Morning Markets
June S&P 500 futures this morning are down by -0.74% and dropped to a 1-1/4 month low. U.S. stock indexes are falling today on negative carry-over from -5% plunge in China’s Shanghai Composite on concern the global economy will slow as China ramps up pandemic restrictions to contain a worsening Covid outbreak. Energy and commodity-producing stocks are falling in pre-market trading on demand concerns as crude prices are down more than -4% at a 1-1/2 week low, and copper is down more than -2% at a 1-3/4 month low. The weakness in stocks has fueled safe-haven buying of government debt and knocked the 10-year T-note down to a 1-week low at 2.804%.
The Euro Stoxx 50 index today fell to a 1-1/4 month low and is down by -1.57%. European stocks are sliding today with other global stock markets on concern a worsening Covid outbreak in China will derail the global economy and fuel higher inflation. Mixed corporate earnings results are also weighing on European stocks as Royal Philips NV tumbled -11% after Q1 operating profit came in below consensus as the company warned of persistent supply-chain pressures.
Eurozone Feb construction output rose +9.4% y/y, the biggest increase in 9 months.
The German Apr IFO business climate index unexpectedly rose +1.0 to 91.8, stronger than expectations of a decline to 89.0.
Asian markets today closed sharply lower. China’s Shanghai Stock Index plunged to a 1-3/4 year low and closed down by -5.13%, and Japan’s Nikkei Stock Index fell to a 1-1/2 week low and closed down by -1.90%. Chinese stocks tumbled on concern a worsening Covid outbreak will force the Chinese government to impose stricter pandemic restrictions and lockdowns that derail economic activity and growth. The yuan also fell to a 1-year low against the dollar.
Japanese stocks fell back today on concern a worsening Covid outbreak in China will undercut global growth and curb demand for Japanese exports. Increasing price pressures in Japan are also bearish for stocks after today’s news that the Japan Mar PPI services prices index rose +1.3% y/y, stronger than expectations of +1.2% y/y and the biggest increase in 10 months.
Pre-Market U.S. Stock Movers
Energy stocks and energy service providers are falling in pre-market trading, with the price of WTI crude down more than -4% at a 1-1/2 week low. Devon Energy (DVN), Halliburton (HAL), Marathon Oil (MRO), Occidental Petroleum (OXY), and Diamondback Energy (FANG) are all down more than -2%.
U.S.-listed Chinese stocks are weaker in pre-market trading as expanded Covid lockdown measures in major cities fueled concerns about China’s economic growth outlook. Pinduoduo (PDD) is down nearly -5%, Alibaba (BABA) is down more than -3%, and JD.com (JD), Baidu (BIDU), and NetEase (NTES) are down more than -2%.
Kellogg (K) slid more than -1% in pre-market trading after Deutsche Bank downgraded the stock to hold from buy.
Verizon Communications (VZ) is down more than -1% in pre-market trading after Goldman Sachs downgraded the stock to neutral from buy.
Deere & Co. (DE) dropped more than -3% in pre-market trading after Bank of America downgraded the stock to neutral from buy.
Shopify (SHOP) dropped -2% in pre-market trading after RBC Capital Markets lowered its price target o the stock to $1,000 from $1,300.
Meta Platforms (FB) slid -1% in pre-market trading after Mizuho Securities lowered its price target on the stock to $325 from $425.
AT&T (T) rose nearly +1% in pre-market trading after Goldman Sachs reinstated a buy rating on the stock.
Coca-Cola (KO) gained +0.5% in pre-market trading after reporting Q1 comparable EPS of 64 cents, better than the consensus of 58 cents.
Advanced Micro Devices (AMD) rose +0.5% in pre-market trading after Raymond James upgraded the stock to a strong buy from outperform.
Penn National Gaming (PENN) rose more than +1% in pre-market trading after Morgan Stanley upgraded the stock to overweight from equal-weight.
Today’s U.S. Earnings Reports (4/25/2022)
Activision Blizzard Inc (ATVI), Alexandria Real Estate Equities (ARE), Ameriprise Financial Inc (AMP), Brown & Brown Inc (BRO), Cadence Design Systems Inc (CDNS), Coca-Cola Co/The (KO), Otis Worldwide Corp (OTIS), Packaging Corp of America (PKG), SBA Communications Corp (SBAC), Universal Health Services Inc (UHS), W R Berkley Corp (WRB), Whirlpool Corp (WHR), Zions Bancorp NA (ZION).
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