In the financial landscape, the morning report unveils a mixed performance in futures trading, with the June S&P 500 E-Mini futures experiencing a decline of -0.27%, and the June Nasdaq 100 E-Mini futures falling by -0.38%. This trend follows a session where major U.S. benchmark indices closed with varying results, as investors grappled with a myriad of corporate earnings reports and assessed the trajectory of Federal Reserve monetary policy.
Noteworthy movements in pre-market trading underscore the market’s volatility. Arm Holdings (ARM) witnessed a significant slump of over -7% after issuing tepid full-year revenue guidance. Similarly, Airbnb (ABNB) faced a notable decline of more than -7% following its weaker-than-expected revenue forecast for the current quarter. On the flip side, Robinhood Markets (HOOD) saw an increase of over +4% in pre-market trading, buoyed by its positive Q1 results in both stock and crypto trading.
Yesterday’s trading session was marked by substantial movements in several stocks. Uber Technologies (UBER) emerged as the top percentage loser on the S&P 500 after experiencing a decline of over -5%. The ride-hailing giant reported Q1 gross bookings below analysts’ estimates and provided a disappointing Q2 gross bookings forecast. Likewise, Intel (INTC) faced a decline of more than -2% on the Dow after tempering its Q2 revenue outlook due to a new U.S. ban on chip exports to Huawei Technologies Co. Meanwhile, Twilio (TWLO) plunged over -7% after offering below-consensus Q2 revenue guidance. On a positive note, Vistra Corp. (VST) soared by more than +9% after reporting stronger-than-expected Q1 adjusted EBITDA, while Arista Networks (ANET) witnessed an increase of over +6% following its upbeat Q1 results and solid Q2 sales forecast.
Economic data released on Wednesday revealed unexpected weakness in U.S. wholesale trade sales, which fell by -1.3% m/m in March, significantly below the expected increase of +0.8% m/m. Additionally, U.S. wholesale inventories declined by -0.4% m/m in March, aligning with expectations.
Boston Fed President Susan Collins emphasized the need for prolonged high-interest rates to curb demand and alleviate price pressures, highlighting the absence of significant progress in reducing inflationary pressures in 2024. Collins stressed the necessity of slower economic growth to maintain inflation on a sustainable trajectory towards the Fed’s 2% target.
Market sentiment remains cautiously optimistic as the Federal Reserve extends the timeline for potential interest rate cuts. U.S. rate futures currently reflect an 8.7% chance of a 25 basis point rate cut at June’s monetary policy meeting and a 29.2% probability of a similar cut at the July meeting.
In today’s trading, investors will closely monitor earnings releases from companies such as Warner Bros. Discovery (WBD), Constellation Energy (CEG), US Foods (USFD), Hyatt Hotels (H), Roblox (RBLX), Dropbox (DBX), and Genpact (G). Attention will also be on U.S. Initial Jobless Claims data, with economists estimating this figure to come in at 212K, compared to last week’s number of 208K. Furthermore, a speech from San Francisco Federal Reserve President Mary Daly is anticipated.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note stands at 4.521%, reflecting an increase of +0.80%.
Overseas, European markets, as indicated by the Euro Stoxx 50 futures, are down by -0.22% as investors pause following a four-day run of gains. Attention is now turning to the Bank of England’s policy-setting meeting later in the day. In Asia, stock markets settled with mixed results, with China’s Shanghai Composite Index (SHCOMP) closing up +0.83%, while Japan’s Nikkei 225 Stock Index (NIK) closed down -0.34%.
In China, positive sentiment was fueled by upbeat trade data and signs of support for the property sector. Customs data released on Thursday revealed growth in exports and imports in April, signaling the recovery of the world’s second-largest economy. Additionally, Hangzhou’s decision to remove all home-buying restrictions contributed to investor optimism.
Meanwhile, Japan’s Nikkei 225 Stock Index closed slightly lower, with semiconductor and electronics stocks underperforming. Weak economic indicators, including a decline in real wages and a decrease in the leading economic index for March, added to concerns.
Pre-market U.S. stock movers include Arm Holdings (ARM), Airbnb (ABNB), Applovin (APP), Bumble Inc (BMBL), Robinhood Markets (HOOD), and Select Energy Services (WTTR).
Today’s earnings spotlight features Warner Bros. Discovery (WBD), Constellation Energy (CEG), Roblox (RBLX), Wheaton Precious Metals (WPM), TELUS (TU), Pembina Pipeline (PBA), and others. Additionally, investors will keep a close eye on U.S. Initial Jobless Claims data and a speech from San Francisco Federal Reserve President Mary Daly.
In summary, while market sentiment remains cautiously optimistic amidst corporate earnings releases and monetary policy considerations, volatility persists, underscoring the need for investors to stay vigilant in navigating the dynamic financial landscape.