June S&P 500 futures (ESM23) are down -0.49%, and June Nasdaq 100 E-Mini futures (NQM23) are down -0.52% this morning after three major U.S. benchmark indices ended the regular trading session in a mixed fashion as investors braced for quarterly reports from heavyweight names and a deluge of crucial economic data.
In Monday’s trading session, the benchmark S&P 500 and the blue-chip Dow closed slightly higher, while the tech-heavy Nasdaq 100 underperformed, weighed down by a drop in shares of some Chinese tech companies and a more than -1% fall in shares of Tesla Inc (TSLA) after the automaker raised its 2023 capital expenditure forecast to $7 billion-$9 billion, up from a January forecast of $6 billion-$8 billion.
“People are unsure about what this week holds, especially when it comes to earnings,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.
First-quarter corporate earnings season is gathering pace, with high-profile mega-caps like Microsoft (MSFT), Alphabet (GOOGL), Visa (V), PepsiCo (PEP), and McDonald’s (MCD) set to report their quarterly figures today. Analysts expect aggregate S&P 500 earnings to notch a 4.7% year-over-year decline for the quarter, a slight improvement compared with an expected drop of 5.1% at the start of April.
Meanwhile, U.S. rate futures have priced in an 85.4% chance of a 25 basis point rate increase and a 14.6% chance of no hike at the May meeting.
Today, all eyes are focused on the U.S. CB Consumer Confidence in a couple of hours. Economists, on average, forecast that April CB Consumer Confidence will stand at 104.0, compared to the previous value of 104.2.
Also, investors are likely to focus on U.S. New Home Sales data, which was at 640K in February. Economists foresee the new figure to be 630K.
U.S. S&P/CS HPI Composite - 20 n.s.a. will be reported today. Economists foresee this figure to stand at +0.1% y/y in February, compared to the previous number of +2.5% y/y.
U.S. Building Permits data will also be closely watched today. Economists expect the March figure to be 1.413M, compared to 1.550M in February.
U.S. Richmond Manufacturing Index will come in today as well. Economists expect this figure to stand at +4 in April, compared to the previous value of -5.
In the bond markets, United States 10-Year rates are at 3.448%, down -1.89%.
The Euro Stoxx 50 futures are down -0.53% this morning as investors assessed more corporate earnings and digested comments from European Central Bank policymakers while cautiously awaiting the start of big tech earnings season on Wall Street. Losses in mining and bank stocks are leading the overall market lower, with UBS Group Ag (UBSG.Z.IX) falling over -2% after the lender reported a 52% drop in first-quarter profit due to a $665 million increase in legal provisions relating to U.S. residential mortgage-backed securities. Also, Banco Santander Sa (SAN.E.DX) slid more than -4% even after the retail-banking giant’s first-quarter earnings topped estimates. Meanwhile, ECB Chief Economist Philip Lane told the French paper Le Monde in an interview published on Tuesday that the ECB will need to raise interest rates again in early May, while ECB Executive Board member Isabel Schnabel told Politico in an interview published Monday that a 50 basis points rate hike is not “off the table.” In other corporate news, Nestle Sa (NESN.Z.IX) rose over +1% after the world’s largest packaged food company reported slightly better-than-expected Q1 sales.
The European economic data slate is mainly empty on Tuesday.
Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.32%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.09%.
China’s Shanghai Composite today closed lower for a fifth straight session as investor sentiment remained weak after data released last Tuesday pointed to uneven economic recovery. Also, geopolitical tensions continued to weigh on sentiment as the Biden administration plans to limit investments in key parts of China’s economy. Meanwhile, a statement from the government said Tuesday that China’s financial hub of Shanghai would ramp up investments in specialized technology, including chip design, circuitry, and artificial intelligence. Investor focus is now on the April meeting of the Communist Party’s Politburo, the top decision-making body headed by President Xi Jinping.
