The S&P 500 Index ($SPX) (SPY) this morning is up +0.51%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.39%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.75%.
US stock indexes this morning are climbing on positive carryover from Wednesday when Fed Chair Powell said it’s unlikely the Fed’s next move would be to raise interest rates. Stock indexes maintained their advance even after weekly jobless claims rose less than expected, and Q1 unit labor costs rose more than expected as productivity slowed, hawkish factors for Fed policy. Stocks are awaiting earnings results from Apple after today’s close.
Stocks also garnered support today after the Organization for Economic Cooperation and Development (OECD) raised its 2024 global growth forecast to +3.1% from a February estimate of +2.9% and said risks are becoming "better balanced."
Corporate earnings results today are mixed. On the positive side, CH Robinson Worldwide is up more than +16% after reporting better-than-expected Q1 revenue. Also, Howmet Aerospace is up more than +13% after reporting Q1 revenue above consensus and raising its full-year revenue forecast. In addition, Qualcomm is up more than +9% after reporting better-than-expected Q2 adjusted EPS and forecasting Q3 adjusted EPS above consensus.
On the negative side, Etsy is down more than -17% after reporting Q1 gross merchandise sales below consensus. Also, Qorvo is down more than -10% after forecasting Q1 adjusted EPS below consensus. In addition, Paycom Software is down more than -10% after forecasting Q2 revenue below consensus.
Q1 earnings results have been mostly better than expected, a supportive factor for stocks. Q1 earnings are now expected to climb +4.7% from a year ago, compared with the pre-earnings season estimate of +3.8%. According to data compiled by Bloomberg Intelligence, about 81% of the S&P 500 companies that have already reported have beaten Q1 earnings estimates.
Weekly US initial unemployment claims were unchanged at 208,000, showing a stronger labor market than expectations of an increase to 211,000.
US Q1 nonfarm productivity rose +0.3%, weaker than expectations of +0.5%. Q1 unit labor costs rose +4.7%, stronger than expectations of +4.0%.
The markets are discounting the chances for a -25 bp rate cut at 10% for the June 11-12 FOMC meeting and 32% for the following meeting on July 30-31.
Overseas stock markets today are lower. The Euro Stoxx 50 fell to a 1-1/2 week low and is down by -0.26%. China's Shanghai Composite was closed for the Labor Day holiday. Japan's Nikkei Stock Index closed down -0.10%.
Interest Rates
June 10-year T-notes (ZNM24) this morning are down -7 ticks. The 10-year T-note yield is up +1.3 bp to 4.641%. Jun T-notes today gave up an overnight advance and are moderately lower after US economic reports showed weekly initial unemployment claims rose less than expected and Q1 unit labor costs rose more than expected, hawkish factors for Fed policy. T-notes today initially moved higher on positive carryover from Wednesday when Fed Chair Powell said it was “unlikely” that the next rate move by the Fed would be a rate hike.
European government bond yields today are lower. The 10-year German bund yield is down -2.8 bp at 2.555%. The 10-year UK gilt yield is down -6.3 bp at 4.303%.
US Stock Movers
CH Robinson Worldwide (CHRW) is up more than +16% to lead gainers in the S&P 500 after reporting Q1 revenue of $4.41 billion, stronger than the consensus of $4.27 billion.
Howmet Aerospace (HWM) is up more than +13% after reporting Q1 revenue of $1.82 billion, better than the consensus of $1.74 billion, and raising its full-year revenue forecast to $7.23 billion-$7.38 billion from a previous forecast of $7.00 billion-$7.20 billion, stronger than the consensus of $7.15 billion.
Qualcomm (QCOM) is up more than +9% to lead gainers in the Nasdaq 100 after reporting Q2 adjusted EPS of $2.44, stronger than the consensus of $2.32, and forecasting Q3 adjusted EPS of $2.15-$2.35, the midpoint above the consensus of $2.16.
