June S&P 500 E-Mini futures (ESM24) are up +0.58%, and June Nasdaq 100 E-Mini futures (NQM24) are up +0.77% this morning after Federal Reserve Chair Jerome Powell appeared to rule out the possibility of further interest-rate hikes, while investors looked ahead to a new round of U.S. economic data and an earnings report from tech giant Apple.
As widely expected, yesterday the Federal Reserve kept interest rates steady for the sixth straight meeting, leaving the federal funds rate target range at 5.25%-5.50%, the highest since 2001. The central bank noted that there “has been a lack of further progress toward its 2% inflation goal in recent months.” “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent,” the Fed said in its monetary policy statement on Wednesday. Fed officials also detailed plans to slow the pace at which the central bank is reducing its asset portfolio. The Fed will reduce the cap on runoff for Treasuries to $25 billion per month from $60 billion beginning in June. “So far this year, the data have not given us greater confidence” that interest rate cuts are appropriate, Fed Chair Jerome Powell said during the post-meeting press conference. Powell added that gaining confidence to reduce interest rates will require more time than initially anticipated. However, the central bank chief also said it was unlikely that the Fed’s next move would be a rate hike.
In yesterday’s trading session, Wall Street’s major averages closed mixed. CVS Health Corp. (CVS) tumbled over -16% and was the top percentage loser on the S&P 500 after the pharmacy chain posted downbeat Q1 results and slashed its full-year adjusted EPS forecast. Also, Starbucks (SBUX) plunged more than -15% and was the top percentage loser on the Nasdaq 100 after the coffee giant reported a decline in Q2 same-store sales for the first time since 2020 and cut its full-year guidance. In addition, Advanced Micro Devices (AMD) slid over -8% after the chipmaker offered softer-than-expected Q2 revenue guidance. On the bullish side, Bio-Techne (TECH) surged more than +16% and was the top percentage gainer on the S&P 500 after reporting stronger-than-expected Q3 results. Also, Amazon.com (AMZN) rose over +2% after the e-commerce and tech giant reported upbeat Q1 results.
The ADP National Employment report on Wednesday showed private payrolls rose by 192K jobs in April, exceeding the consensus figure of 179K but easing from the 208K jobs added in March (revised from 184K). Also, the U.S. March JOLTS job openings fell to a 3-year low of 8.488M, weaker than expectations of 8.680M. In addition, the U.S. ISM manufacturing index edged down to 49.2 in April, while the ISM prices paid sub-index unexpectedly rose to a 1-3/4 year high of 60.9 in April. Finally, U.S. March construction spending fell -0.2% m/m, weaker than expectations of +0.3 % m/m.
Meanwhile, U.S. rate futures have priced in a 14.5% chance of a 25 basis point rate cut at the next FOMC meeting in June and a 29.2% chance of a 25 basis point rate cut at July’s monetary policy meeting.
First-quarter corporate earnings season rolls on, and investors await fresh reports from notable companies today, including Apple (AAPL), ConocoPhillips (COP), Amgen (AMGN), Booking Holdings (BKNG), and Fortinet (FTNT).
On the economic data front, investors will likely focus on U.S. Initial Jobless Claims data due later in the day. Economists estimate this figure to come in at 212K, compared to last week’s number of 207K.
U.S. Unit Labor Costs and Nonfarm Productivity preliminary data will also be closely watched today. Economists forecast Q1 Unit Labor Costs to be at +3.6% q/q and Q1 Nonfarm Productivity to stand at +0.8% q/q, compared to the fourth-quarter numbers of +0.4% q/q and +3.2% q/q, respectively.
U.S. Factory Orders data will come in today. Economists expect March’s figure to be +1.6% m/m, compared to the previous number of +1.4% m/m.
U.S. Trade Balance data will be reported today as well. Economists foresee this figure to stand at -$69.50B in March, compared to the previous figure of -$68.90B.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.611%, up +0.41%.
