June S&P 500 E-Mini futures (ESM24) are down -0.04%, and June Nasdaq 100 E-Mini futures (NQM24) are down -0.08% this morning as U.S. Treasury yields continued to rise, while investors looked ahead to quarterly reports from more big banks, remarks from Fed officials, and a fresh batch of U.S. economic data.
In yesterday’s trading session, Wall Street’s major indexes closed in the red, with the benchmark S&P 500 notching a 1-3/4 month low, the blue-chip Dow posting a 2-3/4 month low, and the tech-heavy Nasdaq 100 falling to a 3-week low. Salesforce (CRM) slumped over -7% and was the top percentage loser on the S&P 500 and Dow after the Wall Street Journal reported that the cloud software company is in advanced talks to acquire data-management firm Informatica. Also, Tesla (TSLA) slid more than -5% after CEO Elon Musk said the carmaker would reduce its global headcount by more than 10% amid a slowdown in electric vehicle demand. In addition, Apple (AAPL) fell over -2% after preliminary data from research firm International Data Corporation showed that the company’s global iPhone shipments fell 9.6% on year to 50.1 million units in the first three months of the year. On the bullish side, M&T Bank (MTB) climbed more than +4% and was the top percentage gainer on the S&P 500 after boosting its full-year net interest income guidance. Also, Goldman Sachs (GS) rose nearly +3% and was the top percentage gainer on the Dow after the Wall Street bank posted upbeat Q1 results.
“Stocks began to violate uptrends and pull back. Interest rates are expected to stay higher for longer. A more cautious and tactical approach is favored as earnings season gets underway,” said Craig Johnson at Piper Sandler.
Economic data on Monday showed that U.S. retail sales rose +0.7% m/m in March, stronger than expectations of +0.4% m/m. Also, U.S. March core retail sales increased +1.1% m/m, higher than the consensus estimate of +0.5% m/m. At the same time, the U.S. NY Empire State manufacturing index came in at -14.30 in April, weaker than expectations of -5.20.
New York Fed President John Williams stated on Monday that the U.S. central bank will likely begin cutting interest rates this year if inflation continues to gradually decline. “We will need to start a process at some point to bring interest rates back to more normal levels, and my own view is that process will likely start this year,” Williams said.
U.S. rate futures have priced in a 1.8% probability of a 25 basis point rate cut at the May FOMC meeting and a 22.7% chance of a 25 basis point rate cut at the conclusion of the Fed’s June meeting.
Meanwhile, Federal Reserve Chair Jerome Powell is scheduled to participate in a “fireside chat” with Bank of Canada Governor Tiff Macklem at the Washington Forum on the Canadian Economy later in the day. Also, Fed Vice Chair Philip Jefferson, New York Fed President John Williams, and Richmond Fed President Thomas Barkin will speak today.
On the earnings front, notable companies like UnitedHealth (UNH), Johnson & Johnson (JNJ), Bank of America (BAC), Morgan Stanley (MS), and United Airlines (UAL) are set to report their quarterly figures today.
On the economic data front, investors will likely focus on the U.S. Building Permits preliminary data in a couple of hours. Economists, on average, forecast that the March Building Permits will stand at 1.514M, compared to the previous figure of 1.524M.
U.S. Housing Starts data will be reported today. Economists estimate this figure to be 1.480M in March, compared to the previous value of 1.521M.
U.S. Industrial Production data will come in today as well. Economists forecast this figure to stand at +0.4% m/m in March, compared to the previous number of +0.1% m/m.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.649%, up +0.43%.
The Euro Stoxx 50 futures are down -1.18% this morning, following a selloff in Asia and on Wall Street as concerns over geopolitical tensions in the Middle East, higher-for-longer U.S. interest rates, and China’s sluggish economy weighed on sentiment. Mining and financial stocks underperformed on Tuesday. The Office for National Statistics said Tuesday that U.K. wage growth surpassed expectations in the three months to February, but the figures were accompanied by a jump in unemployment. Separately, final data from the statistical office Istat showed that Italy’s annual inflation rate rose less than expected in March. In addition, the ZEW Economic Research Institute reported Tuesday that German investor morale improved more than expected in April. In corporate news, Dr Martens Plc (DOCS.L.EB) plummeted over -26% following an unscheduled trading update in which the shoemaker highlighted a challenging outlook for 2025 and indicated that its 2024 full-year results would align with estimates. At the same time, Telefonaktiebolaget Lm Ericsson (ERICB.S.DX) climbed more than +6% after the Swedish telecom equipment provider reported better-than-expected Q1 adjusted operating profit and gross margin.
U.K.’s Average Earnings ex Bonus, U.K.’s Claimant Count Change, U.K.’s Unemployment Rate, Italy’s CPI, Germany’s ZEW Economic Sentiment, and Eurozone’s ZEW Economic Sentiment data were released today.
