Morning Markets
June E-Mini S&P 500 futures (ESM23) this morning are up +0.16%, and June Nasdaq 100 E-Mini futures (NQM23) are up +0.19%.
U.S. stock index futures this morning are moderately higher. The markets are awaiting the conclusion of the 2-day FOMC meeting later today to see if the Fed will provide clues as to when it will end its rate-hike campaign. Fed Chair Powell will also deliver comments following today’s meeting. Stock index futures fell back from their best levels after the Apr ADP employment report rose more than expected.
Weighing on stocks is the lack of clarity regarding the U.S. debt ceiling. Treasury Secretary Yellen said the Treasury Department may run out of cash as soon as June 1 unless the debt ceiling is raised.
U.S. Apr ADP employment rose +296,000, stronger than expectations of +150,000 and the biggest increase in 9 months.
The markets are showing an 88% chance of a 25 bp rate hike by the Federal Reserve at the conclusion of today’s FOMC meeting and have fully priced in a 25 bp rate hike by the ECB at Thursday’s ECB meeting.
Global bond yields are mixed. The 10-year T-note yield is down -3.0 bp at 3.394%. The 10-year German bund yield fell to a 3-1/2 week low of 2.218% and is down -1.3 bp at 2.245%, and the UK 10-year gilt is up +0.2 bp at 3.671%.
On the bullish side for stocks, Eli Lilly jumped more than +6% in pre-market trading after its donanemab drug for Alzheimer’s slowed the progress of the disease in a final-stage trial, paving the way for the company to apply for approval of the drug from the FDA.  Also, Generac Holdings is up more than +5% after reporting stronger-than-expected Q1 net sales. In addition, Kraft Heinz and Ingredion are up more than +1% after reporting Q1 adjusted EPS above consensus.
On the bearish side, regional bank stocks are under pressure in pre-market trading as sentiment remains sour on the sector after First Republic Bank this week became the third U.S. bank to fail this year. Also, energy stocks are falling, with the price of WTI crude down more than -2% at a 5-week low.  Estee Lauder is down more than -10% after forecasting full-year net sales will fall -10% to -12% and cutting guidance on its full-year adjusted EPS.Â
Overseas stock markets are mixed. The Euro Stoxx 50 is up +0.50%. China’s Shanghai Composite remains closed for the Golden Week holidays, and Japan’s Nikkei Stock Index was closed for Constitution Memorial Day.  Hong Kong’s Hang Seng Index closed down -1.18%.Â
The Euro Stoxx 50 index today is moderately higher. Strength in defensive stocks leads the overall market higher, with consumer stocks outperforming banks and automakers. Stocks are also higher on today’s news that unemployment in the Eurozone unexpectedly fell to a record low in March. Bank stocks retreated today, led by a -3% drop in Lloyds after it reported weaker-than-expected Q1 net interest income. Another positive for European equities is a decline in interest rates as the 10-year German bund yield fell to a 3-1/2 week low today, and the UK 10-year gilt yield fell to a 2-1/2 week low.
The Eurozone Mar unemployment rate unexpectedly fell -0.1 to a record low of 6.5%, showing a stronger labor market than expectations of no change at 6.6%.
China’s Shanghai Composite Stock Index was closed today for the Golden Week holidays. China’s markets will remain closed through Wednesday for the holidays.Â
Japan’s Nikkei Stock Index was closed today for Constitution Memorial Day and will be closed for the rest of the week. Hong Kong’s Hang Seng index posted moderate losses. Doubts about the strength of China’s economic recovery weighed on Asian stocks in Hong Kong trading. Also, concern about the health of the banking sector weighed on Asian bank stocks after U.S. regional bank shares tumbled on Tuesday. Asian markets are also concerned about a hawkish tone from the Fed today, even if it acknowledges a pause in its rate hike campaign.
Pre-Market U.S. Stock Movers
Eli Lilly (LLY) jumped more than +6% in pre-market trading after its donanemab drug for Alzheimer’s slowed the progress of the disease in a final-stage trial, paving the way for the company to apply for approval of the drug from the FDA.
Generac Holdings (GNRC) rallied more than +5% in pre-market trading after reporting Q1 net sales of $887.9 million, stronger than the consensus of $840 million.
Â
Yum China (YUMC) climbed more than +2% in pre-market trading after reporting Q1 revenue of $2.92 billion, stronger than the consensus of $2.81 billion.
