Tech Stocks Pressured by Nvidia

The S&P 500 Index ($SPX) (SPY) this morning is up +0.31%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.63%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.09%. 

Stock indexes this morning are mixed.  Lower T-note yields today are supportive of the overall market.  However, Nvidia's -2% slide has undercut technology stocks and dragged the Nasdaq 100 into negative territory.  End-of-quarter rebalancing by stock fund managers is underpinning stock prices ahead of Thursday’s last trading day of Q1.  US stocks also have carryover support from a rally in European stocks as the Euro Stoxx 50 today rose to a new 23-year high. 

US weekly MBA mortgage applications fell -0.7% in the week ended March 22.  The refinancing mortgage sub-index fell -1.6%, and the purchase mortgage sub-index fell -0.2%.  The average 30-year fixed rate mortgage fell -4 bp to 6.93% from 6.97%.

The markets are discounting the chances for a -25 bp rate cut at 14% for the next FOMC meeting on April 30-May 1 and 77% for the following meeting on June 11-12.

Overseas stock markets today are mixed.  The Euro Stoxx 50 climbed to a 23-year high and is up +0.56%. China's Shanghai Composite fell to a 3-1/2 week low and closed down -1.26%.  Japan's Nikkei Stock Index closed up +0.90%.

Interest Rates

June 10-year T-notes (ZNM24) this morning are up +4 ticks.  The 10-year T-note yield is down -2.2 bp at 4.210%. June T-note prices today are climbing on carryover support from a rally in 10-year German bunds to a 2-week high. Strength in stocks today is limiting the upside in T-notes.  Also, supply pressures are weighing on T-notes as the Treasury will auction $28 billion of 2-year floating rate notes later today as part of this week’s $161 billion auction package of T-notes and floating rate notes.    

European government bond yields today are lower.  The 10-year German bund yield fell -to a 2-week low of 2.295% and is down -4.8 bp to 2.302%.  The 10-year UK gilt yield is down -3.0 bp to 3.941%.

The Eurozone Mar economic confidence index rose +0.8 to 96.3, stronger than expectations of 96.2.

ECB Governing Council member Kazaks said, "Inflation is low and will continue to fall in the whole Eurozone," and June may be a good time for the ECB to begin lowering borrowing costs.

ECB Executive Board member Cipollone said, "If incoming data confirm the scenario foreseen in the March projections, the ECB should stand ready to swiftly dial back its restrictive monetary policy stance."

US Stock Movers

Cintas (CTAS) is up more than +9% to lead gainers in the S&P 500 and Nasdaq 100 after reporting Q3 adjusted EPS of $3.84, better than the consensus of $3.47 and raised guidance on full-year EPS to $14.80-$15.00 from a previous estimate of $14.35-$14.65.

Merck (MRK) is up more than +4% to lead gainers in the Dow Jones Industrials after its Winrevair drug, a treatment for pulmonary arterial hypertension, won approval from the US Food and Drug Administration. 

Marvell Technology (MRVL) is up more than +5% after Citigroup opened a 30-day upside catalyst on the stock ahead of its AI Investor event next month.

Extra Space Storage (EXR) is up more than +3% after Barclays initiated coverage on the stock with a recommendation of overweight with a price target of $157.

Medtronic Plc (MDT) is up more than +2% after the FDA approved its aortic valve replacement system for treating symptomatic severe aortic stenosis.

NCino (NCNO) is up more than +18% after reporting Q4 adjusted EPS of 21 cents, well above the consensus of 12 cents, and forecast 2025 adjusted EPS of 60 cents-64 cents, stronger than the consensus of 57 cents. 

Novocure Ltd (NVCR) is up more than +17% after saying a late-stage trial of its drug for treating patients with brain metastases from non-small cell lung cancer met its primary endpoint. 

Roivant Sciences Ltd (ROIV) is up more than +7% after S&P Dow Jones Indices said the company will replace Sunrun in the S&P MidCap 400 effective April 1. 

Arista Networks (ANET) is down more than -3% to lead losers in the S&P 500 on insider selling after an SEC filing showed President and CEO Ullal sold $6.67 million of shares last Friday.

Carnival (CCL) is down more than -2% after reporting Q1 passengers carried at 3 million, below the consensus of 3.12 million.

Super Micro Computer (SMCI) is down more than -3% on profit-taking after it rallied by more than +15% over the past week.

Nvidia (NVDA) is down more than -2% on profit-taking, with the stock up more than +86% so far this year. 

Salesforce (CRM) is down more than -1% to lead losers in the Dow Jones Industrials on signs of insider selling after an SEC filing showed CEO Benioff sold $4.59 million of shares on Monday.

Netflix (NFLX) is down more than -1% after Wedbush cut the stock from its Best Ideas List, saying it will be “much harder” for the company to impress investors this year versus last year.

Direct Digital Holdings (DRCT) is down more than -42% after Benchmark Company LLC cut its price target on the stock to $23 from $30.

FedEx (FDX) is down more than -1% after BNP Paribas Exane downgraded the stock to underperform from neutral with a price target of $250.

Earnings Reports (3/27/2024)

Carnival Corp (CCL), Chemours Co/The (CC), Cintas Corp (CTAS), Jefferies Financial Group Inc (JEF), and RH (RH).

• Natural Gas: Are Lower Lows on the Horizon as the Withdrawal Season Ends?
• CRH Continues to Benefit From Infrastructure Spending. Stock Hits 68th 52-Week High. Time to Buy?
• Dollar Modestly Higher on Weakness in the Euro
• Stocks Push Higher as T-note Yields Slip