The Euro Stoxx 50 futures are down -0.59% this morning as trading resumed following the Labor Day holiday, with investors digesting a slew of earnings updates and economic data. Energy stocks lost ground on Thursday, while bank stocks outperformed. A survey showed on Thursday that the ongoing downturn in Eurozone manufacturing activity deepened in April as new orders declined at the sharpest rate in the year-to-date. Meanwhile, European Central Bank Governing Council member Pablo Hernandez de Cos stated on Wednesday that the central bank is gaining more confidence that Eurozone inflation can reach its 2% target by mid-2025 following a choppy few months between now and then. In corporate news, ING Groep N.V. (INGA.NA) climbed over +5% after the Dutch bank reported solid Q1 results and announced a 2.5 billion euros ($2.7 billion) share buyback. Also, Standard Chartered Plc (STAN.LN) gained more than +5% after posting a first-quarter profit beat. In addition, Shell Plc (SHEL.LN) rose about +1% after the energy producer reported better-than-expected Q1 profit and announced a $3.5 billion share buyback. At the same time, Vestas Wind Systems A/S (VWS.C.DX) slid more than -2% after the world’s largest wind turbine maker posted a surprise Q1 loss.
Spain’s Manufacturing PMI, Italy’s Manufacturing PMI, France’s Manufacturing PMI, Germany’s Manufacturing PMI, and Eurozone’s Manufacturing PMI data were released today.
The Spanish April Manufacturing PMI came in at 52.2, stronger than expectations of 51.3.
The Italian April Manufacturing PMI stood at 47.3, weaker than expectations of 50.3.
The French April Manufacturing PMI was at 45.3, stronger than expectations of 44.9.
The German April Manufacturing PMI has been reported at 42.5, stronger than expectations of 42.2.
Eurozone April Manufacturing PMI arrived at 45.7, stronger than expectations of 45.6.
Japan’s Nikkei 225 Stock Index (NIK) closed down -0.10%, while mainland Chinese markets were closed for a holiday.
China’s Shanghai Composite Index was closed for the Labor Day holiday. Mainland China’s financial markets will reopen on Monday, May 6th.
Japan’s Nikkei 225 Stock Index closed lower for a second consecutive day on Thursday as volatility in the yen and a mixed performance on Wall Street overnight kept market sentiment muted. Automobile and electronics stocks underperformed on Thursday while trading house stocks gained ground. The Cabinet Office reported Thursday that Japan’s Consumer Confidence Index slipped in April. Meanwhile, the Japanese yen dropped as much as 1.1% against the dollar following a surge in New York late Wednesday. The renewed decline indicates investor skepticism regarding Japanese authorities’ ability to prevent the currency from weakening. In other news, the minutes of the Bank of Japan’s March policy meeting showed on Thursday that numerous central bank board members supported the idea of allowing the country’s long-term interest rates to be set by markets, with some members suggesting that the central bank should at some point slow the pace of bond purchases. In corporate news, Sumitomo Corp. climbed over +4% after projecting a 37% increase in fiscal-year net profit and announcing a share buyback. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed down -3.63% to 19.91.
The Japanese April Household Confidence stood at 38.3, weaker than expectations of 39.7.
Pre-Market U.S. Stock Movers
Carvana (CVNA) surged about +33% in pre-market trading after the e-commerce platform for buying and selling used cars reported “best in company history” quarterly results and said it expects a sequential increase in Q2 adjusted EBITDA.
IAC Inc. (IAC) gained more than +7% in pre-market trading after S&P Dow Jones Indices announced that the company would replace American Equity Investment Life Holding Company in the S&P SmallCap 600 on May 6th.
Qualcomm (QCOM) climbed over +4% in pre-market trading after the semiconductor firm posted upbeat Q2 results and provided solid Q3 guidance.
The Trade Desk (TTD) advanced more than +3% in pre-market trading after Jefferies upgraded the stock to Buy from Hold with a price target of $105, up from $95.
Etsy (ETSY) slid over -11% in pre-market trading after reporting downbeat Q1 results.
