Stocks Slip Ahead of Big-Tech Earnings Results

Morning Markets

June S&P 500 futures this morning are down by -0.51%.   The prospect of slower economic growth and persistent inflation is weighing on stock index futures today.  Strength in Q1 U.S. corporate earnings results is supportive for stocks, with close to 80% of companies that have reported have beaten quarterly earnings estimates.  The markets are looking ahead to earnings results from the big tech companies of Alphabet and Microsoft after today’s close. In a similar vein, Elon Musk's deal to buy Twitter (TWTR) has made headlines around the world. Both Twitter and Tesla (TSLA) have seen significant drops in trading prices this morning as compared to yesterday's close, with Tesla drooping about 9% and Twitter dropping about 4%.  Stock indexes rose from their worst levels after this morning’s data showed U.S. Mar capital goods orders nondefense ex-aircraft & parts rose more than expected.

U.S. Mar capital goods orders nondefense ex-aircraft & parts, a proxy for capital spending, rose +1.0% m/m, stronger than expectations of +0.5% m/m.

The Euro Stoxx 50 index today is up by +1.15%.  European stocks are moving moderately higher today, led by gains in miners and travel stocks.  Also, positive quarterly corporate earnings results support stock gains today, with UBS Group AG and A.P. Moller-Maersk A/S posting stronger-than-expected earnings.  Lower bond yields are another supportive factor for stocks after the 10-year German bund yield dropped to a 1-week low today. 

Reuters today reported that ECB Governing Council member Kazaks said the ECB should raise interest rates soon and has room for as many as three 25 bp rate hikes this year.

Asian markets today settled mixed.  China’s Shanghai Stock Index fell to a new 1-3/4 year low and closed down by -1.44%, and Japan’s Nikkei Stock Index closed up by +0.41%.  Chinese stocks Tuesday were under pressure for a second day on concern the surge in Covid infections in Beijing will prompt the government to impose a city-wide lockdown.  Energy stocks and commodity produces led decliners in China on concern the spread of Covid and pandemic restrictions will curb demand for fuel and commodities. 

Japanese stocks today posted moderate gains, led by strength in telecom stocks.  Also, signs of strength in Japan’s labor market are bullish for the economy and stocks after today’s data showed the Japan Mar jobless rate unexpectedly fell -0.1 to a 2-year low of 2.6%.  Japanese stocks also garnered support on a decline in government bond yields after the BOJ announced today that it would extend its unlimited bond buying this week into the 2-day BOJ policy meeting that begins on Thursday.

The Japan Mar jobless rate unexpectedly fell -0.1 to a 2-year low of 2.6%, showing a stronger labor market than expectations of 2.7%.

Pre-Market U.S. Stock Movers

Raytheon Technologies (RTX) slid nearly -2% in pre-market trading after it cut its full-year sales forecast to $67.75 billion to $68.75 billion from a prior view of $68.5 billion-$69.5 billion.

Universal Health Services (UHS) tumbled -12% in pre-market trading after it reported Q1 adjusted EPS of $2.15, well below the consensus of $2.45. 

Stellantis NV (STLA) fell more than -2% in pre-market trading after Bank of America downgraded the stock to neutral from buy. 

Polaris (PII) tumbled -8% in pre-market trading after it reported Q1 sales of $1.96 billion, below the consensus of $2.12 billion.

Nkarta (NKTX) dropped -8% in pre-market trading after offering 13.3 million shares of its stock via Cowen, SVB Financial Group, and Evercore partners at $15 a share, below Monday’s closing price of $18.72.

Redbox Entertainment (RDBX) rose more than +1% in pre-market trading after it disclosed that CFO Sutha had resigned.

Corning (GLW) jumped +9% in pre-market trading after reporting Q1 core sales of $3.74 billion, stronger than the consensus of $3.56 billion.

Sherwin-Williams (SHW) climbed +6% in pre-market trading after reporting Q1 net sales of $5.00 billion, above the consensus of $4.90 billion. 

Valero Energy (VLO) rose more than +3.0% in pre-market trading after reporting Q1 adjusted EPS of $2.31, well above the consensus of $1.66.

Warner Bros Discovery (WBD) is up more than +2.0% in pre-market trading after reporting Q1 EPS of 69 cents, stronger than the consensus of 27 cents.

Today’s U.S. Earnings Reports (4/26/2022)

3M Co (MMM), Allegion plc (ALLE), Alphabet Inc (GOOGL), Archer-Daniels-Midland Co (ADM), Avery Dennison Corp (AVY), Capital One Financial Corp (COF), Centene Corp (CNC), Chipotle Mexican Grill Inc (CMG), Chubb Ltd (CB), Corning Inc (GLW), DR Horton Inc (DHI), Ecolab Inc (ECL), Edwards Lifesciences Corp (EW), Enphase Energy Inc (ENPH), Equity Residential (EQR), Essex Property Trust Inc (ESS), F5 Inc (FFIV), General Electric Co (GE), General Motors Co (GM), IDEX Corp (IEX), Invesco Ltd (IVZ), Juniper Networks Inc (JNPR), Microsoft Corp (MSFT), Mondelez International Inc (MDLZ), MSCI Inc (MSCI), Northern Trust Corp (NTRS), NVR Inc (NVR), PACCAR Inc (PCAR), PepsiCo Inc (PEP), Raytheon Technologies Corp (RTX), Robert Half International Inc (RHI), Roper Technologies Inc (ROP), Sherwin-Williams Co/The (SHW), Teradyne Inc (TER), Texas Instruments Inc (TXN), UDR Inc (UDR), United Parcel Service Inc (UPS), Valero Energy Corp (VLO), Visa Inc (V), Warner Bros Discovery Inc (WBD), Waste Management Inc (WM).