The S&P 500 Index ($SPX) (SPY) this morning is up +0.97%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.56%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +1.22%.
US stock indexes this morning are moderately higher, with the Dow Jones Industrials climbing to a 1-1/2 week high. Better-than-expected Q1 earnings results are supporting stocks today. Stocks extended their gains after a weaker-than-expected US Apr S&P manufacturing PMI report knocked bond yields lower.
Danaher is up more than +6% after reporting better-than-expected Q1 sales. Also, Kimberly-Clark is up more than +5% after reporting Q1 net sales above consensus and raising its full-year organic set sales growth forecast to mid-single digits versus previous expectations of low-to mid-single-digit growth. General Motors is up more than +5% after reporting stronger-than-expected Q1 adjusted EPS and raising its full-year adjusted EPS estimate.
On the negative side, LKQ Corp is down more than -12% after reporting Q1 revenue below consensus. Also, MSCI Inc. is down more than -12% after reporting weaker-than-expected Q1 operating revenue. PepsiCo is down more than -2% after forecasting full-year organic revenue below consensus.
Q1 corporate earnings take center stage for stocks with 180 of the S&P 500 companies, or more than 40% of total capitalization, scheduled to report earnings this week, including four of the “Magnificent Seven” megacap technology companies. Tesla will report after the close today, Meta Platforms will report on Wednesday, and Alphabet and Microsoft will report on Thursday.
The US Apr S&P manufacturing PMI unexpectedly fell -2.0 to a 4-month low of 49.9 versus expectations of an increase to 52.0.
US Mar new home sales rose +8.8% m/m to a 6-month high of 693,000, stronger than expectations of 668,000.
The US Apr Richmond Fed manufacturing survey rose +4 to -7, stronger than expectations of -8.
The markets are discounting the chances for a -25 bp rate cut at 3% for the next FOMC meeting on April 30-May 1 and 14% for the following meeting on June 11-12.
Overseas stock markets today are mixed. The Euro Stoxx 50 rose to a 1-week high and is up +1.27%. China's Shanghai Composite closed down -0.74%. Japan's Nikkei Stock Index closed up +0.30%.
Interest Rates
June 10-year T-notes (ZNM24) this morning are up +8 ticks. The 10-year T-note yield is down -2.5 bp at 4.584%. T-notes prices today recovered from early losses and moved moderately higher after the US Apr S&P manufacturing PMI report unexpectedly contracted, a dovish factor for Fed policy. Today, t-notes initially opened lower due to stronger stocks. Also, supply pressures are negative for T-note prices as the Treasury will auction $69 billion of 2-year T-notes later today as part of this week’s $183 billion of T-note auctions.
European government bond yields today are moving higher. The 10-year German bund yield is up +0.7 bp at 2.492%. The 10-year UK gilt yield is up +4.2 bp to 4.246%.
The Eurozone Apr S&P manufacturing PMI unexpectedly fell -0.5 to 45.6, weaker than expectations of an increase to 46.5. However, the Apr composite PMI rose +1.1 to 51.4, stronger than expectations of 50.7 and the strongest pace of expansion in 11 months.
ECB Vice President de Guindos said, "If things move in the same direction as they have in recent weeks, the ECB will loosen its restrictive monetary policy stance in June.”
ECB Governing Council member and Bundesbank President Nagel said, "If the favorable inflation outlook from March is confirmed in the June forecast and the incoming data supports the forecast, the ECB can consider lowering interest rates."
US Stock Movers
Danaher (DHR) is up more than +6% after reporting Q1 sales of $5.80 billion, stronger than the consensus of $5.62 billion.
General Electric (GE) is up more than +5% after raising its GE Aerospace full-year operating profit estimate to $6.2 billion-$6.6 billion from a previous estimate of $6.0 billion-$6.5 billion.
Kimberly-Clark (KMB) is up more than +5% after reporting Q1 net sales of $5.15 billion, above the consensus of $5.08 billion, and raised its full-year organic set sales growth forecast to mid-single digits versus previous expectations of low-to mid-single-digit growth.
Fiserv (FISV) is up more than +5% after reporting Q1 adjusted EPS of $1.88, better than the consensus of $1.79.
General Motors (GM) is up more than +4% after reporting Q1 adjusted EPS of $2.62, stronger than the consensus of $2.12, and raising its full-year adjusted EPS estimate to $9.00-$10.00 from a previous estimate of $8.50-$9.50.
PulteGroup (PHM) is up more than +4% after reporting Q1 revenue of $3.95 billion, better than the consensus of $3.60 billion.
Hibbett (HIBB) is up more than +18% after JD Sports agreed to buy the company for about $1.1 billion, or about $87.50 per share.
MongoDB (MDB) is up more than +5% to lead gainers in the Nasdaq 100 after Loop Capital Markets rated the stock a new buy with a price target of $415.
LKQ Corp (LKQ) is down more than -12% to lead losers in the S&P 500 after reporting Q1 revenue of $3.70 billion, below the consensus of $3.76 billion.
MSCI Inc (MSCI) is down more than -12% after reporting Q1 operating revenue of $680.0 million, below the consensus of $685.2 million.
PepsiCo (PEP) is down more than -2% to lead losers in the Nasdaq 100 after forecasting full-year organic revenue up +4.00%, weaker than the consensus of +4.17%.
Nucor (NUE) is down more than -6% after reporting Q1 EPS of $3.46, below the consensus of $3.60.
Invesco Ltd (IVZ) is down more than -5% after reporting Q1 adjusted net revenue of $1.05 billion, weaker than the consensus of $1.08 billion.
Sherwin-Williams (SHW) is down more than -4% after reporting Q1 adjusted EPS of $2.17, weaker than the consensus of $2.2, and forecasting full-year adjusted EPS of $10.85-$11.35, below the consensus of $11.45.
Cleveland-Cliffs (CLF) is down more than -7% after reporting Q1 revenue of $5.20 billion, weaker than the consensus of $5.32 billion.
Cadence Design Systems (CDNS) is down more than -1% after forecasting Q2 adjusted EPS of $1.20-$1.24, weaker than the consensus of $1.43.
Earnings Reports (4/23/2024)
Baker Hughes Co (BKR), Chubb Ltd (CB), CoStar Group Inc (CSGP), Danaher Corp (DHR), Enphase Energy Inc (ENPH), EQT Corp (EQT), Equity Residential (EQR), Fiserv Inc (FI), Freeport-McMoRan Inc (FCX), General Electric Co (GE), General Motors Co (GM), Halliburton Co (HAL), IDEX Corp (IEX), Invesco Ltd (IVZ), Kimberly-Clark Corp (KMB), LKQ Corp (LKQ), Lockheed Martin Corp (LMT), MSCI Inc (MSCI), NextEra Energy Inc (NEE), NVR Inc (NVR), Pentair PLC (PNR), PepsiCo Inc (PEP), Philip Morris International In (PM), PulteGroup Inc (PHM), Quest Diagnostics Inc (DGX), RTX Corp (RTX), Seagate Technology Holdings PL (STX), Sherwin-Williams Co/The (SHW), Steel Dynamics Inc (STLD), Tesla Inc (TSLA), Texas Instruments Inc (TXN), United Parcel Service Inc (UPS), Veralto Corp (VLTO), Visa Inc (V), W R Berkley Corp (WRB).
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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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