MGM Resorts International (MGM) is up more than +7% after reporting Q1 net revenue of $4.38 billion, stronger than the consensus of $4.24 billion.
Moderna (MRNA) is up more than +5% after reporting a Q1 loss of -$3.07 per share, smaller than the consensus of -$3.58 per share.
Becton Dickson & Co (BDX) is up more than +3% after reporting Q2 adjusted EPS of $3.17, stronger than the consensus of $2.97, and raising its full-year adjusted EPS forecast to $12.95-$13.15 from a prior forecast of $12.82-$13.06.
Carvana (CVNA) is up more than +36% after reporting Q1 revenue of $3.06 billion, well above the consensus of $2.68 billion.
Etsy (ETSY) is down more than -17% to lead losers in the S&P 500 after reporting Q1 gross merchandise sales of $2.99 billion, below the consensus of $3.02 billion.
Qorvo (QRVO) is down more than -11% after forecasting Q1 adjusted EPS of 60 cents to 80 cents, well below the consensus of $1.29.
Paycom Software (PAYC) is down more than -10% after forecasting Q2 revenue of $434 million-$438 million, weaker than the consensus of $442.2 million.
Huntington Ingalls Industries (HII) is down more than -9% after reporting Q1 negative free cash flow of -$274 million, wider than the consensus of -$196.6 million.
DoorDash (DASH) is down more than -12% to lead losers in the Nasdaq 100 after forecasting Q2 adjusted Ebitda of $325 million-$425 million, well below the consensus of $394.4 million.
Stanley Black & Decker (SWK) is down more than -7% after forecasting full-year adjusted EPS of $3.0-$4.50, the midpoint below the consensus of $4.19.
Linde Plc (LIN) is down more than -5% after reporting Q1 sales of $8.1 billion, below the consensus of $8.4 billion.
Earnings Reports (5/2/2024)
AES Corp/The (AES), Alliant Energy Corp (LNT), Ameren Corp (AEE), AMETEK Inc (AME), Amgen Inc (AMGN), Apple Inc (AAPL), Aptiv PLC (APTV), Baxter International Inc (BAX), Becton Dickinson & Co (BDX), Booking Holdings Inc (BKNG), BorgWarner Inc (BWA), Camden Property Trust (CPT), Cardinal Health Inc (CAH), Church & Dwight Co Inc (CHD), Cigna Group/The (CI), ConocoPhillips (COP), Consolidated Edison Inc (ED), Coterra Energy Inc (CTRA), Cummins Inc (CMI), DaVita Inc (DVA), Digital Realty Trust Inc (DLR), Dominion Energy Inc (D), EOG Resources Inc (EOG), Exelon Corp (EXC), Expedia Group Inc (EXPE), Federal Realty Investment Trust (FRT), Fortinet Inc (FTNT), Hologic Inc (HOLX), Howmet Aerospace Inc (HWM), Huntington Ingalls Industries (HII), Illumina Inc (ILMN), Ingersoll Rand Inc (IR), Intercontinental Exchange Inc (ICE), IQVIA Holdings Inc (IQV), Iron Mountain Inc (IRM), Kellanova (K), Kimco Realty Corp (KIM), Linde PLC (LIN), Live Nation Entertainment Inc (LYV), Moderna Inc (MRNA), Monster Beverage Corp (MNST), Moody's Corp (MCO), Motorola Solutions Inc (MSI), Parker-Hannifin Corp (PH), Pinnacle West Capital Corp (PNW), Pioneer Natural Resources Co (PXD), Quanta Services Inc (PWR), Regency Centers Corp (REG), Regeneron Pharmaceuticals Inc (REGN), Southern Co/The (SO), Stanley Black & Decker Inc (SWK), Targa Resources Corp (TRGP), Teleflex Inc (TFX), Vulcan Materials Co (VMC), Westrock Co (WRK), Xylem Inc/NY (XYL), Zimmer Biomet Holdings Inc (ZBH), Zoetis Inc (ZTS).
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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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