What you need to know…
The S&P 500 Index ($SPX) (SPY) today is up +0.88%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.60%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +1.48%.
U.S. stock indexes this morning are moderately higher. Strength in technology stocks is lifting the overall market this morning, with Meta Platforms up more than +14% after reporting better-than-expected Q1 revenue and forecasting Q2 revenue above consensus. Also, U.S. banking concerns eased, with First Republic Bank up more than +8%, recovering a bit after the -80% plunge in its stock price seen over the past two sessions.
However, stock indexes fell back from their best levels after this morning’s news that the U.S. economy grew less than expected in Q1. Also, bond yields jumped after weekly U.S. jobless claims unexpectedly fell, and the U.S. Q1 core PCE deflator rose more than expected.
U.S. Q1 GDP rose +1.1% (q/q annualized), weaker than expectations of +1.9%. Q1 personal consumption rose +3.7%, weaker than expectations of +4.0%. The Q1 core PCE deflator rose +4.9% (q/q annualized), stronger than expectations of +4.7%.
U.S. weekly initial unemployment claims unexpectedly fell -16,000 to 230,000, showing a stronger labor market than expectations of an increase to 248,000. Weekly continuing claims unexpectedly fell -3,000 to 1.858 million, showing a stronger labor market than expectations of an increase to 1.870 million.
U.S. Mar pending home sales unexpectedly fell -5.2% m/m, weaker than expectations of an +0.8% m/m increase and the biggest decline in 6 months.
The markets are showing a 90% chance of a 25 bp rate hike by the Federal Reserve at the May 2-3 FOMC meeting and have fully priced in a 25 bp rate hike by the ECB at its May 4 ECB meeting.
Global bond yields are higher. The 10-year T-note yield is up +7.0 bp at 3.519%. The 10-year German bund yield is up +5.7 bp at 2.455%. The 10-year UK gilt yield is up +5.1 bp at 3.781%.
On the bullish side for stocks, Meta Platforms is up more than +14% after reporting stronger-than-expected Q1 revenue and forecasting Q2 revenue above consensus. Also, Hasbro is up more than +10% after reporting Q1 net revenue above consensus. In addition, banking concerns eased slightly, with First Republic Bank up more than +8% on short covering following its 2-day plunge as the focus remains on whether it can find a buyer to shore up its finances.
On the bearish side, Align Technology is down more than -12% after reporting weaker-than-expected Q1 case volume. Also, AbbVie is down more than -7% after forecasting full-year adjusted EPS below consensus. In addition, Caterpillar is down more than -3% after reporting Q1 order backlog was flat compared to Q4, bolstering concerns about stagnant demand.
Overseas stock markets are higher. The Euro Stoxx 50 is up +0.18%. China’s Shanghai Composite closed up +0.67%, and Japan’s Nikkei Stock Index closed up +0.15%.
Today’s stock movers…
Meta Platforms (META) is up more than +14% to lead gainers in the S&P 500 and Nasdaq 100 after reporting Q1 revenue of $28.65 billion, better than expectations of $27.67 billion, and forecast Q2 revenue of $29.5 billion-$32 billion, stronger than the consensus of $29.48 billion.
Hasbro (HAS) is up more than +10% after reporting Q1 net revenue of $1.0 billion, well above the consensus of $885.3 million.
First Republic Bank (FRC) is up more than +8% on short covering following its 2-day plunge as the focus remains on whether it can find a buyer to shore up its finances.
Pentair Plc (PNR) is up more than 6% after reporting Q1 net sales of $1.03 billion, stronger than the consensus of $998.8 million.
CBRE Group (CBRE) is up more than +6% after reporting Q1 revenue of $7.41 billion, better than the consensus of $7.10 billion.
Fidelity National Information Services (FIS) is up more than +3% after reporting Q1 adjusted EPS of $1.29, better than the consensus of $1.21, and raised its full-year adjusted EPS forecast to $5.76-$6.06 from a prior view of $5.70-$6.00, the midpoint above the consensus of $5.88.