Super Micro Computer (SMCI) rallied more than +8% in pre-market trading after forecasting Q4 net sales of $1.7 billion-$1.9 billion, above the consensus of $1.64 billion.Â
Kraft Heinz (KHC) gained more than +1% in pre-market trading after reporting Q1 adjusted EPS of 68 cents, better than the consensus of 60 cents, and raised guidance on its full-year adjusted EPS estimate to $2.83-$2.91 from a prior view of $2.67-$2.75, stronger than the consensus of $2.72.
Ingredion (INGR) rose more than +2% in pre-market trading after reporting Q1 adjusted EPS of $2.80, well above the consensus of $2.00, and raised its full-year adjusted EPS forecast to $8.70-$9.40 from a prior view of $7.70-$8.40, stronger than the consensus of $8.15.Â
Match Group (MTCH) gained more than +1% in pre-market trading, despite reporting Q1 earnings below consensus, as it noted strength in its Tinder business.Â
Regional bank stocks are under pressure in pre-market trading as sentiment remains sour on the sector after First Republic Bank this week became the third U.S. bank to fail this year. PacWest Bancorp (PACW), Western Alliance Bancorp (WAL), Zions Bancorp (ZION), Truist Financial (TFC), Comerica (CMA), and KeyCorp (KEY) are down more than -1%.Â
Estee Lauder (EL) sank more than -10% in pre-market trading after forecasting full-year net sales will fall -10% to -12% and cut guidance on its full-year adjusted EPS estimate to $3.29-$3.39 from a previous forecast of $4.87-$5.02.
Advanced Micro Devices (AMD) fell more than -6% in pre-market trading after forecasting Q2 revenue of $5.0-$5.6 billion, the midpoint above the consensus of $5.51 billion.Â
Starbucks (SBUX) dropped more than -5% in pre-market trading after it left guidance for fiscal year 2023 unchanged, despite reporting stronger-than-expected Q2 sales, a move that analysts said suggests growth will weaken in the second half of the year.
Energy stocks and energy service providers are falling in pre-market trading, with the price of WTI crude down more than -2% at a 5-week low. Chevron (CVX), ConocoPhillips (COP), Devon Energy (DVN), Diamondback Energy (FANG), Exxon Mobil (XOM), Haliburton (HAL), Marathon Oil (MRO), Occidental Petroleum (OXY), and Valero Energy (VLO) are down -1% or more.
Yum! Brands (YUM) dropped more than -2% in pre-market trading after reporting Q1 adjusted EPS of $1.06, below the consensus of $1.13.
Today’s U.S. Earnings Reports (5/3/2023)
Albemarle Corp (ALB), Allstate Corp/The (ALL), ANSYS Inc (ANSS), APA Corp (APA), Atmos Energy Corp (ATO), Bio-Techne Corp (TECH), Bunge Ltd (BG), CDW Corp/DE (CDW), Ceridian HCM Holding Inc (CDAY), Cognizant Technology Solutions (CTSH), Corteva Inc (CTVA), CVS Health Corp (CVS), DENTSPLY SIRONA Inc (XRAY), Emerson Electric Co (EMR), Equinix Inc (EQIX), Estee Lauder Cos Inc/The (EL), Etsy Inc (ETSY), Eversource Energy (ES), Exelon Corp (EXC), FleetCor Technologies Inc (FLT), Garmin Ltd (GRMN), Generac Holdings Inc (GNRC), Globe Life Inc (GL), Host Hotels & Resorts Inc (HST), Ingersoll Rand Inc (IR), Kraft Heinz Co/The (KHC), Marathon Oil Corp (MRO), MetLife Inc (MET), Mosaic Co/The (MOS), NiSource Inc (NI), Phillips 66 (PSX), Public Storage (PSA), Qorvo Inc (QRVO), QUALCOMM Inc (QCOM), Realty Income Corp (O), SolarEdge Technologies Inc (SEDG), Trane Technologies PLC (TT), Trimble Inc (TRMB),Â
Verisk Analytics Inc (VRSK), Williams Cos Inc/The (WMB), Yum! Brands Inc (YUM).
More Stock Market News from Barchart
- Watch Your Heads! The Debt Ceiling Is Coming.
- Options Combination on Exxon Mobil Stock Could Provide a Nice Entry Point
- Stock Index Futures Move Higher as Investors Await Fed Rate Decision, Bank and Debt Fears Return
- Is the Seasonal Play to Sell Equities in May and then Walk Away?
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.
/A%20corporate%20sign%20for%20SK%20Hynix%20by%20Tada%20Images%20via%20Adobe%20Stock.jpeg)