At the same time, Japan’s Nikkei 225 Stock Index closed slightly higher for a second straight session, lifted by electronics makers on earnings optimism and expanded government subsidies for chip production. Chip stocks gained ground after Industry Minister Yasutoshi Nishimura said the country intends to give additional subsidies to chipmaker Rapidus. At the same time, a plunge in shares of steel producers amid signs of weakening Chinese demand kept gains limited. Meanwhile, Mitsubishi Electric Corp climbed more than +3% after the company said it would spin off its automotive audio business. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up 1.37% to 16.32.
Pre-Market U.S. Stock Movers
First Republic Bank (FRC) plunged about -21% in pre-market trading after the lender showed deposits dropped by more than $100 billion in the first quarter, and the bank said it plans to cut its workforce by 20-25%.
Medpace Holdings Inc (MEDP) climbed more than +22% in pre-market trading after the company reported upbeat Q1 results and lifted its FY23 outlook.
Cadence Design Systems Inc (CDNS) fell over -4% in pre-market trading after the company reported upbeat Q1 results but posted weaker-than-expected Q2 guidance.
Packaging Corp of America (PKG) slid more than -5% in pre-market trading after the company reported downbeat Q1 results.
SAP SE ADR (SAP) gained over +1% in pre-market trading after Citi upgraded the stock to buy from neutral.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - April 25th
Microsoft (MSFT), Alphabet A (GOOGL), Visa A (V), PepsiCo (PEP), McDonald’s (MCD), Danaher (DHR), United Parcel Service (UPS), NextEra Energy (NEE), Texas Instruments (TXN), Verizon (VZ), Raytheon Technologies (RTX), General Electric (GE), Chubb (CB), Fiserv (FISV), UBS Group (UBS), Sherwin-Williams (SHW), 3M (MMM), Moody’s (MCO), Chipotle Mexican Grill (CMG), Kimberly-Clark (KMB), General Motors (GM), Archer-Daniels-Midland (ADM), MSCI (MSCI), Biogen (BIIB), Dow (DOW), Centene (CNC), Illumina (ILMN), Halliburton (HAL), Enphase (ENPH), Coca-Cola European (CCEP), Corning (GLW), CoStar (CSGP), Spotify Tech (SPOT), Equity Residential (EQR), Laboratory America (LH), Northern Trust (NTRS), Avangrid Inc (AGR), PulteGroup (PHM), Hubbell (HUBB), TransUnion (TRU), First Quantum Minerals (FQVLF), Ares Capital (ARCC), Juniper (JNPR), Universal Health Services (UHS), Manhattan Associates (MANH), Boston Properties (BXP), Invesco (IVZ), EastGroup Properties (EGP), Sensata Tech (ST), Tenet Healthcare (THC), Boyd Gaming (BYD), Polaris Industries (PII), Matador (MTDR), Nextera Energy Partners LP (NEP), OneMain Holdings (OMF), Asbury Automotive (ABG), GATX (GATX), Old National Bancorp (ONB), Zurn Water Solutions (ZWS), Life Time Holdings (LTH), John Bean Tech (JBT), O-I Glass (OI), Armstrong World Industries (AWI), Encore Wire (WIRE), Albany (AIN), UMB Financial (UMBF), Community Bank System (CBU), Site Centers (SITC), Highwoods Properties (HIW), Atlantic Union (AUB), Shutterstock (SSTK), JetBlue (JBLU), Stepan (SCL), Xerox (XRX), Simmons First National (SFNC), First Bancorp (FBP), Nextier Oilfield Solutions (NEX), Vicor (VICR), First Merchants (FRME), TFI Intl (TFII), Retail Opportunity (ROIC), CureVac NV (CVAC), BankUnited (BKU), Stride (LRN), Renasant (RNST), Enova International Inc (ENVA), Lakeland Financial (LKFN), Trustmark (TRMK), American Assets (AAT), PacWest (PACW), Netlist (NLST), USANA Health Sciences (USNA), First Commonwealth Financial (FCF), Triumph Bancorp (TFIN), Nexpoint Residential Trust Inc (NXRT), Southside (SBSI).
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On the date of publication, Oleksandr Pylypenko 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.