Fastly (FSLY) plummeted more than -32% in pre-market trading after the company posted mixed Q1 results and lowered its full-year guidance.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Thursday - May 2nd
Apple (AAPL), Amgen (AMGN), ConocoPhillips (COP), Booking (BKNG), Cigna (CI), Regeneron Pharma (REGN), Southern (SO), Canadian Natural (CNQ), EOG Resources (EOG), ICE (ICE), MercadoLibre (MELI), Zoetis Inc (ZTS), Parker-Hannifin (PH), Moody’s (MCO), Becton Dickinson (BDX), Pioneer Natural (PXD), Apollo Global Management A (APO), Motorola (MSI), Monster Beverage (MNST), Coinbase Global (COIN), Fortinet (FTNT), Digital (DLR), Dominion Energy (D), Moderna (MRNA), IQVIA Holdings (IQV), Block (SQ), Ares Management (ARES), Ametek (AME), Cummins (CMI), Exelon (EXC), Quanta Services (PWR), Ingersoll Rand (IR), Vulcan Materials (VMC), Consolidated Edison (ED), Xylem (XYL), Cloudflare (NET), Chunghwa Telecom (CHT), Howmet (HWM), Banco Bradesco (BBD), Blue Owl Capital (OWL), Church&Dwight (CHD), Cardinal Health (CAH), Targa Resources (TRGP), Zimmer Biomet (ZBH), Rocket (RKT), Iron Mountain (IRM), Eversource Energy (ES), Baxter (BAX), Live Nation Entertainment (LYV), Coterra Energy (CTRA), DraftKings (DKNG), Illumina (ILMN), Kellanova (K), Aptiv (APTV), Alnylam (ALNY), Hologic (HOLX), Expedia (EXPE), Godaddy (GDDY), AMH 4 Rent (AMH), Stanley Black Decker (SWK), Ryan Specialty Group Holdings (RYAN), Alliant Energy (LNT), Kimco Realty (KIM), Reinsurance of America (RGA), WestRock Co (WRK), DaVita (DVA), Lamar (LAMR), Floor & Decor (FND), Bruker (BRKR), Huntington Ingalls Industries (HII), Regency Centers (REG), Camden Property (CPT), Texas Roadhouse (TXRH), Api Group Corp (APG), Essential Utilities (WTRG), Teleflex (TFX), Cyberark Software (CYBR), Open Text (OTEX), Pinnacle West (PNW), Federal Realty (FRT), Paylocity Holding (PCTY), AGCO (AGCO), United States Steel (X), Southwestern Energy (SWN), Omega Healthcare (OHI), BorgWarner (BWA), AAON (AAON), Civitas Resources (CIVI), Dolby Labs (DLB), Universal Display (OLED), MACOM Tech (MTSI), Cognex (CGNX), MasTec (MTZ), Murphy Oil (MUR), Arrow Electronics (ARW), Altair Engineering (ALTR), Bill Com (BILL), Post (POST), PBF Energy (PBF), Dentsply (XRAY), Vontier (VNT), Beacon Roofing (BECN), Wayfair Inc (W), Bright Horizons (BFAM), Blueprint Medicines Corp (BPMC), Insight Enterprises (NSIT), SPX Corp (SPXC), SM Energy (SM), Lancaster Colony (LANC), Colliers International (CIGI), MDU Resources (MDU), Janus Henderson (JHG), Tidewater (TDW), Organon Co (OGN), ExlServices (EXLS), Sealed Air (SEE), Lincoln National (LNC), Valaris (VAL), Lantheus Holdings Inc (LNTH), Workiva Inc (WK), Shake Shack Inc (SHAK), Five9 (FIVN), Itron (ITRI), Huntsman (HUN), Dun And Bradstreet (DNB), Kilroy (KRC), Verra Mobility (VRRM), PJT Partners Inc (PJT), Arcosa (ACA), Schneider National (SNDR), Select Medical (SEM), Ultragenyx (RARE), SpringWorks (SWTX), iRhythm Tech (IRTC), Kontoor Brands (KTB), Quaker Chemical (KWR), Caretrust Inc (CTRE), Belden (BDC), Bausch Health (BHC), Sotera Health (SHC), Walker&Dunlop (WD), Hercules Capital (HTGC), Enovis (ENOV).
More Stock Market News from Barchart
- Down 12% from Highs, Should You Buy the Dip in This Dividend Aristocrat?
- Down 39% YTD, Is It Too Early to Buy the Dip in Intel Stock?
- 1 Dividend King to Buy for Passive Income and AI Upside
- Stocks Pressured on the Prospect of Higher for Longer Interest Rates
