June S&P 500 futures (ESM23) are up +0.46%, and June Nasdaq 100 E-Mini futures (NQM23) are up +0.79% this morning as market participants digested consensus-beating results from Meta Platforms while awaiting U.S. GDP reading to gauge the strength of the U.S. economy.
Meta Platforms Inc (META) soared over +11% in pre-market trading after the company reported upbeat Q1 results due to a better-than-expected ad recovery at its flagship Facebook platform. Also, the social media giant provided better-than-expected Q2 revenue guidance amid ongoing progress to reduce costs.
In Wednesday’s trading session, the tech-heavy Nasdaq 100 outperformed major benchmarks, helped by a more than +7% surge in Microsoft Corporation (MSFT) after the software giant reported upbeat third-quarter results. At the same time, the benchmark S&P 500 and blue-chip Dow dropped to 3-1/2 week lows as concerns over the stability of the regional banking space continued to weigh on sentiment. First Republic Bank (FRC) plunged over -29%, hitting another record low, on a report that the U.S. government was reluctant to intervene in the rescue process. Also, Bloomberg News reported that U.S. bank regulators were weighing the prospect of downgrading their assessments of First Republic Bank, which could limit the bank’s access to Federal Reserve lending facilities.
“It’s really Nasdaq’s turn to shine because of good results from Alphabet and Microsoft. People are more optimistic about the outlook for technology once again,” said Brian Jacobson, a senior investment strategist at Allspring Global Investments.
Economic data on Wednesday showed U.S. Goods Orders Non-Defense Ex Air fell -0.4% m/m in March, weaker than expectations of -0.1% m/m. At the same time, U.S. Durable Goods Orders stood at +3.2% m/m in March, stronger than expectations of +0.7% m/m. Also, U.S. March Core Durable Goods Orders came in at +0.3% m/m, stronger than expectations of -0.2% m/m.
U.S. rate futures have priced in a 74.7% probability of a 25 basis point rate increase and a 25.3% chance of no hike at the May meeting.
First-quarter earnings season rolls on, and investors anticipate new reports from major global companies today, including Amazon.com (AMZN), Mastercard (MA), Eli Lilly (LLY), Merck&Co (MRK), AbbVie (ABBV), T-Mobile US (TMUS), and Intel (INTC). Analysts expect aggregate S&P 500 earnings to decline 3.2% year-over-year in the first quarter, compared with an expected drop of 5.1% at the start of April.
Today, all eyes are focused on the U.S. GDP preliminary data in a couple of hours. Economists, on average, forecast that U.S. GDP will stand at +2.0% q/q in the first quarter, compared to the fourth-quarter value of +2.6% q/q.
Also, investors will likely focus on the U.S. GDP Price Index, which came in at +3.9% q/q in the fourth quarter. Economists foresee the first-quarter figure to be +3.7% q/q.
U.S. Pending Home Sales data will also be closely watched today. Economists foresee this figure to stand at +0.5% m/m in March, compared to the previous number of +0.8% m/m.
U.S. Initial Jobless Claims data will be reported today as well. Economists estimate this figure to be 248K, compared to last week’s value of 245K.
In the bond markets, United States 10-Year rates are at 3.469%, up +1.15%.
The Euro Stoxx 50 futures are up +0.42% this morning as investors assessed a deluge of corporate earnings reports. Media stocks underperformed, while shares of healthcare companies gained ground, with AstraZeneca Plc (AZN.L.EB) rising about +1% after the company reported better-than-expected Q1 results. Banking shares also outperformed, led by a more than +4% climb in Barclays Plc (BARC.LN) after the U.K. banking giant posted a 9% gain in fixed-income trading revenue. In other earnings news, Unilever Plc (ULVR.L.EB) gained over +1% after the company topped sales growth expectations in Q1.
Spain’s Retail Sales, Italy’s Business Confidence, Italy’s Consumer Confidence, and Eurozone’s Consumer Confidence data were released today.
The Spanish March Retail Sales stood at +9.5% y/y, stronger than expectations of +0.7% y/y.
The Italian April Business Confidence came in at 103.0, weaker than expectations of 104.0.
The Italian April Consumer Confidence was at 105.5, in line with expectations.
Eurozone April Consumer Confidence has been reported at -17.5, in line with expectations.
Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.67%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.15%.
China’s Shanghai Composite today closed higher, rebounding slightly after plunging for the past six sessions as market participants continued to weigh geopolitical tensions and industrial profit data. The National Bureau of Statistics said Thursday that the Chinese industrial profit narrowed to -21.4% in the January-March period from a year earlier as export demand rebounded and Beijing continued its support for the economic recovery. Meanwhile, Chinese investors welcomed President Xi Jinping’s phone call with Ukraine leader Volodymyr Zelenskiy on Wednesday for the first time since Russia’s invasion of Ukraine. However, tensions with the United States continued as U.S. Commerce Secretary Gina Raimondo said on Wednesday that Chinese cloud computing companies like Huawei Cloud and Alibaba Cloud could pose a threat to U.S. security, pledging to examine a proposal to add them to an export control list.
Japan’s Nikkei 225 Stock Index reversed an early drop and closed slightly higher, boosted by manufacturers on earnings optimism. Hitachi Construction Machinery Co. climbed over +3% after the heavy equipment maker said its full-year operating profit surged 45%. At the same time, Nomura Holdings plunged more than -7% after the biggest Japanese brokerage and investment bank reported a 76% drop in quarterly profit. Also, Advantest tumbled over -9% after the chip-testing equipment maker’s earnings forecast fell short of expectations. Focus is now squarely on Japan’s inflation data and new Bank of Japan governor Kazuo Ueda’s first policy decision on Friday. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up 3.38% to 16.82.
