Morning Markets
June S&P 500 futures (ESM23) this morning are up +0.05%, and June Nasdaq 100 E-Mini futures (NQM23) are down -0.08%.
U.S. stock index futures this morning are mixed. The markets are awaiting Wednesday’s U.S. consumer price report for March to see if the Fed will need to keep raising interest rates. The consensus is for Wednesday’s Mar core CPI (ex-food and energy) to edge up to +5.6% y/y from February’s +5.5% y/y gain.
Stocks are also awaiting Q1 earnings reporting season, which kicks off this Friday with earnings results from big U.S. banks, including Citigroup, JPMorgan Chase, and Wells Fargo.
A large short position in equity futures could add fuel to any short-covering rally. Last Friday’s weekly Commitment of Traders (COT) data showed that large speculators, mostly hedge funds, boosted their net-short positions in S&P 500 E-mini futures by 96,803 to an 11-year high of 321,459 positions in the week ended April 4.
On the positive side for stocks, CarMax jumped more than +7% in pre-market trading after reporting stronger-than-expected Q4 EPS. Also, cryptocurrency-exposed stocks are climbing, with the price of Bitcoin up more than +3% at a 10-month high.
On the negative side, Moderna dropped more than -7% in pre-market trading after it said a final stage study of its RNA flu shot hadn’t accumulated enough data to determine efficacy. Also, ADTRAN Holdings fell more than -10% after it forecasted preliminary Q1 revenue that was below consensus.
Global bond yields are mixed. The 10-year T-note yield is down -2.1 bp at 3.396%. The 10-year German bund yield is up +7.4 bp at 2.257%, and the 10-year UK gilt yield is up +8.5 bp at 3.517%.
Overseas stock markets are mixed. The Euro Stoxx 50 is up +0.46%. China’s Shanghai Composite closed down -0.05%, and Japan’s Nikkei Stock Index closed up +1.05%.
The Euro Stoxx 50 index today is moderately higher. Gains in mining stocks and automakers are leading the overall market higher, while more defensive sectors, like healthcare and consumer staples, are lagging after outperforming in recent weeks. Today’s economic news shows that market sentiment has improved as the Eurozone Apr Sentix investor confidence rose more than expected. Shares of European chipmakers rose today following last Friday’s news from Samsung Electronics that it is cutting memory chip production after reporting its slimmest profit since 2009. However, limiting the upside in European stocks is concern that higher interest rates and persistent price pressures will slow the economy and undercut corporate earnings.
Eurozone Feb retail sales fell -0.8% m/m, right on expectations.
Eurozone Apr Sentix investor confidence rose +2.4 to -8.7, stronger than expectations of -10.1.
China’s Shanghai Composite Stock Index today closed slightly lower. Weakness in Chinese artificial intelligence (AI) firms weighed on the overall market after China’s internet regulator said it plans to require a security review of generative AI services before the AI companies are allowed to operate. Losses were limited as Chinese semiconductor makers rallied as the AI chatbot introduced by SenseTime bolstered expectations the tech race will heat up and boost demand for semiconductor chips. Also, easing price pressures and expanding credit growth in China boosted the market after today’s economic news showed that Chinese consumer prices rose less than expected, and credit growth expanded more than expected.
China Mar CPI rose +0.7% y/y, weaker than expectations of+1.0% y/y and the smallest increase in 1-1/2 years. China Mar PPI fell -2.5% y/y, right on expectations and the largest decline in 2-1/2 years.
China Mar aggregate financing, the broadest measure of credit growth, rose +5.38 trillion yuan, stronger than expectations of +4.50 trillion yuan. China Mar new yuan loans rose +3.89 trillion yuan, stronger than expectations of +3.30 trillion yuan.
Japan’s Nikkei Stock Index today closed moderately higher. Japanese stocks gained after the Nikkei reported that billionaire investor Warren Buffet is looking to increase his exposure to Japanese stocks, which may encourage other foreign investors to invest in Japanese stocks. Also, Monday’s comments from BOJ Governor Ueda gave equities a lift when he said yield curve control and negative interest rates are appropriate amid the current economy.
Japan Mar machine tool orders fell -15.2% y/y, the third consecutive monthly drop and the largest decline in 2-1/2 years.
Pre-Market U.S. Stock Movers
CarMax (KMX) jumped more than +7% in pre-market trading after reporting Q4 EPS of 44 cents, more than double the consensus of 20 cents, and forecast 2024 capex of about $450 million, stronger than the consensus of $380.7 million.
Cryptocurrency-exposed stocks are climbing in pre-market trading, with the price of Bitcoin up more than +3% at a 10-month high. Marathon Digital (MARA), Riot Platforms (RIOT), Coinbase Global (COIN), and MicroStrategy (MSTR) are up +3% or more.
Akamai Technologies (AKAM) rose more than +2% in pre-market trading after Piper Sandler upgraded the stock to overweight from neutral.
WW International (WW) surged more than +15% in pre-market trading after Goldman Sachs upgraded the stock to buy from neutral with a price target of $13.
Virtu Financial (VIRT) climbed more than +2% in pre-market trading after Morgan Stanley upgraded the stock to equal weight from underweight.
Welltower (WELL) gained more than +1% in pre-market trading after Evercore ISI upgraded the stock to outperform from in line.
ADTRAN Holdings (ADTN) tumbled more than -10% in pre-market trading after it forecasted preliminary Q1 revenue of $322 million-$326 million, weaker than the consensus of $355 million-$375 million.
Southwestern Energy (SWN) dropped more than -3% in pre-market trading after Wells Fargo Securities downgraded the stock to underweight from equal weight.
Nasdaq (NDAQ) slid more than -1% in pre-market trading after Morgan Stanley downgraded the stock to equal weight from overweight.
Antero Resources (AR) fell nearly -1% in pre-market trading after Wells Fargo Securities downgraded the stock to equal weight from overweight.
Moderna (MRNA) dropped more than -7% in pre-market trading after it said a final stage study of its RNA flu shot hadn’t accumulated enough data to determine efficacy, and it will advance with another candidate.
Today’s U.S. Earnings Reports (4/11/2023)
Albertsons Cos Inc (ACI), CarMax Inc (KMX), Skillsoft Corp (SKIL).
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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.
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