U.K. February Average Earnings ex Bonus has been reported at 6.0%, stronger than expectations of 5.8%.
U.K. March Claimant Count Change stood at 10.9K, stronger than expectations of 17.2K.
U.K. February Unemployment Rate was at 4.2%, weaker than expectations of 4.0%.
The Italian March CPI arrived at 0.0% m/m and +1.2% y/y, weaker than expectations of +0.1% m/m and +1.3% y/y.
The German April ZEW Economic Sentiment came in at 42.9, stronger than expectations of 35.9.
Eurozone April ZEW Economic Sentiment was at 43.9, stronger than expectations of 37.2.
Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -1.65% and Japan’s Nikkei 225 Stock Index (NIK) closed down -1.94%.
China’s Shanghai Composite Index closed sharply lower today after a slew of economic indicators showed that the country’s economic rebound remains uneven. Consumer services and tech-software stocks underperformed on Tuesday. The National Bureau of Statistics said Tuesday that China’s economy grew at a sharper rate at the start of the year compared to the fourth quarter of 2023, beating analysts’ expectations. On the ground of this, Nomura revised its projection for China’s 2024 economic growth upward to 4.3% from 4.2%. At the same time, China’s retail sales growth slowed to its lowest level in 8 months in March, while industrial production growth also weakened during the same month. Separately, data released on Tuesday revealed that the decline in China’s new home sales narrowed in March, while new home prices fell at a softer pace than the previous month. Meanwhile, the offshore yuan dropped to its lowest level since November on Tuesday after the People’s Bank of China unexpectedly set a weaker daily reference rate for the managed currency. In corporate news, Wuhan Guide Infrared slumped about -9% after the company reported an 87% year-on-year drop in its 2023 profit to 67.7 million yuan.
The Chinese GDP has been reported at +5.3% y/y in the first quarter, stronger than expectations of +4.8% y/y.
The Chinese March Industrial Production stood at +4.5% y/y, weaker than expectations of +6.0% y/y.
The Chinese March Retail Sales came in at +3.1% y/y, weaker than expectations of +5.1% y/y.
The Chinese March Fixed Asset Investment arrived at +4.5% y/y, stronger than expectations of +4.0% y/y.
The Chinese March Unemployment Rate was at 5.2%, in line with expectations.
Japan’s Nikkei 225 Stock Index closed sharply lower today, hitting an 8-week low. Real estate, energy, and financial stocks led the declines on Tuesday. The Japanese yen remained under pressure on Tuesday following its drop to a new 34-year low against the dollar overnight. Japanese Finance Minister Shunichi Suzuki stated Tuesday that he was closely monitoring currency moves and would take a “thorough response as needed.” Meanwhile, Japanese government bond yields climbed on Tuesday, with the two-year yield reaching its highest level since 2009. In corporate news, J.Front Retailing plunged over -9% after the department store operator trimmed its full-year profit guidance. At the same time, Toho climbed more than +7% after the cinema operator reported a 35.5% increase in its annual net profit and announced a share buyback program. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up +6.20% to 22.09.
Pre-Market U.S. Stock Movers
Macatawa Bank (MCBC) surged about +39% in pre-market trading after Wintrust Financial agreed to acquire the company in an all-stock transaction valued at about $510.3 million.
Skillsoft (SKIL) plunged over -22% in pre-market trading after the company reported downbeat Q4 results and provided below-consensus FY25 revenue guidance.
Rivian Automotive (RIVN) rose more than +1% in pre-market trading after UBS upgraded the stock to Neutral from Sell.
Advanced Micro Devices (AMD) gained about +0.6% in pre-market trading after HSBC upgraded the stock to Buy from Hold with a $225 price target.
Kroger (KR) rose more than +1% in pre-market trading after Wells Fargo upgraded the stock to Overweight from Equal Weight with a price target of $65.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - April 16th
UnitedHealth (UNH), J&J (JNJ), Bank of America (BAC), Morgan Stanley (MS), PNC Financial (PNC), Interactive Brokers (IBKR), Bank of NY Mellon (BK), JB Hunt (JBHT), Omnicom (OMC), Northern Trust (NTRS), United Airlines Holdings (UAL), Commerce Bancshares (CBSH), Hancock Whitney (HWC), Fulton (FULT), Equity Bancshares Inc (EQBK).
More Stock Market News from Barchart
- 3 Gold Stocks to Buy as Israel Weighs Iran Response
- Stocks Retreat on Rising Bond Yields and Weakness in Megacap Tech Stocks
- 1 Breakout Small-Cap Agricultural Stock to Scoop Up Now
- 3 Defensive Stocks for 'Sell in May' Season
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.
/Nvidia%20logo%20and%20sign%20on%20headquarters%20by%20Michael%20Vi%20via%20Shutterstock.jpg)
/Gen%20Digital%20Inc%20logo%20on%20building-by%20Around%20the%20World%20Photos%20via%20Shutterstock.jpg)