Pre-Market U.S. Stock Movers
Atomera Inc (ATOM) surged more than +34% in pre-market trading after the company announced the execution of a commercial license agreement with STMicroelectronics.
Roku Inc (ROKU) rose about +3% in pre-market trading after the company reported better-than-expected Q1 results.
eBay Inc (EBAY) gained over +3% in pre-market trading after the company reported upbeat Q1 results and posted above-consensus Q2 guidance.
Wolfspeed Inc (WOLF) plunged more than -13% in pre-market trading after the company posted upbeat Q3 results but issued weaker-than-expected Q4 guidance.
Vornado Realty Trust (VNO) tumbled about -14% in pre-market trading after the company announced it would postpone dividends on its common shares until the end of 2023. Also, Piper Sandler downgraded the stock to underweight from neutral with a price target of $11, down from $16.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - April 27th
Amazon.com (AMZN), Mastercard (MA), Eli Lilly (LLY), Merck&Co (MRK), AbbVie (ABBV), T-Mobile US (TMUS), Linde PLC (LIN), Comcast (CMCSA), Bristol-Myers Squibb (BMY), Amgen (AMGN), Honeywell (HON), Intel (INTC), Caterpillar (CAT), S&P Global (SPGI), Gilead (GILD), Mondelez (MDLZ), Altria (MO), Northrop Grumman (NOC), Pernod Ricard (PRNDY), Hershey Co (HSY), Keurig Dr Pepper (KDP), DexCom (DXCM), Roper Technologies (ROP), Arthur J Gallagher (AJG), Republic Services (RSG), Valero Energy (VLO), STMicroelectronics ADR (STM), Xcel Energy (XEL), Seagen (SGEN), Newmont Goldcorp (NEM), L3Harris Technologies (LHX), Capital One Financial (COF), Mobileye Global (MBLY), IQVIA Holdings (IQV), WW Grainger (GWW), ResMed (RMD), Fidelity National Info (FIS), Rockwell Automation (ROK), Digital (DLR), Agnico Eagle Mines (AEM), Tractor Supply (TSCO), West Pharmaceutical Services (WST), Willis Towers Watson (WTW), DTE Energy (DTE), Baxter (BAX), FirstEnergy (FE), Church&Dwight (CHD), VeriSign (VRSN), First Solar (FSLR), Weyerhaeuser (WY), Hartford (HIG), Cloudflare (NET), CenterPoint Energy (CNP), Southwest Airlines (LUV), Pinterest (PINS), Fair Isaac (FICO), CMS Energy (CMS), Principal Financial (PFG), Quest Diagnostics (DGX), Tradeweb Markets (TW), Cincinnati Financial (CINF), Snap (SNAP), LPL Financial (LPLA), LKQ (LKQ), IPG (IPG), Sirius XM (SIRI), Reliance Steel&Aluminum (RS), Essex Property (ESS), Essex Property (ESS), SS&Cs (SSNC), Textron (TXT), Gfl Environmental (GFL), International Paper (IP), Domino’s Pizza Inc (DPZ), Healthpeak Properties (PEAK), Kimco Realty (KIM), Camden Property (CPT), Erie Indemnity (ERIE), Carlisle (CSL), CubeSmart (CUBE), AO Smith (AOS), Eastman Chemical (EMN), Crocs (CROX), Lennox (LII), Lincoln Electrics (LECO), Pentair (PNR), American Airlines (AAL), Skechers (SKX), Lear (LEA), Kinsale Capital (KNSL), AptarGroup (ATR), National Instruments (NATI), Wex (WEX), EMCOR (EME), Old Republic (ORI), Hasbro (HAS), Olin (OLN), Cullen/Frost Bankers (CFR), FTI Consulting (FCN), Encompass Health (EHC), Mohawk Industries (MHK), Brunswick (BC), First American (FAF), TechnipFMC (FTI), ExlServices (EXLS), Harley-Davidson (HOG), United States Steel (X), Columbia Sportswear (COLM), Southwestern Energy (SWN), Applied Industrial Technologies (AIT), South State (SSB), Oshkosh (OSK), Hilton Grand Vacations (HGV), Hertz Global Holdings (HTZ), Medical Properties (MPW), Exponent (EXPO), Schneider National (SNDR), Casella (CWST), FirstCash (FCFS), Ascendis Pharma AS (ASND), Appfolio Inc (APPF), Valley National (VLY), Allison Transmission (ALSN), WNS Holdings (WNS), Visteon (VC), Chemours Co (CC), Kirby (KEX), Stericycle (SRCL), PTC Therapeutics (PTCT), Boston Beer (SAM), TAL Education (TAL), Federated Investors B (FHI), Alteryx (AYX), Millicom (TIGO), SM Energy (SM), PennyMac Financial (PFSI), Cousins Properties (CUZ), California Water Service (CWT), Rogers (ROG), Arcosa (ACA), CNX Resources (CNX), TRI Pointe Homes (TPH), Integer Hld (ITGR), Hub Group (HUBG), CBIZ (CBZ), Corporate Office Properties (OFC), Carpenter Technology (CRS), Ameris (ABCB), Arch Resources (ARCH), Strategic Education (STRA), Axos Financial (AX), Ardagh Metal Packaging (AMBP), Tanger Factory Outlet Centers (SKT), Eldorado Gold (EGO), Barnes (B).
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