The S&P 500 Index ($SPX) (SPY) today is up +0.20%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.24%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.16%.
Stock indexes today are moderately higher on hopes that diplomatic pressure might help prevent the conflict between Iran and Israel from escalating. However, there is still the possibility that Israel will retaliate after Iran fired a barrage of missiles and drones into Israel over the weekend.
Dovish comments today from NY Fed President Williams supported stocks when he said, "We will need to start a process at some point to bring interest rates back to more normal levels, and my own view is that process will likely start this year."
Stocks fell back from their best levels on today’s jump in bond yields. The 10-year T-note yield rose to a 5-month high today after US March retail sales rose more than expected, a hawkish factor for Fed policy.
US Mar retail sales rose +0.7% m/m, stronger than expectations of +0.4% m/m. Also, Mar retail sales ex-autos rose +1.1% m/m, stronger than expectations of +0.5% m/m and the biggest increase in 14 months.
The US Apr Empire manufacturing survey general business conditions rose +6.6 to -14.3, weaker than expectations of -5.2.
US Feb business inventories rose +0.4% m/m, right on expectations.
The US Apr NAHB housing market index was unchanged at 51, right on expectations.
The markets are discounting the chances for a -25 bp rate cut at 3% for the next FOMC meeting on April 30-May 1 and 24% for the following meeting on June 11-12.
Overseas stock markets today are mixed. The Euro Stoxx 50 is up +0.94%. China's Shanghai Composite recovered from a 2-week low and closed up +1.26%. Japan's Nikkei Stock Index fell to a 1-week low and closed down -0.74%.
Interest Rates
June 10-year T-notes (ZNM24) this morning are down -26 ticks. The 10-year T-note yield is up +10.9 bp to 4.630%. June T-notes today fell to a 5-month low, and the 10-year T-note yield rose to a 5-month high of 4.661%. An unwinding of safe-haven demand for T-notes is weighing on prices on hopes that diplomatic efforts will prevent an escalation of the conflict between Iran and Israel. Also, rising inflation expectations are bearish for T-notes after the US 10-year breakeven inflation rate today climbed to a 5-1/2 month high of 2.436%. T-notes extended their losses after US Mar retail sales rose more than expected, a hawkish factor for Fed policy.
European government bond yields today are higher. The 10-year German bund yield is up +6.7 bp at 2.426%. The 10-year UK gilt yield rose to a 6-week high of 4.256% and is up +8.8 bp to 4.225%.
Eurozone Feb industrial production rose +0.8% m/m, right on expectations.
ECB Governing Council member Simkus said he sees three ECB rate cuts this year with a "higher than 50% chance" of a fourth rate cut.
ECB Governing Council member Villeroy de Galhau said, "Bar a surprise, the ECB should decide on the first rate cut at its next meeting on June 6."
US Stock Movers
Apple (AAPL) is down more than -1% after market tracker IDC reported the company shipped 50.1 million iPhones in Q1, below the consensus of 51.7 million.
Tesla (TSLA) is down more than -3% to lead losers in the Nasdaq 100 after CEO Musk said the company would slash global headcount by more than 10% as it grapples with a slowdown in electric vehicle demand.
M&T Bank (MTB) is up more than +5% to lead gainers in the S&P 500 after raising guidance on its estimate for full-year net interest income to $6.8 billion-plus versus prior guidance for $6.7 billion to $6.8 billion.
Goldman Sachs (GS) is up more than +3% to lead gainers in the Dow Jones Industrials after reporting Q1 net revenue of $14.21 billion, well above the consensus of $12.98 billion.
Centene (CNC) is up more than +3% after being awarded the statewide Medicaid contract in Florida, a move cited by Barclays as a “major win” for the company.
Intel (INTC) is up more than +2% to lead gainers in the Nasdaq 100, and Nvidia (NVDA) is up +0.74% after Citigroup opened a 30-day positive catalyst watch on Intel and a 90-day positive catalyst watch on Nvidia.
Charles Schwab (SCHW) is up more than +3% after reporting Q1 new brokerage accounts of 1.09 million, more than the consensus of 977,393.
Salesforce (CRM) is down more than -5% to lead losers in the S&P 500 and the Dow Jones Industrials after Bloomberg reported the company is interested in acquiring the company Informatica, a move analysts said may draw regulatory scrutiny.
Molina Healthcare (MOH) is down more than -5% to lead losers after losing its Medicaid contract with the state of Florida in favor of Centene.
Earnings Reports (4/15/2024)
Bright Green Corp (BGXX), Charles Schwab Corp/The (SCHW), Children's Place Inc/The (PLCE), CrossFirst Bankshares Inc (CFB), CXApp Inc (CXAI), Dragonfly Energy Holdings Corp (DFLI), FB Financial Corp (FBK), Goldman Sachs Group Inc/The (GS), Guaranty Bancshares Inc/TX (GNTY), Inspired Entertainment Inc (INSE), M&T Bank Corp (MTB), Mitek Systems Inc (MITK), Ocean Biomedical Inc (OCEA), PrimeEnergy Resources Corp (PNRG), Skillsoft Corp (SKIL), Urban One Inc (UONEK), Vuzix Corp (VUZI).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
