The S&P 500 Index ($SPX) (SPY) this morning is up +1.05%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.37%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +1.63%.
Stocks this morning are moderately higher, led by strength in technology stocks. Alphabet is up more than +6% after Bloomberg reported that Apple is in talks to build Google’s Gemini AI engine into its iPhone. Also, Tesla is up more than +5% on news that the company will raise the price of its Model Y cars in April. In addition, Nvidia is up more than +2% after HSBC raised its price target on the stock.
A bearish factor for stocks is today’s +1.4 bp rise in the 10-year T-note yield to a 3-week high on the stronger-than-expected NAHB housing market index and the rise in the 10-year breakeven inflation expectations rate to a 1-1/2 week high.
Market attention this week will focus on the Tue/Wed FOMC meeting. The markets expect no change to the 5.25%-5.50% fed funds target range and will look to newly updated Fed projections (dot-plot) for the outlook for interest rate cuts. The markets will also scour comments from Fed Chair Powell after Wednesday's conclusion of the FOMC meeting for the future direction of Fed policy.
The US Mar NAHB housing market index unexpectedly rose +3 points to an 8-month high of 51, stronger than expectations of no change at 48.
The markets are discounting the chances for a -25 bp rate cut at 1% for the Tue/Wed FOMC meeting, 9% for the following meeting on April 30-May 1, and 64% for the meeting after that on June 11-12.
Overseas stock markets today are mixed. The Euro Stoxx 50 is down -0.12%. China's Shanghai Composite closed up +0.99%. Japan's Nikkei Stock Index closed up +2.67%.
Interest Rates
June 10-year T-notes (ZNM24) this morning are down -6 ticks. The 10-year T-note yield is up +1.4 bp at 4.320%. June T-notes fell to a 3-week low today, and the 10-year T-note yield rose to a 3-week high of 4.330%. Strength in stocks today is weighing on T-note prices. Also, an increase in inflation expectations is bearish for T-notes as today's 10-year breakeven inflation rate rose to a 1-1/2 week high of 2.330%. T-notes dropped to their lows on this morning’s stronger-than-expected Mar NAHB housing market index report.
European government bond yields today are mixed. The 10-year German bund yield rose to a 2-week high of 2.468% and is up +1.8 bp at 2.460%. The 10-year UK gilt yield is down -1.6 bp at 4.085%.
ECB Governing Council member de Cos said, "The announcement last week that we have completed our goal of getting inflation to 2% is compatible with a cut in interest rates soon, and that could probably happen in June."
US Stock Movers
Alphabet (GOOGL) is up more than +6% to lead gainers in the S&P 500 and Nasdaq 100 after Bloomberg News reported that Apple is in talks to build Google’s Gemini artificial intelligence search engine into the iPhone.
Tesla (TSLA) is up more than +5% after the company posted on X that it will increase the price by $1,000 for all US Model Y vehicles on April 1st.
Nvidia (NVDA) is up more than +3% after HSBC raised its price target on the stock to $1,050 from $880.
PepsiCo (PEP) is up more than +3% after Morgan Stanley upgraded the stock to overweight from equal weight.
CoStar Group (CSGP) is up more than +2% after JMP Securities raised its price target on the stock to $110 from $85.
Apple (AAPL) is up more than +2% to lead gainers in the Dow Jones Industrials on news it is in talks to let Google’s Gemini power iPhone AI features.
HashiCorp (HCP) is up more than +8% on a report that said the company has been considering strategic options, including a sale.
Globus Medical (GMED) is up more than +2% after BTIG LLC upgraded the stock to buy from neutral with a price target of $60.
B Riley Financial (RILY) is down more than -11% after it failed to file audited results after an extension period ended.
Shift4 Payments (FOUR) is down more than -7% after CEO Isaacman said bids from potential suitors have failed to value the firm adequately.
Boeing (BA) is down more than -1% to lead losers in the Dow Jones Industrials after the US Attorney for the Western District of Washington late last Friday said it had convened a “grand jury investigation of suspected violations of federal criminal laws” by Boeing.
Earnings Reports (3/18/2024)
Smartsheet Inc (SMAR), Bit Digital Inc (BTBT), Comtech Telecommunications Corp (CMTL), DZS Inc (DZSI), Eyenovia Inc (EYEN), Sagimet Biosciences Inc (SGMT), Science Applications International (SAIC), StoneCo Ltd (STNE), System1 Inc (SST).
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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.
