The June S&P 500 E-Mini futures (ESM24) are down -0.12% this morning as market participants brace themselves for earnings releases from major U.S. banks.
In yesterday’s trading session, Wall Street’s major indexes closed with mixed results, with the tech-heavy Nasdaq 100 reaching a 1-week high. Paramount (PARA) saw a significant increase of over +7%, emerging as the top gainer on the S&P 500, following reports from Adweek suggesting that the company is exploring the sale of its VidCon unit. Additionally, Apple (AAPL) experienced a gain of more than +4%, claiming the top spot on the Dow, after Bloomberg reported that the company intends to focus the next version of its M-family chips on artificial intelligence to bolster Mac sales. Meanwhile, Atlassian (TEAM) surged over +4%, becoming the top gainer on the Nasdaq 100, following Barclays’ upgrade of the stock to Overweight from Equal Weight with a price target of $275. However, Fastenal (FAST) faced a setback, plummeting more than -6% and emerging as the top loser on the Nasdaq 100 after reporting weaker-than-expected Q1 results.
On the economic front, Thursday’s data revealed that the U.S. March producer price index came in at +0.2% m/m and +2.1% y/y, slightly below expectations. Additionally, the U.S. core PPI, excluding food and energy, rose +2.4% y/y in March, surpassing expectations. Moreover, the number of Americans filing for initial jobless claims fell by -11K to a 5-week low of 211K, exceeding expectations.
Quincy Krosby, Chief Global Strategist at LPL Financial, commented on the PPI data, stating that the slightly lower-than-expected headline number helped ease market concerns regarding broad-based inflation pressures on supply chain prices and consumer prices.
New York Fed President John Williams emphasized that while the Fed has made significant progress towards achieving better balance on inflation and employment goals, there is no immediate need for rate cuts. Similarly, Richmond Fed President Thomas Barkin suggested that the central bank still has room to contain price pressures and can afford to take its time before considering lowering interest rates. Boston Fed President Susan Collins echoed these sentiments, indicating that building confidence necessary for policy easing might take longer than anticipated, potentially resulting in fewer rate reductions this year.
Looking ahead, U.S. rate futures have priced in a 6.6% chance of a 25 basis point rate cut at the next central bank meeting in May and a 22.9% probability of a similar rate cut at June’s policy meeting.
As the first-quarter corporate earnings season gains momentum, big banks such as JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C), along with asset manager BlackRock (BLK), are scheduled to release their quarterly results today.
Economically, all eyes are on the U.S. Michigan Consumer Sentiment preliminary reading, with economists forecasting a value of 79.0 in April. Additionally, the U.S. Export and Import Price Indexes for March will be reported today.
Market participants will also be attentive to speeches from Atlanta Fed President Raphael Bostic and San Francisco Fed President Mary Daly.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note stands at 4.543%, down -0.72%.
Meanwhile, Euro Stoxx 50 futures are up +1.06% this morning, fueled by optimism following hints from the European Central Bank suggesting potential interest rate cuts as early as June. Mining, energy, and technology stocks led gains on Friday.
In corporate news, German battery manufacturer Varta Ag (VAR1.D.DX) saw a significant decline of over -28% after announcing that its restructuring efforts would not lead to profitability by 2026.
Additionally, today’s economic releases include U.K.’s GDP, Industrial Production, Manufacturing Production, and Monthly GDP 3M/3M Change, as well as CPI data from Germany, France, and Spain.
Asian stock markets concluded the day with mixed results, with China’s Shanghai Composite Index (SHCOMP) closing down -0.49% and Japan’s Nikkei 225 Stock Index (NIK) closing up +0.21%.
China’s Shanghai Composite Index experienced losses today, primarily driven by declines in energy and property stocks. Customs data revealed a 7.5% year-on-year decrease in China’s exports for March, coupled with an unexpected contraction of -1.9% year-on-year in imports, both significantly below market expectations.
Japan’s Nikkei 225 Stock Index closed slightly higher, with real estate stocks leading gains. Mitsui Fudosan surged over +7% following the announcement of business plans that included a buyback, a return-on-equity target, and a payout ratio. However, Japan’s industrial production was revised down in February, and the Japanese yen remained stable after recent declines against the dollar.
In pre-market trading, notable stock movers include Advanced Micro Devices (AMD) and Intel (INTC), both down over -1%, following reports that Chinese officials directed the country’s biggest telecom carriers to phase out foreign chips core to their networks by 2027. Conversely, OncoCyte (OCX) soared about +52% after announcing a partnership with Bio-Rad for the global launch of its GraftAssure assay for organ transplant monitoring. Conversely, Applied Digital (APLD) slumped over -9% after reporting weaker-than-expected Q3 results, while Argan (AGX) climbed more than +11% following upbeat Q4 results.
Today’s earnings spotlight includes JPMorgan (JPM), Wells Fargo (WFC), BlackRock (BLK), Citigroup (C), State Street (STT), Bank7 (BSVN), and KULR Technology Group (KULR).
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