down more than -1% in pre-market trading after its personal computer shipments in Q1 plunged by -40.5% y/y. Tesla is also down more than -1% after it cut its vehicle prices in the U.S. for the second time this year.   Trading activity is light today, with markets across Europe, Australia, and Hong Kong closed for the Easter holidays.

Stock index futures are also under pressure from last Friday’s stronger-than-expected U.S. payrolls report that bolstered expectations for another Fed rate increase at the May 2-3 FOMC meeting. 

U.S. Mar nonfarm payrolls rose +236,000, stronger than expectations of +230,000.  The Mar unemployment rate unexpectedly fell -0.1 to 3.5%, showing a stronger labor market than expectations of no change at 3.6%.

U.S. Mar average hourly earnings eased to 4.2% y/y from 4.6% y/y in Feb, weaker than expectations of 4.3% and the slowest pace of increase in 1-3/4 years.

A quarterly report from the International Data Corporation (IDC) showed global shipments of personal computers (PCs) in Q1 fell -29% y/y to 56.9 million, below levels of early 2019 before the pandemic.   Apple led the losses, with its Q1 PC shipments falling -40.5% y/y.

On the positive side for stocks, Pioneer Natural Resources is up more than +9% in pre-market trading after the Wall Street Journal reported that Exxon Mobil had held preliminary talks over a possible acquisition of the company.  Also, Micron Technology is up more than +6% after rival Samsung Electronics said it would cut memory chip production last Friday.  In addition, Charles Schwab is up more than +2% after it reported that it took in $53 billion in net new client assets in March.

The 10-year T-note yield is up +4.6 bp at 3.351% from last Thursday following the stronger-than-expected U.S. March payroll report last Friday.

Overseas stock markets are mixed.  The Euro Stoxx 50 is closed today for the Easter Monday holiday. China’s Shanghai Composite closed down -0.37%, and Japan’s Nikkei Stock Index closed up +0.42%. 

The Euro Stoxx 50 index is closed today for the Easter Monday holiday. 

Late Friday, ECB Governing Council member Knot said, "We are certainly not done with interest rate hikes.  Core inflation in the Eurozone is now almost 6%, and you can't fight that with an interest rate of 3%.”

China’s Shanghai Composite Stock Index fell back from a 1-month high and closed moderately lower. Chinese stocks relinquished early gains today and moved lower as companies related to artificial intelligence (AI) retreated after a commentary in the state-run Economic Daily said the ChatGPT concept sector has “signs of a valuation bubble,” with many companies have made little progress in developing the technology.  Chinese stocks initially moved higher Monday, led by a rally in machine visualization and AI stocks, buoyed by the news that Meta Platforms released a computer vision model and that Chinese technology companies are slated to introduce their own challenger to ChatGPT in the coming week.  Chinese automakers also rose on today’s report that showed China Mar retail passenger vehicle sales and production increased.

China Mar passenger vehicle sales rose +14.3% m/m and +0.3% y/y to 1.59 million units.  Also, China's Mar passenger vehicle output rose +24.9% m/m and +13.8% y/y to 2.08 million units. 

Japan’s Nikkei Stock Index today closed moderately higher. Gains in Japanese technology stocks led the overall market higher, with Nintendo climbing more than +3% after the Super Mario Bros. Movie marked the biggest opening weekend for a film so far this year.   An improvement in market sentiment also boosted Japanese stocks after the Japan Mar consumer confidence index rose more than expected to a 13-month high, and the Japan Mar eco watchers outlook survey rose more than expected to a 16-month high.  The Japanese yen came under pressure today after BOJ Governor Ueda said it's “appropriate” for the BOJ to continue with its yield-curve control framework.

The Japan Mar consumer confidence index rose +2.6 to a 13-month high of 33.9, stronger than expectations of 31.5.

The Japan Mar eco watchers outlook survey rose +3.1 to a 16-month high of 54.1, stronger than expectations of 50.9.

Pre-Market U.S. Stock Movers

Apple (AAPL) slid more than -1% in pre-market trading after a report from the International Data Corporation (IDC) showed Apple’s Q1 PC shipments fell -40.5% y/y. 

Tesla (TSLA) fell more than -1% in pre-market trading after it cut prices on all of its vehicles in the U.S. for the second time this year. 

Paychex (PAYX) fell more than -1% in pre-market trading after Stifel downgraded the stock to sell from hold.

Capital One Financial (COF) dropped more than -4% in pre-market trading after it said Walmart seeks to end its credit card program with them. 

Block (SQ) slid more than -1% in pre-market trading after Keefe.  Bruyette & Woods downgraded the stock to market perform from outperform. 

AudioCodes (AUDC) tumbled more than -12% in pre-market trading after it said it expects Q1 revenue to be in the range of $58.5 million-$60 million, down -10% to -12% y/y. 

Micron Technology (MU) jumped more than +6% in pre-market trading after rival Samsung Electronics said it would cut memory chip production last Friday.

Pioneer Natural Resources (PXD) rallied more than +9% in pre-market trading after the Wall Street Journal reported that Exxon Mobil had held preliminary talks over a possible acquisition of the company.

Charles Schwab (SCHW) climbed more than +2% in pre-market trading after it reported that it took in $53 billion in net new client assets in March.

Moderna (MRNA) rose more than +2% in pre-market trading after it said its Moderna/Merck drug combination for treating patients with high-risk stage 3 or 4 melanoma received prime designation from the European Medicines Agency. 

Today’s U.S. Earnings Reports (4/10/2023)

Chase Corp (CCF), DXP Enterprises Inc/TX (DXPE), Greenbrier Cos Inc/The (GBX), Nurix Therapeutics Inc (NRIX), PriceSmart Inc (PSMT).

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