Honeywell International (HON) is up more than +3% to lead gainers in the Dow Jones Industrials after reporting Q1 sales of $8.86 billion, above the consensus of $8.51 billion and raised its full-year sales estimate to $36.5 billion-$37.3 billion from an earlier projection of $36 billion-$37 billion.
Ebay (EBAY) is up more than +3% after it reported Q1 net revenue of $2.51 billion, better than the consensus of $2.48 billion, and forecasting Q2 net revenue of $2.47 billion-$2.54 billion, stronger than the consensus of $2.43 billion.
Comcast (CMCSA) is up more than +5% after reporting Q1 adjusted EPS of 92 cents, above the consensus of 83 cents.
Align Technology (ALGN) is down more than -12% to lead losers in the S&P 500 and Nasdaq 100 after reporting Q1 case volume of 575,000, weaker than expectations of 585,000.
AbbVie (ABBV) is down more than -7% after forecasting full-year adjusted EPS of $10.72-$11.12, the midpoint weaker than the consensus of $10.96.
Caterpillar (CAT) is down more than -3% to lead lowers in the Dow Jones Industrials after reporting Q1 order backlog was flat compared to Q4, bolstering concerns about stagnant demand.
Keurig Dr Pepper (KDP) is down more than -5% after reporting Q1 adjusted operating income was $699.0 million, below the consensus of $723.4 million, and that Q1 U.S. net coffee sales fell -1.3% y/y to $931 million.
United Rentals (URI) is down more than -5% in pre-market trading after reporting Q1 adjusted EPS of $7.95, below the consensus of $8.04.
Southwest Airlines (LUV) is down more than -4% after reporting Q1 operating revenue of $5.71 billion, weaker than the consensus of $5.73 billion.
Tractor Supply (TSCO) is down more than -3% after reporting Q1 comparable sales rose +2.1%, weaker than the consensus of +4.31%.
Across the markets…
June 10-year T-notes (ZNM23) today are down -21 ticks, and the 10-year T-note yield is up +7.0 bp at 3.519%. Jun T-notes this morning are moving lower on signs of strength in the labor market and higher inflation. Today’s U.S. economic reports showed weekly jobless claims unexpectedly fell and that the Q1 core PCE deflator rose more than expected. Supply pressures are also weighing on T-notes as the Treasury will conclude this week's $144 billion auction package of T-notes and floating-rate notes,
with a $45 billion auction of 7-year T-notes later today.
The dollar index (DXY00) today is up by +0.21%. The dollar this morning whipsawed higher on strength in T-note yields. T-note yields rose after weekly U.S. initial unemployment claims unexpectedly fell, and the Q1 core PCE deflator rose more than expected. The dollar today dipped lower briefly after Q1 U.S. GDP grew at a slower-than-expected pace.
EUR/USD (^EURUSD) today is down by -0.37%. The euro is under pressure today from a stronger dollar. Also, today’s economic news that showed Eurozone Apr economic confidence rose less than expected was bearish for the euro.
Eurozone Apr economic confidence rose +0.1 to 99.3, weaker than expectations of 99.9.
USD/JPY (^USDJPY) today is up by +0.33%. The yen today is under pressure from higher T-note yields. Also, easing of the U.S. banking turmoil has reduced the safe-haven demand for the yen after First Republic Bank climbed more than 8% today after plunging the last two sessions. In addition, the yen is being undercut on expectations for the BOJ to maintain its stimulus measures when it concludes its 2-day policy meeting on Friday.
June gold (GCM3) this morning is down -8.9 (-0.45%), and May silver (SIK23) is down -0.221 (-0.89%). Precious metals prices this morning are moderately lower, with gold falling to a 1-week low. A stronger dollar today is weighing on metals prices. Also, higher global bond yields today are negative for metals. Silver is also under pressure on signs of weakness in industrial metals demand after U.S. Q1 GDP expanded less than expected. However, the ongoing U.S. banking turmoil has sparked fund buying of gold as a safe haven after gold holdings in exchange-traded funds (ETFs) rose to a 3-1/2 month high Wednesday.
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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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